Automobile Insurance Fraud

California criminal fraud involving automobile insurance is referred to as automobile/vehicle insurance fraud. When contacted by one’s automobile insurer or by an automobile insurance or crash investigator regarding fraudulent claims, consider finding legal help. Facing these charges alone can be extremely difficult and should not be taken lightly.

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It is highly recommended you find strong legal representation to discuss all possible options. A criminal defense attorney understands all the incidences that fall under insurance fraud and can help fight such offenses. To better understand what insurance fraud under Penal Codesection 550 (PC 550) means, we must look at how California law legally defines it.

What is the legal definition of PC 550?

The legal definition of automobile insurance fraud depends on which section was allegedly violated. There are several types of vehicle insurance fraud under PC 550. Under these statutes, it is considered unlawful to aid, abet, solicit, or conspire to commit any of the Penal Code sections below.

PC 550(a)(4)Fraudulent Claims – under this section, falsely/fraudulently presenting a claim for conversion, damage, destruction, loss, or theft of a motor vehicle is unlawful. California defines this form of automobile insurance fraud as:

  1. Falsely/fraudulently claiming payment for any losses you suffered because of conversion, damage, destruction, loss of contents, or theft of a motor vehicle,
  2. You knew the claim was falsely/fraudulently made, and
  3. You had the intention of defrauding at the time the claim was submitted.

Multiple [fraudulent] Claims is also covered under PC 550(a)(4)and occurs when:

  1. You present two or more claims for the same loss to your insurance provider or numerous different motor vehicle insurers,
  2. You knowingly submitted multiple claims for the same loss, and
  3. You submitted the claims with the intent to defraud.

PC 550(a)(3)Causing an Accident – you violate this law when:

  1. Causing or participating in a vehicular collision, crash, or other type of automobile accident,
  2. Knowingly doing so for the purposes of making false or fraudulent claims, and
  3. With the intention to defraud.

PC 550(b)(1), (2),(3), and (4) False Statements – these subsections can be violated if you:

  1. Prepared or made oral or written statement(s) to be used for or against a motor vehicle insurance claim:
    1. To receive a payment or for some other benefit, and
    2. While knowing the statements are false or have misleading information when it comes to the material fact.
  2. Presented oral or written statements(s) to be used for or against an automobile insurance claim:
    1. To receive payment or some other benefit, and
    2. Knowing the presented statements have false or misleading information regarding the material fact.
  3. Prepared or made any type of [false or misleading] oral or written statement(s) with the intention to present it to a motor vehicle insurer:
    1. To obtain the automobile insurance, and
    2. You claimed you resided in California, when your actual residence is somewhere else.

Similar Offenses

These offenses may be likePC 550, insurance fraud, but have slight differences.

PC 548Damaging or Abandoning Vehicle

It is illegal to:

  • Damage, destruct, hide, abandon, or dispose of a motor vehicle that has insurance against loss or damage; and
  • Did this with the intention to defraud or exact prejudices against the insurance company.

PC 549Referring or Solicit Automobile Insurance Fraud Business

It is illegal to:

  • Refer or solicit another person to an automobile repair shop or a medical doctor; and
  • Know that this professional intends to submit a false/fraudulent automobile insurance claim.

PC 551Kickbacks FromAutomobile-body Repair Shops

It is illegal when:

  • An automobile repair professional offers an insurance agent a commission, fee, cut of the profits, or other form of compensation,
    • In return for customer referrals to buy exclusively at their automobile body shop, purchases that would be covered by the automobile insurance.
    • The insurance adjuster, agent, or broker can be guilty of this as well if they refer customers to the business in exchange for a fee or any kind of role in a profit-sharing scheme.

Associated/Related Crimes

The following statutes are often associated with PC 550, insurance fraud. It is important to note, associated or related crimes can be charged in addition to the main offense.

Vehicle Code Section 10501 – Making A False Vehicle Theft Report

This is an offense that is commonly charged along with or in connection to motor vehicle insurance fraud. You are guilty of this offense if it is proven that you:

  • Made or filed a false or fraudulent report of a stolen automobile,
  • It was filed with a law enforcement agency, and
  • With the intention of deceiving.

PC 484a & 488- Petty Theft

This is also referred to as theft by larceny and this law makes it a crime to:

  • Physically take/steal property belonging to another person, and
  • The unlawful theft of that property has a value of nine hundred fifty dollars or less.

