Some people think “padding” a personal injury claim is a harmless way to get more money. However, in California, the line between stretching the truth and committing a felony is very thin. To an insurance company, catching these lies is not just about saving money. It is a legal duty. It helps keep insurance costs fair for everyone who follows the rules.

Understanding the consequences

In California, exaggerating an injury is not a negotiation tactic. The law says it is illegal to knowingly give a false or dishonest claim to get paid for a loss or injury. The law applies the following standards to the act:

• The wobbler status: This means a prosecutor can charge the crime as either a minor misdemeanor or a serious felony.
• The penalties: If convicted of a felony, a person could face up to five years’ imprisonment. This usually means serving time in a county jail instead of a state prison. Fines can reach $50,000 or double the amount of the fraud.

What should an insurer do?

When an adjuster sees red flags—like huge medical bills for a tiny car scratch—the company must take these actions:

• Refer to the Special Investigation Unit (SIU): The law requires every insurance company to have an SIU. These investigators verify that medical records are genuine.
• Use social media and surveillance: Today, soft fraud is often caught on camera. If someone claims they cannot walk but posts photos of themselves hiking, their case will likely fail.
• Request medical exams: Insurers can often request an Independent Medical Examination (IME). This is an objective checkup by a third-party doctor.
• File a fraud report: If the company finds proof of a lie, they must report it to the California Department of Insurance.

These steps help verify that every dollar paid out is for a genuine injury. Following these rules protects the company. It also keeps the legal process honest for everyone.

Protecting the integrity of the system

Lying about injuries hurts the whole system. By using strict laws and careful investigations, insurance companies ensure that money goes to the people who truly need it. If questions arise about a claimant’s medical history, an experienced attorney can help evaluate the claim.  They may also determine whether there’s enough evidence to support it.