Reporting Auto Insurance Fraud In New Jersey

Insurance fraud is a costly crime that affects taxpayers and insurance companies alike. In the state of New Jersey, citizens who suspect insurance fraud can report it to the Office of the Insurance Fraud Prosecutor (OIFP). The OIFP was established under the Automobile Insurance Cost Reduction Act of 1998 (AICRA) and is responsible for investigating and prosecuting insurance fraud cases, including those related to automobile insurance. Citizens who report insurance fraud in good faith are protected by law and may even be eligible for a reward.

Reporting to the Office of the Insurance Fraud Prosecutor

The Office of the Insurance Fraud Prosecutor (OIFP) was created by the Automobile Insurance Cost Reduction Act of 1998 (AICRA) and is responsible for conducting full and fair investigations to ensure successful criminal prosecutions, civil adjudications, licensing sanctions, or other appropriate dispositions. The OIFP also serves as the central coordinating body for all anti-insurance fraud activities across New Jersey.

When to Report

Insurance fraud is a crime that involves knowingly providing false information to an insurance company to receive compensation or benefits. Examples of insurance fraud in the automotive sector include filing a false claim, exaggerating damages or losses, making a fake motor vehicle insurance card, or staging car accidents to cheat insurance companies. If you suspect insurance fraud, you can report it to the OIFP.

How to Report

The New Jersey Office of the Attorney General provides an online form for reporting insurance fraud to the OIFP. This form is for public use, and citizens who report in good faith are protected by law from civil suits. It is important to note that deliberately providing false information to law enforcement is illegal.

Rewards

Individuals who provide tips that lead to an arrest and conviction may be eligible for a reward.

What constitutes auto insurance fraud

Auto insurance fraud is a deliberate deception committed to obtain financial gain. It involves knowingly providing false information to an insurance company to receive compensation or benefits. Auto insurance fraud can take various forms, ranging from soft fraud to hard fraud, with soft fraud typically referring to exaggerating a claim or withholding critical details on an application, and hard fraud involving more serious offences such as faking accidents or abandoning vehicles.

Some common types of auto insurance fraud include:

• Counterfeit airbags: Deployed airbags are sometimes replaced with counterfeits during the repair process, which can put people's lives at risk.
• Staged accidents: These are incidents where a driver intentionally causes a collision to receive a fraudulent insurance payout.
• Premium diversion: This involves a dishonest insurance agent stealing your premiums and not setting up your coverage, leaving you without insurance if an accident occurs.
• Sliding: An unethical agent adds extra coverage that you didn't want into your policy, increasing your premiums and their commission.
• Windshield replacement rip-offs: In states without deductibles for windshield replacement, unscrupulous contractors trick customers into unnecessary replacements and handle the claim process themselves, resulting in inflated costs.
• Tow truck scams: Unrequested tow trucks may demand hundreds of dollars for repairs and release of your vehicle.
• Car insurance premium evasion: Policyholders deliberately mislead insurers by providing false addresses or failing to add new drivers to their policies.

Auto insurance fraud has significant financial implications, costing insurers and consumers billions of dollars annually and leading to higher insurance premiums. It is important to be vigilant and report suspected auto insurance fraud to the relevant authorities.

Immunity for those reporting in good faith

If you suspect insurance fraud in New Jersey, you can report it to the Office of the Insurance Fraud Prosecutor. This can be done by filling out a form or by calling a 24-hour insurance fraud hotline.

Citizens who report insurance fraud in good faith and without malice are protected by immunity from civil suits. This means that if you have reasonable grounds to suspect insurance fraud and report it honestly, you cannot be sued for your actions. This protection is in place to encourage people to come forward with information that can help stop insurance fraud, which costs taxpayers $80 billion every year.

However, it is important to note that it is illegal to deliberately give false information to law enforcement. The immunity offered to those reporting in good faith does not apply if the information provided is known to be false or is given with malicious intent.

The Office of the Insurance Fraud Prosecutor offers a reward of up to $25,000 for those who report acts of fraud in good faith. This reward is allocated per occurrence and may be split among multiple reporting parties.

Criminal penalties for insurance fraud

New Jersey has strict laws against insurance fraud, with most cases falling under the New Jersey Code 2C:21-4.6, which classifies insurance fraud as a third-degree felony. The state has some of the toughest laws against insurance fraud in the country, and penalties can be severe.

For most third-degree insurance fraud crimes in New Jersey, the penalties include:

• 3-5 years in state prison
• Fines up to $150,000 or five times the amount of fraudulent claims

In cases of repeated or excessive insurance fraud, it can be upgraded to a second-degree offense, leading to even stiffer penalties:

• 5-10 years in prison
• Fines up to $150,000

Other specific types of insurance fraud and their penalties include:

• Fraudulent Vehicle Insurance Identification: A fourth-degree crime with fines up to $10,000 and up to 18 months in jail.
• Insurance Application Fraud: A $5,000 fine.
• Unemployment Insurance Fraud: Considered a theft crime, with penalties corresponding to the value of the theft.
• Disability Benefits Fraud: Also considered theft.
• Workers' Compensation Insurance Fraud: Up to a $10,000 fine and 18 months in jail.

Additionally, there can be civil penalties, including fines and revocation of business licenses.

Reporting insurance fraud by doctors and medical facilities

Insurance fraud is a costly crime that affects taxpayers and insurance companies alike. Citizens of New Jersey can report insurance fraud to the Office of the Insurance Fraud Prosecutor, which falls under the Department of Law & Public Safety.

• Doctors, medical facilities, and other medical professionals overbilling for treatments or billing for treatments not provided.
• "Upcoding": Medical professionals use a procedure code for a more expensive treatment than what was actually performed to receive higher reimbursement from insurance companies.
• "Unbundling": Medical professionals bill separately for procedures/tests typically performed together to receive higher reimbursement.

Reporting Process

Reports can be made to the following addresses:

• Albert Elias RCH, PO Box 479, Burlington Street, Bordentown, NJ 08505
• D.O.V.E.S RCH, 188 Lindberg Road, Hopewell, NJ 08525
• Northern Region Independence & Re-entry Success Center, 461-63 Central Avenue, Newark, NJ 07107

Individuals reporting in good faith and without malice are protected by immunity from civil suits. However, providing false information to law enforcement is illegal.

Frequently asked questions