PC487- Grand Theft

It is a crime to:

  1. Physically take/steal property belonging to another person, and
  2. The unlawful theft of that property is valued at over nine hundred fifty dollars.

The consequences for petty theft and grand theft depend on the value of property stolen and what type of property it was. For instance, grand theft automobile or grand theft firearm each carry a different set of penalties than just petty or grand theft. When an automobile or firearm is part of the grand theft, it most often is considered a felonious act.

What Must the Prosecution Do?

For the prosecution to get a conviction for violating PC550 , insurance fraud, they must first prove beyond a reasonable doubt the following elements of the crime took place:

  1. You allegedly made or submitted a false or fraudulent statement or report to your automobile insurer, and
  2. You allegedly did so with the intention to deceive and defraud the insurance company.

Do not underestimate the power of California’s Department of Insurance, who happen to work closely with law enforcement and prosecutors to approach insurance fraud with a heavy, seemingly zero tolerance hand.

A tough, effective criminal defense lawyer knows how to handle these cases with the same aggressiveness as the prosecution. It is also important to remember the prosecution are the ones that must prove beyond any reasonable doubt that you are the alleged guilty party. It can be challenging for them when they only have circumstantial evidence to bring to the table.

Who Can Be Charged?

Here are some instances that illustrate who can or cannot be charged with violating PC 550, insurance fraud.

Scenario 1:

Stan side-swiped another vehicle in a shopping center parking lot and quickly drove away. There was damage to his car as well, so he reported to his insurance agency that his car was the one hit when it was parked.

The owner of the car Stan side-swiped requested their insurance agency to investigate who hit her car. Stan didn’t know the parking lot had cameras and the investigator was able to watch the incident. It was clear Stan had caused the accident and his statements to the insurance agency were false. Stan could be charged with PC 550, automobile insurance fraud by making false statements.

Scenario 2:

Marla was in the middle of moving from Oregon to California and got into an accident in front of her old home. She reported the incident and the damage to her insurance agency in Oregon. Later, she was surprised when they accused her of insurance fraud. Red flags were raised for them because she was going to use an automobile repair shop close to her new home in a different state.

It was clear that Marla had extenuating circumstances regarding her living situation. She had to provide proof that she was in the middle of moving from one state to another. The driver of the other vehicle involved also helped combat such an accusation by corroborating the events Marla originally reported. Marla would not be guilty of violating PC 550, insurance fraud or any of the subsections. There was zero intent to defraud and evidence to support her claim.

The Legal Defense

An important detail to note concerning PC 550, its subsections, and any similar, associated, or related offenses:

  • You could very well be found guilty of any of these crimes, regardless of whether the automobile insurance company or anyone else suffered any monetary, legal, or property loss, and
  • Even if the vehicle that was directly involved did not belong to you.

Keeping that in mind, finding the right legal defense team does not have to be a struggle. Consider experienced criminal defense lawyers to help you fight any charges involving automobile insurance fraud or any statutes concerning false claims.

Expert legal representation canrecognize instances in which the following common defenses can be used to fight against charges for insurance fraud.

Is there definitive/sufficient evidence?

There are instances in which there is obvious damage to the automobile(s) in question and the claim appears to be credible. This makes it difficult to prove someone would deliberately commit automobile insurance fraud. Some reasons for this might be:

  1. There was no witness testimony to contradict any statements or reports you happened to make,
  2. There wereno video recordings, GPS, or photos that captured any illegal acts, and/or
  3. An overall general lack of physical or testimonial evidence.

Was there actual intent?

Motor vehicle collisions, crashes, or accidents are all intense situations, regardless of whether the damage was superficial or severe. Individuals who file claims without the intent of making a false statement may be wrongly accused of insurance fraud for several reasons.

Some instances include old damage that the defendant did not notice before the recent accident. It is possible toattribute unnoticed past damage with current damage, especially after a recent accident. Depending on the surprise and severity of the accident, confusion can often be a factor.

Residency situations can be difficult to comb through. It is shocking to face this type of fraudulent offense simply because you failed to meet residency requirements of California or any other state you happen to recently or partially reside in. Just because you did not update your current address, in the hectic atmosphere of moving, does not mean you had any intention of committing insurance fraud.


Many subsection statutes fall under PC 550, insurance fraud, and the penalties will vary depending on which section of the code was violated. Insurance fraud is considered a “wobbler” in California. This means some of these offenses can be charged as a misdemeanor or a felony.

