NY Penal Law § 176.20: Insurance fraud in the third degree

Insurance fraud is among the white collar crimes that entails deceiving an insurance company in order to receive insurance money. This statute covers fraud that involves any type of insurance policy, plan or arrangement including life insurance, property or home owner’s insurance, automobile insurance, health insurance, workers’ compensation, commercial insurance, and publicly funded insurance programs, such as Medicare or Medicaid.

Faking a death, for example, in order to collect on a life insurance policy and then turning up years later, claiming memory loss would be an act of insurance fraud. In the case of a car accident, if you were to file a claim for damages that did not actually take place in the accident, but occurred as a result of an earlier accident, you would have committed insurance fraud. There are a number of different insurance fraud offenses listed in the New York criminal code. If you carry out a fraudulent insurance act, the specific insurance fraud crime you will face will depend on several different factors, such as the type of insurance plan involved and the amount of money you received or attempted to receive. You will be charged under New York Penal Code § 176.20 with insurance fraud in the third degree if you commit an act of insurance fraud and thereby obtain or attempt to obtain property with a value of over $3000 but not over $50,000. It is critical to note that if you are suspected of insurance fraud, you will probably face additional criminal charges such as grand larceny.

Two Examples

Chase

Chase is interested in remodeling his kitchen. Unfortunately, the estimates for the remodel are much more than he could afford. To get the money, Chase decided he might set his kitchen on fire, get the payout from the insurance company and use that to build a whole new kitchen with all of the new features he wants. In this scenario, if Chase goes through with the plan and collects an insurance payment of more than $3000 but less than $50,000, then he could be charged with insurance fraud in the third degree in violation of New York Penal Code § 176.20.

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Legal Scenario: What Would You Do?

Scenario

After a minor fender-bender, your auto body shop suggests inflating the repair estimate by $3,000 and splitting the extra payout with you. You submit the inflated claim to your insurance company, and weeks later an investigator contacts you saying they've flagged discrepancies in the estimate.

Can I really be charged with a crime for exaggerating a car insurance claim, even though nobody got physically hurt?

Attorney's Answer

Absolutely. Under NY Penal Law § 176.20, insurance fraud in the third degree is a Class D felony, which means you face up to seven years in prison even though this is a non-violent offense. The statute applies when a person knowingly files a fraudulent insurance claim of any kind — auto, health, property, or otherwise — regardless of the dollar amount, though third-degree charges typically involve amounts exceeding $1,000 but under $3,000. Prosecutors only need to prove that you intentionally submitted false information to the insurer with the intent to defraud, and the inflated estimate itself can serve as powerful evidence of that intent. An experienced defense attorney may be able to challenge the knowledge element or negotiate the charge down, but you should take this extremely seriously and avoid making any further statements to the insurance company or investigators.

This is general information only. Contact us for advice specific to your situation.

Cassius

Cassius, who doesn’t have a driver’s license, is in the driver’s seat in Mervin’s car. Mervin is in the passenger seat. Coming around a corner, Cassius sideswipes Lemuel’s car, causing extensive damage. Cassius panics and keeps driving on. A block later, Mervin and Cassius pull over to exchange seats in the car, and Mervin drives back to the accident scene. He offers apologies and gives Lemuel his insurance information. Mervin would have committed insurance fraud, because his insurance company might not have paid the claim to Lemuel if they knew that Cassius was driving the car and not Mervin.

Offenses that are Related