Insurance fraud happens more often than most people realize. Someone adds injuries to a car accident claim that didn’t happen.
A business owner inflates losses after a burglary. A homeowner stages a theft to collect money. These actions might seem harmless or even justified when premiums feel too high, but they’re illegal.
So, what is the insurance fraud punishment in Missouri?
Understanding what’s at stake can help you avoid making a costly mistake.
What Counts as Insurance Fraud?
Insurance fraud is a form of theft. It occurs when someone deliberately uses deception to obtain money or benefits from an insurance company they’re not entitled to receive.
Common types of insurance fraud include:
- Lying on policy applications about health conditions, driving history, or property details
- Fabricating claims for events that never happened
- Exaggerating legitimate claims by inflating values or adding false items
- Staging accidents or intentionally causing damage to collect insurance money
- Submitting claims for injuries or medical treatments that didn’t occur
- Filing multiple claims for the same loss with different insurers
The key element is intent. When someone knowingly provides false information to collect insurance money, that’s fraud.
“Soft” vs. “Hard” Insurance Fraud
Not all insurance fraud carries the same weight in the legal system. Prosecutors and courts distinguish between two categories based on the nature of the deception.
Soft Insurance Fraud
Soft fraud involves padding or exaggerating a legitimate claim. The underlying incident actually happened, but the person inflates the damages or losses.
Examples include:
- A driver with a legitimate property damage claim from a collision who also claims fake injuries and medical expenses
- A homeowner whose house was burglarized who exaggerates the value or number of items stolen
- A business owner who inflates inventory losses after a real break-in
Hard Insurance Fraud
Hard fraud occurs when the entire claim is fabricated. Nothing legitimate happened—the whole thing is a scheme to steal from the insurance company.
Examples include:
- Burning down your own house or business to collect insurance money
- Staging motor vehicle collisions to file injury and damage claims
- Reporting property as stolen when it was never actually stolen
Hard fraud is treated much more seriously than soft fraud. The premeditation and planning involved demonstrate clear criminal intent, which results in harsher penalties.
Missouri’s Insurance Fraud Laws
Missouri law addresses insurance fraud under several statutes that cover different types of fraudulent activity.
Insurance Fraud Classification
The classification and punishment depend primarily on the value of the fraud.
Under Missouri law (RSMo § 375.991):
- Insurance fraud involving less than $750 is a Class A misdemeanor
- Insurance fraud involving $750 or more is a felony
The specific felony classification depends on the amount:
- $750 to $25,000: Class D felony
- $25,000 or more: Class C felony
What the Prosecution Must Prove
To convict someone of insurance fraud, prosecutors must prove:
- The person knowingly presented false information
- The false information was material (relevant to the claim)
- The person acted with intent to defraud the insurance company
- The insurance company suffered or could have suffered a financial loss
The “knowingly” element is important. Honest mistakes, good faith disputes about value, or negligent errors don’t qualify as fraud. The prosecution must show intentional deception.
Penalties for Insurance Fraud in Missouri
Convictions for insurance fraud result in penalties that vary based on whether the offense is charged as a misdemeanor or felony.
Misdemeanor Penalties
Class A misdemeanor insurance fraud (less than $750) carries:
- Up to one year in county jail
- Fines up to $2,000
- Restitution to the insurance company
- Probation
- Community service
Felony Penalties
Class D felony (fraud valued at $750 to $25,000):
- Up to 7 years in prison
- Fines up to $10,000
- Restitution
- Probation (possible for first offenders)
Class C felony (fraud valued at $25,000 or more):
- 3 to 10 years in prison
- Fines up to $10,000
- Restitution
- Supervised release after prison
Restitution Requirements
Courts typically order defendants to pay back the full amount fraudulently obtained, plus investigation costs. This restitution is separate from fines and must be paid even if the defendant serves prison time.
Additional Consequences
Beyond criminal penalties, insurance fraud convictions carry long-term consequences:
- Permanent criminal record affecting employment opportunities
- Loss of professional licenses for insurance agents, healthcare providers, and other licensed professionals
- Difficulty obtaining insurance in the future, or dramatically higher premiums
- Civil lawsuits from insurance companies seeking additional damages
- Federal charges if the fraud involved federal insurance programs like Medicare or Medicaid
Federal Insurance Fraud Prosecution
While most insurance fraud cases are handled in state court, some cases get prosecuted federally.
Federal prosecution typically occurs when:
- The fraud involved federal insurance programs (Medicare, Medicaid, veterans’ benefits)
- Losses exceeded substantial thresholds
- The scheme crossed state lines
- The fraud involved organized crime or racketeering
- Multiple defendants participated in a large-scale operation
Federal sentencing guidelines factor in loss amounts, the number of victims, and whether the defendant held a leadership role in the scheme.
Defending Against Insurance Fraud Charges
If you’re facing insurance fraud charges, several defenses may apply depending on the circumstances.
Lack of Intent
The prosecution must prove you knowingly committed fraud. If you made an honest mistake, miscalculated values in good faith, or relied on incorrect information from others, you may not have had the required criminal intent.
Good Faith Dispute
If you genuinely believed your claim was accurate based on reasonable estimates or professional appraisals, that’s a good faith dispute—not fraud.
Insufficient Evidence
The prosecution must prove every element beyond a reasonable doubt. Challenging their evidence, questioning witness credibility, or showing alternative explanations for discrepancies can create reasonable doubt.
Entrapment
In rare cases, law enforcement or insurance investigators might encourage someone to commit fraud. If they induced you to commit a crime you weren’t predisposed to commit, entrapment may be a defense.
What to Do If You’re Accused
If you’re under investigation or charged with insurance fraud:
- Stop talking to investigators immediately without an attorney present
- Don’t try to fix the problem yourself by withdrawing claims or offering explanations
- Preserve all documentation related to the claim and communications with the insurance company
- Contact an attorney experienced in fraud cases before responding to any inquiries
- Don’t discuss the case with anyone except your attorney
Insurance fraud investigations often begin long before charges are filed. Rose Legal Services handles fraud cases throughout Missouri and can evaluate your specific situation.
Early Intervention Matters
Insurance fraud might seem like a low-risk way to recover what feels like unfair premium payments, but the reality is harsh. Convictions result in jail time, hefty fines, restitution payments, and a permanent criminal record that affects employment and housing for years.
Missouri takes insurance fraud seriously, whether it’s soft fraud involving claim padding or hard fraud involving staged accidents and fake injuries.
Early intervention by experienced legal counsel can make the difference between a conviction and a favorable resolution.
