In Texas, the law does not approach allegations of insurance fraud lightly. Lawmakers have taken great care to implement strict penalties to curb this illegal activity. Unfortunately, the zeal of certain lawmakers has made it so that it is surprisingly easy to be charged with insurance fraud. As a result, well-intentioned individuals may be shocked to find themselves on the wrong side of the law.  

If you are facing these kinds of charges and need skilled representation, contact our Austin insurance fraud defense lawyers for guidance and direction. Our team has over 65 years of combined legal experience from former prosecutors and judges.

A Closer Look at Texas Insurance Fraud Laws

Texas Penal Code Section 35.02 encompasses a range of crimes, all involving deceit or fraud against insurance companies. These include making false statements in support of an insurance claim or application, and soliciting, offering, or receiving benefits in connection with furnishing goods or services for insurance claims. Generally, a fraud claim involves material misstatements of fact concerning eligibility for coverage, the payment amount on a claim, the decision of an insurer to issue a policy, etc.

The Importance of Intent

A key legal concern in Texas insurance fraud cases is an offender’s intent to defraud or deceive. The law focuses on the perpetrator's knowledge and intention, targeting those who knowingly prepare or present false or misleading information to insurers. This focus on intent underscores the law's objective to punish deceitful practices while protecting those who may have inadvertently made mistakes without fraudulent intentions. As a result, if you are facing charges, proving that you had no intent to mislead insurers or otherwise engage in fraud could be a strong defense strategy. 

Types of Insurance Fraud Offenses & Penalties

Texas insurance fraud laws categorize offenses based on a claim's value, outlining a range from minor misdemeanors to serious felonies. For instance, a fraudulent claim of less than $100 is classified as a Class C misdemeanor punishable by a $500 fine, while a claim of $300,000 or more, or one involving risk of death or serious bodily injury, is treated as a felony of the first degree punishable by up to a $10,000 fine and up to life imprisonment.

Note that if three or more separate claims are part of a single scheme, the offense is classified one level higher than the most serious single offense proven, except if the most serious offense is already a first-degree felony. This is a technical way of saying that the risk of particularly serious penalties increases if at least three fraudulent claims are part of the same overall offensive scheme to defraud an insurer or multiple insurers. 

Conviction under state law will likely result in numerous criminal penalties, including mandatory restitution to the affected insurer(s).

Defenses for Insurance Fraud Crimes

Valid Portion of The Claim

One potential mitigating defense to allegations of insurance fraud involves demonstrating that a portion of the claim was valid. If a defendant can prove that part of their claim resulted from a legitimate loss, injury, expense, or service covered by the policy, the value of the fraudulent claim can be recalculated. The recalculated value will be based on the difference between the total claim amount and the valid portion. This defense acknowledges that while part of the claim may be fraudulent, another part may be legitimate and should be considered when determining the severity of the offense. As the severity of insurance fraud classifications is based on the value of an individual claim, this mitigating defense strategy can make a significant difference to the outcome of a defendant’s case. 

Lack of Intent to Defraud of Deceive

The law specifies that the offense of insurance fraud requires an intent to defraud or deceive. Therefore, a defendant can argue that they did not have any intent to commit fraud. This could involve demonstrating that any false or misleading information provided was due to mistake, misunderstanding, or negligence rather than a deliberate attempt to deceive the insurer. If the defense can successfully show the absence of fraudulent intent, the charges may be reduced or dismissed.

Challenging the Evidence of Fraud

Another possible defense involves contesting the prosecution's evidence that the information provided was false or misleading. The defendant might argue that the information in question was accurate or that it was not materially misleading in the context of the claim.

Frequently Asked Questions About Insurance Fraud

What Is Insurance Fraud Under Texas Law?

Insurance fraud in Texas involves knowingly preparing, presenting, or causing to be presented, false or misleading information in support of an insurance claim or application. The law targets actions intended to defraud or deceive an insurer, which can range from exaggerating damages to making false claims.

What Are The Penalties For Insurance Fraud In Texas?

Penalties vary based on the value of the fraudulent claim. They can range from $500 to $10,000 in fines. For a Class C misdemeanor offense, no jail sentence is imposed, but for a first-degree felony, a prison sentence of up to life could be imposed.

Can A Portion Of The Claim Be Legitimate In A Fraud Case?

Yes. Under Texas law, if it can be proven that part of the claim was legitimate, then the value of the fraudulent claim will be adjusted to reflect only the illegitimate portion. This can significantly impact the severity of the charges filed against a defendant and the penalties that they could face in the event of a conviction. 

Is Intent Important In Insurance Fraud Cases?

Absolutely. The intent to defraud or deceive is a critical element of insurance fraud under Texas law. If a defendant did not have the intent to deceive, this could be a potential defense.

What Should I Do If I Am Accused Of Insurance Fraud?

If you are accused of insurance fraud, it's important to consult with a criminal defense attorney immediately. Experienced lawyers, like those at Cofer & Connelly, PLLC, can help you understand the charges you’re facing, strategize possible defenses, and help you through the legal process.

Contact an Austin Insurance Fraud Attorney at Cofer & Connelly, PLLC 

In Texas, certain white-collar offenses – including insurance fraud – are prosecuted vigorously. As a result, if you have been accused of insurance fraud, it's crucial to seek legal counsel immediately. The criminal defense lawyers at Cofer & Connelly, PLLC are experienced in handling such cases and can provide the guidance and representation you need. Fighting back against insurance fraud allegations requires a skilled attorney who understands the nuances of Texas law. Don't hesitate to reach out for help. 

Contact Cofer & Connelly, PLLC at (512) 991-0576 or online to discuss your case and explore your legal options today.