If convicted of PC 550(a)(4)Fraudulent Claims or Multiple [fraudulent] Claims:


  • Formal (felony) probation,
  • Up to fifty thousand dollars or double the fraudulent amount in finesdepending on which amount is greater, and/or
  • 2, 3, or 5 years in a county jail.

NOTE: this can only be charged as a felony.

PC 550(a)(3)Causing an Accident


  • Formal probation;
  • Up to fifty thousand dollars in fines, or double the fraudulent total depending on which total is greater, and/or
  • 2, 3, or 5 years in the county jail.

NOTE: this can only be charged as a felony.

Sentencing Enhancements;

  • Each prior felony conviction for motor vehicle insurance fraud, under PC548 and/or 550, results in two years added to your jail sentence;
  • For two or more prior felony convictions for PC 550(a)(3), causing an accident, five years added to the incarcerated sentence;
  • Two years added to jail sentence for each person, who is not an accomplice, that suffered any serious bodily injury as a result of your actions; and
  • Possibly three or more years added to your jail sentence if you inflicted great bodily injury on person(s) while causing the vehicular collision, crash, orautomobile accident.

PCs 550(b)(1), (2), (3), (4) False Statements


  • Summary (informal) probation,
  • Up to ten thousand dollars in fines, and/or
  • Possibly up to one year in the county jail.


  • Felony probation;
  • Fines up to fifty thousand dollars or double the fraudulent amount,
    • Depends on which total is greater, and/or
  • 2, 3, or 5 years in the county jail.

Penalties for Similar/Associated Offenses

If found guilty of any similar or associated crimes, the penalties include, but are not limited to:

PC 548Damaging or Abandoning Vehicle


If convicted, you face:

  • Formal probation,
  • 2, 3, or 5 years in a county jail, and/or
  • Fines of up to fifty thousand dollars.
    • For each prior felony conviction of insurance fraud under PC 548 or 550, sentencing enhancements of up to two years may apply.

PC 549Referring, Soliciting, or Accepting AutomobileInsurance Fraud Business


  • Summary probation,
  • Up to ten thousand dollars in fines, and/or
  • Possibly up to one year in the county jail.


  • Formal probation,
  • Up to fifty thousand dollars in fines or double the fraudulent amount, whichever is greater, and/or
  • 16 months, 2 or 3 years in a county jail.

PC 551Kickbacks fromAutomobile-body Repair Shops

For amounts nine hundred fifty dollars or less, it can be charged as a:


  • Up to one thousand dollars in fines, and/or
  • Possibly up to six months in the county jail.

For amounts greater than nine hundred fifty dollars, it can still be considered a wobbler, with the following penalties;


  • As much as one thousand dollars in fines, and/or
  • Up to one year in the county jail.


  • As much as ten thousand dollars in fines, and/or
  • 16 months, 2 or 3 years in the county jail.

Vehicle Code 10501 Making A False Vehicle Theft Report


  • Summary probation,
  • As much as one thousand dollars in fines, and/or
  • Potentially up to six months in the county jail.
    • For a second misdemeanor conviction, the potential maximum jail sentence increases to one year.


  • Up to ten thousand dollars in fines, and/or
  • 16 months, 2 or 3 years of incarceration in a county jail.

PC 484Petty Theft


  • Summary probation,
  • Fines up to one thousand dollars, and/or
  • Up to six months in the county jail.

PC 487Grand Theft


  • Possible informal probation, and/or
  • Up to one year in a county jail.


  • Formal probation,
    • With up to a one-year county jail sentence, or
  • 16 months, 2 or 3 years in a county jail.

We Can Help

You should not have to face these charges without legal help. If you are located in San Diego, Los Angeles, or Orange County, contact the Law Offices of Anna R. Yum. Get the legal defense you need to fight these charges. We can help, simply call us regarding your case and schedule your free consultation.

As a former prosecutor and award-winning criminal defense lawyer, Attorney Yum knows what it takes to fight for the best possible outcome. Handling insurance fraud quickly and efficiently is always recommended. Retaining the right legal representation could mean the difference between your freedom or dealing with possible maximum penalties such as, steep fines and potential jail time.

If you would like more information on California’s PC 550, insurance fraud or any of the aforementioned subsections give our San Diego criminal lawyer a call today.