New York Insurance Fraud Laws & Charges + Statute of Limitations

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Insurance fraud in New York takes place when entities or people make a false claim in terms of insurance in order to obtain benefits or compensation to which they aren’t actually entitled. Insurance fraud is a serious crime, and it includes any act with the intent to obtain a favorable outcome that is obtained through fraud.

In some cases, New York insurance fraud may people filing a false insurance claim or exaggerating the damages that they have incurred, including losses and injuries that might allow them to earn more benefits. What’s more, an act of insurance fraud may also be conducted by an insurance company, which fails to provide people with the insurance benefits they are due.

The main reason why people commit insurance fraud is that they want to gain financially. Many people believe that after they have maintained an insurance policy for a number of years they deserve to be compensated regardless of whether a claim is legitimate or not. In some cases, people might even destroy their own property if the payment they expect to receive is worth it.

Laws and Penalties

Insurance fraud in New York is typically divided into two categories. The first is known in the industry as hard fraud, whereas the other is known as soft fraud. Soft fraud takes place when people exaggerate their claims, such as claiming that they are more injured than they actually are following a car accident. In New York, this is usually regarded as a misdemeanor, and is punishable by jail times, fines, and community service.

On the other hand, hard fraud occurs when a person fabricates a loss deliberately for the purpose of obtaining an insurance payment. Hard fraud is usually considered a felony, which means that it is punishable by strict penalties including incarceration.

In New York, it is also possible for prosecutors to bump up the degree of insurance fraud to a felony in certain circumstances. To do this, the prosecutor must be able to prove that the accused not only committed a fraudulent insurance act, but also that they willfully obtained some property that was worth more than $1,000. In New York, the level of the crime is directly related to the value of the property, thus:

  • Fourth degree insurance fraud relates to a value of insurance worth more than $1,000 but less than $3,000.
  • Third degree insurance fraud relates to a value worth more than $3,000, but less than $50,000.
  • Second degree insurance fraud relates to a value that is more than $50,000, but less than or equal to $1,000,000.
  • First degree insurance fraud relates to a value of fraud that reaches over $1,000,000.

While insurance fraud in the fourth degree may be punishable by four years in prison, insurance fraud in the first degree is punishable in New York by up to twenty-five years in state prison.

Insurance Fraud Defenses

There are a number of ways in which a professional lawyer might be able to prevent a person from dealing with a prosecution and conviction of insurance fraud. Common defenses against an accusation of insurance fraud may include:

  • Insufficient evidence -The argument that there is insufficient evidence to prove that fraud was committed in the first place or that the defendant committed that act of fraud.
  • Lack of Intent – The lawyer may also argue that there was a lack of intent to commit the crime. Fraud includes an event or action that was intentionally done to deceive. This means that accidentally using a friend’s medical insurance card isn’t considered fraud, however, deliberately using that card would be considered fraud.
  • Non-fraudulent statement – In some cases, a false statement that is issued with an insurance company isn’t necessarily fraudulent. In order to be classed as fraud, this statement needs to relate to an existing fact. What’s more, expressions of opinion cannot be considered as fraud.
  • Entrapment – Finally, the argument of entrapment may be made if law enforcement officers can be proven to have compelled the accused into committing a crime that they would not have committed. However, simply offering an opportunity to commit a crime cannot be deemed as entrapment.

Statute of Limitations

For fraud in New York, including insurance fraud, the statute of limitations currently stands at six years. The countdown for the statute of limitations will begin from the date the plaintiff in question was harmed by the fraudulent conduct, or it might begin two years from the time at which he or she should have, or did discover the fraudulent activity. There are some exceptions wherein these limits can be extended.

New York Insurance Fraud Cases