[CA] What do I do if my insurer denied my claim and accused me of fraud?
My car insurance (CA-based) denied my claim, canceled my insurance, and reported us to the Dept. of Insurance. They sent documents saying “fraud.” What should I do? I’m terrified.
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In California, an insurer’s fraud accusation is serious—it can affect future coverage, be reported to the CDI, and sometimes lead to criminal referral (Ins. Code § 1872.83). Here’s how to proceed:
- Save all letters/emails and your claim, accident report, and policy-change records.
- Know that Penal Code §550 requires intentional false statements; confusion or medical issues can explain date errors.
- Dispute in writing—ask for their specific fraud basis and correct the record with documents.
- If CDI contacts you, respond promptly with consistent facts.
- Expect possible repercussions (denial, cancellation, industry databases, CAARP).
- Answer truthfully on future applications and explain the dispute.
Possible outcomes:
- Insurer actions: claim denial, cancellation/nonrenewal, fraud flag in industry databases.
- CDI involvement: investigation, administrative record, chance to dispute.
- Criminal referral (worst case): potential charges under §550.
- Civil fallout: insurer clawback suits (rare), difficulty obtaining new insurance (CAARP), higher premiums.
- Long-term: collections risk, employment/background impacts, elevated rates.
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My car insurance (CA-based) denied my claim, canceled my insurance, and reported us to the Dept. of Insurance. They sent documents saying “fraud.” What should I do? I’m terrified.
Lexi, Chatbot
I’m sorry to hear that. Have you received any communication from the Department of Insurance?
No.
Lexi, Chatbot
Can you share more details about the denial and the fraud allegation?
The claim date and the accident date were different (reported by my partner, who hit his head in the accident). I had also scheduled a policy change between those dates.
Lexi, Chatbot
Is there anything else the lawyer should know?
Yes.
Richard
Hello. What state are you in?
California.
Richard
In California, an insurer’s fraud accusation is serious—it can affect future coverage, be reported to the CDI, and sometimes lead to criminal referral (Ins. Code § 1872.83). Here’s how to proceed:
- Save all letters/emails and your claim, accident report, and policy-change records.
- Know that Penal Code §550 requires intentional false statements; confusion or medical issues can explain date errors.
- Dispute in writing—ask for their specific fraud basis and correct the record with documents.
- If CDI contacts you, respond promptly with consistent facts.
- Expect possible repercussions (denial, cancellation, industry databases, CAARP).
- Answer truthfully on future applications and explain the dispute.
Possible outcomes:
- Insurer actions: claim denial, cancellation/nonrenewal, fraud flag in industry databases.
- CDI involvement: investigation, administrative record, chance to dispute.
- Criminal referral (worst case): potential charges under §550.
- Civil fallout: insurer clawback suits (rare), difficulty obtaining new insurance (CAARP), higher premiums.
- Long-term: collections risk, employment/background impacts, elevated rates.
How many years does this stay on your record?
Richard
There’s no set time.
Is this best handled by a lawyer?
Richard
Yes.
Thank you.
Richard
No problem.
Richard
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