Massachusetts Auto, Home, Business, and Life Insurance Company

Massachusetts Car Insurance Fraud and Penalties

Insurance fraud is a huge problem and costs insurance companies billions each year, which ultimately gets passed down to consumers in the form of higher insurance rates. There are many different types of fraud, all with potentially severe penalties for consumers. Here are some of the most common types of Massachusetts car insurance fraud and penalties you may face if you commit these crimes.

Types of Car Insurance Fraud

Insurance fraud is classified into two categories: soft fraud and hard fraud. Soft fraud involves things such as lies and exaggerations to take advantage of an accident that may have already occurred. Hard fraud includes more serious crimes such as deliberately causing an accident. Here are some examples of each.

Soft Fraud Examples

  • Lying about where a vehicle is garaged in order to get lower insurance premiums.
  • Exaggerating or faking injuries.
  • Additional persons claiming to be in a vehicle that was involved in an accident.
  • Causing more damage to a vehicle to make an accident appear worse.
  • Including pre-existing damages in accident damage claims.
  • Lying about who was driving a vehicle.
  • Falsely reporting an auto theft.
  • Using someone else’s name or address to purchase insurance.

Hard Fraud Examples

  • Deliberately causing an accident.
  • Staging an accident.
  • Intentionally damaging a vehicle, i.e. via fire.
  • Causing property damage or bodily injury (or even death) to others in order to file a claim.

Penalties for Massachusetts Car Insurance Fraud

In Massachusetts, all types of car insurance fraud (soft and hard) are considered felonies. They are punishable by a fine of $500 to $10,000 and up to 5 years in prison. Violations of federal law may also apply. For example, if you used US Mail to send falsified documents, you might also be charged with mail fraud.

It’s important to remember these severe penalties when you encounter an opportunity to commit insurance fraud. Although some types of soft insurance fraud may seem like minor fibs, they are treated with equal severity in the eyes of the law. The Insurance Fraud Bureau of Massachusetts and the Massachusetts Attorney General are both responsible for enforcing these laws. Civil penalties may also apply.