What Triggers an Insurance Investigation in California?

Insurance fraud occurs when a person knowingly lies to gain access to a benefit or advantage to which they were not otherwise entitled, or when a benefit is denied to someone who is entitled to receive it.

Insurance fraud is treated seriously in California and aggressively investigated when suspected. If you are facing an insurance fraud investigation, you may be wondering what triggers an insurance investigation in California.

If you have been accused of insurance fraud, you must consider your next steps carefully. It is important that you not speak with an investigator or other law enforcement without first speaking with a knowledgeable criminal defense attorney.

The Law Office of Louis J. Goodman has over 30 years of experience defending Californians against criminal charges and can help you through this challenging process.  Understanding what started the investigation can reveal important information.

The Cost of Insurance Fraud

It is estimated that $308.6 billion is stolen from American consumers each year through insurance fraud. In California alone, damages from insurance fraud exceed $15 billion annually. This results in citizens paying an average of $500 each year in higher taxes, higher premiums, and higher prices. This cost to the public is part of the reason behind the aggressive pursuit of insurance fraud prosecution.

Triggers of an Insurance Fraud Investigation

There are several different potential triggers of an insurance fraud investigation, including:

• Inconsistencies in the provided information. Red flags can be raised if the information provided by the claimant contains discrepancies or inconsistencies.
• Large claim amounts. It is not uncommon for large claim amounts to see more in-depth scrutiny.
• Liability claims. If liability is unclear, a thorough investigation into the circumstances of the claim is likely to be conducted.
• Multiple claims. If more than one claim is filed within a short timeframe, especially for a similar event, an investigation is likely to follow.
• Unusual circumstances. An investigation is likely to occur if the claim references unexpected or unusual circumstances.
• Suspected fraud. Due to the potential for financial loss due to fraud, any instance of fraudulent activity is likely to trigger an investigation.

This is far from an exhaustive list of incidents that can result in an insurance fraud investigation. The California Department of Insurance (CDI) has reporting methods for both the general public and members of the insurance industry.

If an investigation has been initiated into your claim, it is wise to speak with a skilled defense attorney with the Law Office of Louis J. Goodman before an investigator contacts you.

Criminal Fraud Investigators in California

Referrals for suspected insurance fraud are investigated by the CDI. The Fraud Division of the CDI was created in 1979 to investigate fraud.

Within this division, there are four insurance fraud programs:

• Disability and Healthcare Fraud
• Automobile Insurance Fraud
• Property, Life, and Casualty Fraud
• Workers’ Compensation Fraud

The Fraud Division is a law enforcement unit that contains leading experts in the field of insurance fraud. Their training involves conducting criminal investigations and supporting the insurance industry, law enforcement agencies, consumers, and the public and private sectors.

During their investigations, Fraud Detectives will conduct undercover operations and surveillance, as well as interview suspects and witnesses. They can also make arrests, write and serve search warrants, and testify in court. Fraud Detectives are often assigned to various law enforcement task forces, including computer forensics, disaster fraud, auto theft, and pharmaceutical fraud.

Protecting Yourself After an Accusation of Insurance Fraud

If your insurance provider or CDI investigates you for insurance fraud, speaking with an experienced insurance fraud defense attorney should be a priority. The Law Office of Louis J. Goodman has over 30 years of experience representing clients in fraud investigations and can help you achieve a favorable outcome in your case.

FAQs

What Triggers an Insurance Fraud Investigation?

An insurance fraud investigation can be triggered by a report from a member of the public or someone within the insurance industry. If someone from the insurance industry files a report, it could be a result of several red flags. These red flags include filing multiple claims for similar incidents, claims of large amounts, any liability claim, and new policies.

Why Would an Insurance Investigator Come to My House?

There are several reasons an insurance investigator may approach you at your home. In some instances, they may be investigating someone close to you and are speaking to you as a witness. In other cases, they are investigating a claim you have filed and need to gather more information, verify details, or investigate potential fraud. It is recommended to speak with an attorney if you are approached by an insurance investigator, especially if you have been accused of fraud.

How Long Does an Insurance Company Have to Investigate a Claim in California?

An insurance company typically has 40 days to investigate a claim in California. They are required to either accept or deny your claim within 40 days following the claim. If the insurer requires more time to investigate, they must communicate this in writing, stating what additional information is needed to make a decision and providing an estimated timeline.

How Do Insurance Agencies Investigate Claims?

Insurance agencies utilize many different methods to investigate claims. Insurance agencies will often aggressively investigate claims, as insurance fraud is the second most costly crime in the US. To do this, insurance agencies can employ investigators to gather evidence by speaking with the claimant and other individuals, conducting background checks, and investigating the scene. Many insurance providers are also using anti-fraud technology, including AI.

Hire an Insurance Fraud Lawyer

The potential penalties for an insurance fraud conviction are severe, especially if you are being charged with a felony. Protecting yourself begins with retaining competent legal representation to see you through the investigation and trial.

The Law Office of Louis J. Goodman understands how crucial it is to defend our clients within the Golden State and can craft a tailored defense strategy for your case. Our office can make this frustrating and concerning time much easier for you and your family.

Reach out to our office to schedule a consultation with our team today.