By the The Bulldog Law Criminal Defense Team  •  Reviewed by a licensed California criminal defense attorney  

Penal Code § 550 criminalizes KNOWINGLY presenting a false or fraudulent insurance claim or making false statements in SUPPORT of one, or concealing events that affect entitlement across every line of coverage: auto (staged collisions, false theft reports), property and fire, health billing, and the disability and workers'-compensation world governed alongside by the Insurance Code's own fraud statutes.

The stakes are felony-track: the core claim-fraud offenses are WOBBLERS reaching 2, 3, or 5 YEARS, with fines up to $50,000 or DOUBLE the amount of the fraud, restitution on top, and companion counts stacking fast forgery for the doctored invoice, theft for the money obtained, arson-family charges (§ 548) where insured property was destroyed, and perjury exposure for sworn claim documents.

Two structural facts explain who actually gets charged. First, the crime completes at SUBMISSION no payment required and ‘fraudulent' includes the INFLATED REAL CLAIM: the genuine burglary with imaginary jewelry added, the real collision with pre-existing damage folded in, the legitimate injury with symptoms embellished exaggeration cases, not ring cases, fill most of these files. Second, the cases are built by a PRIVATE INVESTIGATIVE MACHINE: insurers' Special Investigation Units (SIUs) are statutorily REQUIRED to refer suspected fraud to the Department of Insurance and district attorneys, they run surveillance and database sweeps, and they wield the policy's own weapon the EXAMINATION UNDER OATH (EUO), a recorded, sworn interrogation the policyholder is contractually obligated to attend, whose transcript feeds the criminal file. This guide from The Bulldog Law's fraud defense practice covers the charging patterns, the exaggeration-versus-opinion line that decides real cases, the EUO and surveillance traps, and the defenses.

Where These Cases Come From - the Real Patterns

• The inflated legitimate claim the #1 source: a real loss with padded numbers added items, upgraded values, folded-in prior damage. The defense terrain is the OPINION line: VALUATION is opinion, not fact a high repair estimate, a generous replacement value, a disputed pre-loss condition are negotiation positions insurers argue about daily, and treating a valuation dispute as a lie is the overcharge these files are full of. Fraud requires a KNOWING falsehood about FACT the item that never existed, the receipt that was manufactured and the gap between aggressive claiming and lying is where counsel fights.
• Auto staged and ‘jump-in' collisions (the organized-ring cases prosecutors actually prioritize), false theft reports (the car ‘stolen' that was repossessed or abandoned VIN and phone data unravel these), and after-the-fact coverage (buying insurance post-crash and backdating the loss).
• Property and fire inventory inflation after real events, staged burglaries, and the arson-adjacent files where § 548 (destroying insured property) and arson counts ride together cases with their own forensic wars (origin-and-cause disputes are expert territory).
• Workers' compensation the surveillance theater: the injured worker filmed carrying groceries or coaching little league becomes an exhibit and the defense answer is medical reality: GOOD DAYS EXIST, restrictions are activity-specific, and ‘seen doing X once' contradicts a claim only when the claim actually asserted ‘can never do X' context, treating-physician records, and the claim's actual language defeat the montage. Employer-side premium fraud and provider billing fraud fill the lane's other side.
• The support cast 549 (referral kickbacks the capper statute aimed at accident-referral rings, which is also why LEGITIMATE injury claimants should reach lawyers directly, never through parking-lot recruiters), false statements in OPPOSITION to claims (adjuster-side fraud), and multiple-insurer double-dipping that database sweeps now catch automatically.

The EUO Trap, the Elements and the Defense Playbook

THE EUO: when a claim smells wrong, the insurer invokes the policy's Examination Under Oath clause a recorded, sworn, transcribed interrogation by insurance counsel that the policyholder must attend or forfeit the claim and it is the single most dangerous room in this field: unprepared claimants contradict documents, guess at values, and ‘clarify' themselves into the false-statement counts (§ 550(b)) that transform a denied claim into a prosecution.

The rules: you may and in any contested claim SHOULD attend with COUNSEL; preparation (documents mastered, estimates sourced, the loss timeline locked) is everything; and the moment fraud is suspected, the calculus changes from ‘save the claim' to ‘protect the person,' sometimes meaning the claim gets withdrawn or compromised rather than defended into a felony. 

