Indiana Insurance Fraud Laws

Insurance fraud generally occurs when someone tries to make money from an insurance transaction through lying or misrepresenting what happened. In Indiana, this can occur many different ways. Insurers can also violate insurance laws in many ways, such as misrepresentation in selling insurance, inappropriate cancellation of policies, or wrongful denial of coverage. A few examples of insurance fraud are:

  • Casualty Fraud: Faking or exaggerating an injury or accident to get money or services from an insurance company.
  • Property Fraud: Exaggerating the extent of damage to your home, car, or other property; deliberately damages your own possessions for reimbursement by your insurer; or seeking reimbursement for a “lost” or “stolen” item that you still have or you gave away.
  • Workers' Compensation: Claiming to have suffered an injury while at work that you either didn't suffer at all, or you were injured at home or on vacation.

Who Enforces and Prosecutes Insurance Fraud Laws?

State and local prosecutors in Indiana handle insurance fraud cases under the applicable criminal and insurance codes. When insurance companies or agents act illegally or unprofessionally, the issues can also be handled administratively by the Indiana Department of Insurance, for example by revoking an insurer’s license. The U.S. federal government also prosecutes insurance fraud under federal criminal laws, including mail fraud or racketeering.

Indiana's insurance fraud laws are outlined below.

Code Sections

Indiana Code Title 27: Insurance

Indiana Administrative Code Title 760: Department of Insurance

IC Section 35-43-5-4.5 - Insurance Fraud

  • Making an insurance claim or providing a written or oral statement containing false or misleading information with the intent to defraud
  • Getting new or renewal insurance for an insolvent insurer
  • Removing insurer records or assets from insurer's safekeeping or concealing them from the Department of Insurance
  • Diverting insurer funds in connection with insurance formation, business activities, or transactions

What is Prohibited?

For consumers: Lying about or concealing important facts related to an insurance claim or payment made under an insurance policy or damaging property to get the insurance benefits.

For insurers: Issuing fake insurance policies, misrepresenting insurance you sell, denying payment for covered incidents, operating an insurance company in bad faith, and more.

Penalties

Criminal penalties for insurance fraud include jail time, fines, and restitution. Civil penalties are also possible, including fines, cancellation of your insurance policy, and revocation of insurance or professional license.

The crime insurance fraud described above is generally a Level 6 felony, which carries a penalty range of 6 months to 2.5 years incarceration and a fine up to $10,000. However, insurance fraud is a Level 5 felony if the person has a prior insurance fraud conviction or the value of property or services unlawfully obtained or economic loss suffered by another due to fraud is at least $2,500. The penalty for Level 5 felonies is 1-6 years incarceration and a fine up to $10,000. Lying on an insurance application is a Class A misdemeanor, punishable by up to 1 year incarceration and a fine of up to $5,000

Who Can Be Prosecuted?

Consumers, insurance companies, adjusters, service provides (mechanics, doctors, etc), and others.

Types of Insurance Fraud & Examples

  • Business Insurance – burning down a failing business to make a profit
  • Car Insurance and Accidents - reporting automobile accidents that never happened, scams involving stealing cars, or accepting checks for minor accidents without fixing the car
  • Disability Insurance Benefits - misrepresenting an injury to receive disability benefits
  • Health Insurance, Medicare, or Medicaid Claims – doctors providing unnecessary medical procedures or billing for services or supplies never provided to patients
  • Home or Renter's Insurance – falsifying the value of stolen items on property loss claims
  • Insurance Applications – omitting negative health history to qualify for life insurance
  • Unemployment Insurance – getting UI benefits while actually working
  • Workers' Compensation - claiming to be injured when not or the injury occurred while off-duty

Insurance Fraud Enforcement Agencies

The appropriate agency to call depends on the type of insurance fraud you've witnessed or experienced. If you feel you were victimized by insurance fraud, file a complaint with the Indiana Department of Insurance online.

For Medicare fraud, you can call your plan provider to ask them about possible fraud, such as being billed for services or supplies you never received. If you're uncomfortable doing so or the issue remains unresolved, you can call Medicare at 1-800-Medicare to report the fraud.

If you suspect a licensed professional, such as your doctor, counselor, or other professional, has committed insurance fraud, you may also wish to file a complaint with their professional licensing board or the Indiana Attorney General's Office .

Medicaid, food stamps, or other Public Assistance fraud can be reported to the Indiana Family and Social Services Administration Fraud Hotline at 1-800-403-0864. Medicaid fraud can also be reported online.

To report Workers' Compensation fraud, call the Indiana Worker's Compensation Board at 1-800-824-2667.

Related Resources

Get a Free Case Review

Insurance fraud laws can be complicated. Between car insurance fraud, medical insurance fraud, and welfare fraud, there is a lot to know and many ways to be in violation of the law. It's best to consult with an experienced criminal defense attorney if you have questions about your particular situation. You can start with a free case review.

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