Email the author at hmsteinberg@hotmail.com
Colorado Law Codifies All Types Of Insurance Fraud Section 18-5-211
The law is very specific and carefully lists when a Colorado District Attorney can charge any or all players in an insurance fraud investigation.
How Does One Commit The Crime Of Insurance Fraud In Colorado?
This Colorado law applies across the board to fraud committed by insurance claimants, agents, and brokers.
The most common kind of Insurance fraud in Colorado is committed when a person:
The Key Factor – The Mental State of Intent To Commit The Crime Separates Fraud From Other Crimes
The most important factor necessary to understand the crime of fraud is that there must be an INTENT to commit the crime. A specific intent to commit fraud is the most essential element required for one to be found guilty of the crime.
If an act is merely negligent or even reckless – and there is no proof of a specific intent to commit the crime – it cannot be insurance fraud.
Insurance fraud is intentionally attempting or actually obtaining undeserved benefits from an insurance company. again, innocent and even negligent mistakes in insurance claims, while very very common, fo not meet the standard for this kind of fraudulent act.
False Claims Broken Down Further
A person commits insurance fraud in Colorado if that person does one or more of the following acts:
- He or she – with an intent to defraud presents or causes to be presented any insurance claim, which claim contains false material information or withholds material information;
- He or she – with an intent to defraud presents or causes to be presented any written, verbal, or digital material or statement as part of, in support of or in opposition to, a claim for payment or other benefit pursuant to an insurance policy, knowing that the material or statement contains false material information or withholds material information.
The Most Common Methods Of Committing This Crime – 18-5-211
A common type of insurance fraud occurs when applying for a policy. If the application for insurance contains material lies or omissions, (such as those that would lower premiums) that is insurance fraud, which are known to the person seeking the insurance, that meets the definition. “Material” means important or relevant to the policy.
Another common type of insurance fraud is making a false claim for a loss or injury which contains false material information or withholds material information.
Staging a rigged car accident, while less common, is a more sophisticated scheme to commit insurance fraud.
Finally, a form of insurance fraud one sees more commonly by criminal defense lawyers is when an individual has had an accident and dates a new application for an insurance policy to include an accident that has already occurred.
Insurance Agents
Colorado’s insurance fraud law also prohibits agents from providing false information while intending to defraud a company they do business with or conspiring with another to do the same. CRS 18-5-211
The Colorado Attorney General Is Most Likely To File Charges Under 18-5-211
Typically the branch of law enforcement most likely to investigate and prosecute these cases is the Office of The Attorney General Of Colorado.
The Colorado Division of Insurance in the Department of Regulatory Agencies and the National Insurance Crime Bureau makes the referral of suspected fraud, forgery, theft and other crimes to the AG – who then investigates further and decides to reject or to file charges.
It a Colorado criminal defense lawyer has an opportunity to make a difference – that difference may be made at this “pre-filing stage of the case” – (before charges are filed.)
The Criminal Penalties For Committing Insurance Fraud In Colorado For Violations Of 18-5-211
Insurance Fraud, depending on how it is charged, can be a Misdemeanor or Felony in Colorado
The simple acts of providing a fictitious application to obtain an insurance policy is often a class 1 misdemeanor in Colorado.
The penalties for this act are up to 18 months in county jail, and. or maximum fine of $5,000
But the act of “staging” an accident, for example, is much more serious. This hard fraud (see below) is a class 5 felony and can include up to 3 years in prison, 2 years of parole, and a fine of up to $100,000.
Summary And Conclusion – Colorado Insurance Fraud
While there is no single sector of the insurance industry that is completely free from fraud, companies who sell auto insurance have a disproportionate number of attempts to commit insurance fraud agains them.
Soft fraud is much very common in the auto insurance industry. Soft fraud is the intentional exaggeration of the extent of damage suffered under a legitimate insurance claim.
Hard fraud claims are much clearer and easier to prove. Hard fraud is a claim that is clearly false in nature where there is no relationship at all toward a truthful claim and is 100% fraudulent ab intio (from the statrt).
In either case, it is strongly suggested that an individual charged with this kind of white collar crime should never represent themselves in court.
ABOUT THE AUTHOR: H. Michael Steinberg – H. Michael Steinberg, is a Denver, Colorado criminal defense lawyer with over 42 years of day to day courtroom experience – specializing in Colorado Criminal Law along the Front Range. Call him if you have any questions about …the crime of Insurance Fraud in Colorado.