What is and what is not insurance fraud?

Insurance fraud is a serious allegation that should not be taken lightly. Unfortunately, insurance companies fail to recognize this far too often and use this as grounds to deny your claim. At its heart, insurance fraud boils down to good faith and bad faith on the part of the insured. A typical definition of insurance fraud is a false and materially relevant statement made by the insured to the insurer, which the insured knows to be false, and which is perpetrated with the intent of deceiving the insurer. So whether an allegation of fraud will carry any muster will depend on the insured’s intent in making the statement. If the insured did not make the statement with the requisite intent – or if the insurer cannot demonstrate that intent – then a fraud allegation will not carry any weight and a denial of your benefits is improper on these grounds.

That being said, insurance companies often deny claims simply because they find some inconsistency during the claim’s process. For example, a proof of loss filed for personal property may contain overvaluations for the items you are claiming. The insurance adjuster may provide a different valuation, and indeed the true values for these items may in fact be much less than what you have claimed. However, just because you have provided some inaccuracies in the claim does not necessarily mean you have committed a fraud on the insurer. In fact, the law in Florida is that a good faith mistake such as an overestimate or a judgment error is not fraud and will not be a basis for denying benefits. After all, the true owner of the property that was lost should be given some deference as to valuation of her own property.  Thus, a good faith estimate will not void the contract, even if it is an overestimate. On the other hand, if the insurance company can show that the insured knowingly and willfully overestimated the value of her loss, the insured will be considered to have intended to deceive her insurer and the insurer will be justified in denying the claim.

Almost every insurance policy issued comes with a broad anti-fraud provision that provides for forfeiture of all benefits under the insurance contract if the insured commits fraud, misrepresentation, or concealment in connection with an insurance claim. Even in the absence of such a provision, good faith is a basic tenet of contract law, and a breach of that tenet may excuse the other party’s performance – in our case the insurance company from paying benefits. Thus, when an insured makes a knowing and materially relevant false statement of fact in connection with an insurance claim an insurer will usually be entitled to void the entire contract. This is true even if the insurance company did not change its position in reliance on that statement. So whether the insurer actually paid benefits or not is irrelevant. The only thing that matters is the insured’s state of mind when making the statement. Moreover, these forfeiture provisions are typically written to be indivisible from the rest of the contract, meaning that your insurer may deny all of the claims you have made in connection with your policy even if those other claims are proper. However, materiality is a necessary element to a fraud or misrepresentation allegation. Thus, a false statement that is immaterial to the claim, even if made knowingly and willfully, will typically not void the contract.

If your insurance has accused you of fraud, do not panic. It is a common technique used by insurance companies to deny benefits. Moreover, if litigation is commenced you do not have to prove your innocence. It is the insurance company’s burden to prove by the greater weight of the evidence that you intended to defraud them.

If your insurer has accused you of fraud you need to contact an experienced insurance claims attorney.

You can reach Miami Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected].


Hartford Fire Ins. Co. v. Haager, 196 F.2d 240 (5th Cir. 1952).

American Ins. Co. of Newark N.J. v. Robinson, 120 Fla. 674 (Fla. 1935).

Southern Home Ins. Co. v. Putnal, 57 Fla. 199 (Fla. 1909).

Lopez v. Allstate Indem. Co., 873 So. 2d 344 (Fla. 3d DCA 2004)

Schneer v. Allstate Indem. Co., 767 So. 2d 485 (Fla. 3d DCA 2000).

Hartford Fire Ins. Co. v. Haager, 196 F.2d 270 (5th Cir. 1952).

Fla. Stat. §627.736(4)(i)

Wieczoreck v. H&H Builders, Inc., 475 So. 2d 227 (Fla. 1985).

J.P. Gonzalez-Sirgo
J.P. Gonzalez-Sirgo, P.A.
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