- posted: Aug. 20, 2023
- Insurance Defense Litigation
Fraud perpetrated by insured parties continues to plague the insurance industry, driving up litigation expenses for insurance companies and ultimately pushing premium costs higher for everyone. Insurance companies defending against fraudulent claims in West Virginia have a valuable tool in the state’s Insurance Fraud Protection Act (IFPA).
The IFPA defines a fraudulent insurance act as knowingly and willfully providing a false material statement for an insurance claim or payment with the intent of defrauding the insurance company. The statute labels these actions by an insured party as fraudulent acts:
- Presenting or preparing false information concerning a material fact related to an application for insurance, a claim under an insurance policy, premiums paid for a policy, the final condition of an insurer or reinsurer or the reinstatement of an insurance policy
- Soliciting or accepting new or renewal policies from an insurer while knowing that the insurer is insolvent at the time of the transaction
- Removing, concealing, altering or destroying assets or record of an insurer
- Willfully embezzling money, funds, premiums, credits or other property of an insurer
- Posing as a licensed insurance provider or agent
- Assisting or attempting to assist anyone in committed the acts described above
Insurance fraud is a crime in West Virginia. If the insurance benefit sought was under $1,000, the fraud is a misdemeanor punishable by up to a year in prison and a fine of up to $2,500. If the benefit sought was over $1,000, the fraud is a felony punishable by up to 10 years in prison and fines of up to $10,000.
The FBI says insurance fraud costs the industry more than $40 billion every year, which does not even include healthcare insurance fraud, which is the single costliest type. Some of the most common fraudulent acts committed by policyholders include:
- Submitting property damage claims that include pre-existing damage unrelated to the incident that gives rise to the claim
- Workers exaggerating their injuries in order to get more workers’ compensation
- Making false or misleading statements or omissions on life insurance applications
Defending against fraudulent claims requires a team effort by carriers and their outside counsel, working together to gather and analyze evidence. If the issue does rise to the level of a crime, interfacing with law enforcement agencies becomes critical. You’ll want to align yourself with an insurance defense firm that can effectively pursue civil remedies such as damages while assisting in the criminal investigation as necessary.
Pullin, Fowler, Flanagan, Brown & Poe, PLLC has a decades-long history of defending insurers against fraudulent claims. We have offices in Charleston, Morgantown, Beckley or Martinsburg, West Virginia. Call 304-344-0100 or contact us online to speak with an attorney.