When your home sustains damage in a natural disaster such as a hurricane or flood, insurance coverage should cover the costs and allow you to rebuild. However, making false or exaggerated insurance claims can result in charges of insurance fraud.

If your insurance company is investigating you for potential fraud, learn more about the definition of and penalties for this crime in Louisiana.

What is insurance fraud?

Any abuse of the insurance system for personal gain constitutes insurance fraud under Louisiana state law. The state Division of Insurance Fraud investigates these crimes and provides evidence of fraud and abuse to local and state law enforcement agencies. Louisiana distinguishes between soft fraud, such as over-reporting damages on an accident report, and hard fraud, which involves arson, staged accidents and other preplanned incidents.

What actions constitute insurance fraud?

Some of the most common examples of insurance fraud include the following:

  • Falsely reporting a vehicle stolen
  • Asking independent adjusters to inflate damage estimates and submitting these inflated numbers to your insurer
  • Staging an accident and claiming property damage and personal injury
  • Inflating the amount of damage sustained in an auto accident or natural disaster
  • Knowingly providing erroneous or fabricated information in your application for insurance coverage
  • Forging a life insurance policy to name yourself as the beneficiary
  • Collecting a settlement from the insurance company and failing to fix your home or car with the funds
  • Falsely reporting damage to your home after a natural disaster

What are the penalties for insurance fraud?

Insurance fraud is a felony in Louisiana. Convicted individuals are subject to the same penalties for soft and hard fraud. These consequences may include jail time of up to five years, up to $5,000 in fines, probation, community service and restitution (repaying the financial gain from the fraudulent activities).

When you learn that you are the subject of an insurance fraud investigation, you may benefit from speaking with an attorney who can advocate on behalf of your legal rights in court.