THE ELEMENTS the state must prove: a KNOWINGLY false or fraudulent material statement or claim, with SPECIFIC INTENT TO DEFRAUD and each fails in recurring ways: intent fails against good-faith valuation, honest mistake, and reliance on professionals (the contractor who inflated the scope, the public adjuster who padded the inventory, the biller who upcoded WITHOUT the insured's knowledge are defenses with names attached); knowledge fails where documents were prepared by others; materiality bounds the trivial.

THE PLAYBOOK: no SIU or investigator interviews without counsel (SIU investigators are evidence-gatherers, not adjusters, whatever their tone); the EUO attended prepared and represented; the standard audit applied to the state's theory (what exactly was false, said by whom, knowing what); and the resolution reality used intelligently insurers want MONEY, prosecutors want clean cases, and repayment-structured outcomes, civil settlements, and charge reductions resolve the gray-zone files, with moral-turpitude and immigration consequences shaping every structure and record relief mapped for the end. The prevention rules for every reader with a pending claim: claim only what existed, value it with sources you can produce, let no one ‘round up' on your behalf, and treat every signed claim form as the sworn document it legally is.

Frequently Asked Questions

What are the penalties for insurance fraud in California?

The core PC 550 claim-fraud offenses are wobblers: misdemeanor (up to a year) or felony at 2, 3, or 5 years among the stiffer wobblers in the code plus fines up to $50,000 or double the fraud amount, full restitution, and companion counts (forgery, theft, perjury, § 548 property-destruction) that stack. Small-value claim provisions and false-statement counts carry their own ranges. Real-world outcomes track intent evidence and repayment: gray-zone exaggeration cases with restitution resolve as misdemeanors and negotiated dispositions, while staged-ring and arson-adjacent cases draw felony prosecution and prison exposure. As a crime of moral turpitude, even the misdemeanor carries professional-license and immigration weight which is why charge structure matters more than the fine print.

Is exaggerating an insurance claim really fraud?

Adding things that didn't exist yes: the invented item, the manufactured receipt, the pre-existing damage sworn as new are knowing falsehoods, and submission alone completes the crime. But the line matters enormously: VALUATION IS OPINION a high (even aggressive) estimate of what your real losses are worth, a disputed repair scope, a generous replacement figure are negotiation, not lies, and insurers dispute values every day without anyone committing a felony. Fraud requires a knowing false statement of FACT with intent to deceive. If a claim dispute is turning accusatory an SIU letter, an EUO demand, questions about ‘discrepancies' stop treating it as customer service and get counsel: the gap between ‘we disagree about value' and ‘you lied' is exactly where these prosecutions are born and beaten.

The insurance company demanded an Examination Under Oath should I go, and can I bring a lawyer?

You must attend (the policy makes it a condition of the claim refusal forfeits coverage) and you absolutely may and should bring counsel: EUOs are recorded, sworn interrogations conducted by insurance lawyers, their transcripts feed both claim denials and criminal referrals, and unprepared answers (guessed values, misremembered timelines, casual ‘clarifications') become false-statement counts. Preparation is the protection: every document mastered, every value sourced, the loss chronology locked, and answers limited to what you actually know. One more honest calibration: if the claim has real problems, counsel may advise compromising or withdrawing it because no claim payout is worth converting a coverage dispute into a felony file. Treat the EUO notice as the legal event it is, not paperwork.

Workers' comp has surveillance video of me am I finished?

Not remotely surveillance montages are built to look damning and collapse on context: genuine injuries have good days and bad days, medical restrictions are activity-specific (a lifting restriction isn't a walking ban), and a clip of you carrying groceries contradicts your claim only if your claim actually said you never could. The defense is the record: your treating physician's actual restrictions, the claim forms' actual language, the full unedited footage (demanded, not the highlight reel), and the medical explanation of variable symptoms. What genuinely convicts people: sworn statements of total incapacity alongside sustained contrary activity which is why claim forms deserve precision, not drama. If you've received a fraud referral or SIU contact over surveillance: no interviews, gather your medical records, and get counsel before responding to anything.

Insurance fraud law sits where money disputes meet criminal intent and most charged cases live in the gap between the two: valuations recast as lies, contractors' padding imputed to insureds, good days filmed as confessions. Defend the intent line, respect the sworn paper, and never walk into the EUO room alone. The Bulldog Law's fraud defense team handles § 550 cases and the claim disputes that precede them statewide. Contact the firm online or call (888) 928-1609.