When a Fender Bender Becomes Insurance Fraud

March 30, 2017 · by rosenblumlawfirm · in

Minor accidents happen. When the damage is minimal or superficial, people sometimes try to settle the matter without getting the police or insurance companies involved. Other times, people go the opposite route — they file the claim, collect the money,  and then choose not to fix the car. After all, if it’s just a messed-up bumper or a dented door, why bother repairing it when you could have the cash instead?

Doing so could land you in hot water, however, as it could constitute insurance fraud. New Jersey law covers many different types of insurance fraud, including “collecting an insurance check without fixing the vehicle.” The law defines insurance fraud as knowingly lying, misleading, or omitting material facts in a statement to your insurer. This means if you intended to fix the car, but changed your mind or haven’t gotten around to it, a lawyer can argue that you hadn’t set out to deceive and therefore are not guilty of fraud.

By contrast, New York does not consider this act insurance fraud. The payout is considered compensation for the decrease in value of the vehicle. As such, drivers who own their car are under no obligation to actually fix it after an accident.  

In New Jersey, most instances of insurance fraud are prosecuted as third-degree crimes. A conviction of can lead to three to five years in prison and up to $15,000 in fines. However, there are instances where insurance fraud is prosecuted as a second-degree crime. This happens when two conditions are met:

  1. The person has been convicted of five or more instances of insurance fraud, and;
    2. The amount of money stolen is greater than $1,000.

If both statements are true, then the penalty for a conviction increases to five to 10 years in prison, plus up to $150,000 in fines.

If you or someone you love one has been charged with insurance fraud or any other criminal offense in New Jersey, you need the guidance of a skilled attorney to help avoid the most serious consequences. The lawyers of the Rosenblum Law Firm are experienced criminal defense attorneys who have helped many people in similar situations. Email the Rosenblum Law Firm or call 888-979-7551 today for a free consultation about your case.