California Penal Code 550 makes it a crime to file false or fraudulent insurance claims, and it reaches well beyond the person who signs the claim form. Penalties range from six months in county jail for the smallest health care claims to five years in state prison for staged collisions and other straight-felony conduct, plus fines up to $50,000 or double the amount of the fraud and mandatory restitution to the victim.
What the Statute Prohibits
PC 550 is split into two subdivisions, and the split matters at sentencing.
Subdivision (a) covers the most direct forms of insurance fraud: filing a false claim, filing multiple claims for the same loss, staging a vehicle collision, filing a false motor vehicle theft or damage claim, filing false health care benefit claims, and creating or signing a false document to support a claim.1California Legislative Information. California Penal Code 550 A claim doesn’t have to succeed, or even be submitted, for the conduct to be criminal. Preparing a false supporting document is enough on its own.
Subdivision (b) targets the deceptive statements and paperwork that surround claims: false statements made in support of or against a claim, misleading documents prepared for an insurer, concealing events that affect someone’s right to benefits, and false statements made to obtain a motor vehicle insurance policy.1California Legislative Information. California Penal Code 550
Both subdivisions reach helpers. Aiding, soliciting, or conspiring with someone else to commit any of these acts carries the same criminal liability as doing it yourself.1California Legislative Information. California Penal Code 550
The Conduct PC 550 Covers
Auto Insurance Fraud
Staged collisions are the most recognizable auto fraud under PC 550. The statute specifically targets anyone who causes or takes part in a vehicle collision so a claim can be filed. It also reaches reporting a car as stolen when it wasn’t, exaggerating collision damage, and filing false claims for lost vehicle parts or contents.
Health Care Fraud
Health care fraud under PC 550 includes billing an insurer for services or equipment that were never provided, submitting duplicate claims for the same treatment, and billing for a health care benefit the claimant never used. The statute also extends its health care fraud provisions to workers’ compensation health benefits, so fraudulent billing on the workers’ comp side is treated as health insurance fraud under PC 550.1California Legislative Information. California Penal Code 550
California has a separate workers’ compensation fraud statute as well, Insurance Code 1871.4, which covers false statements made to obtain or deny workers’ comp benefits and carries its own penalties of up to five years in prison and fines up to $150,000 or double the value of the fraud.2California Legislative Information. California Insurance Code 1871.4
Property Insurance Fraud
Property fraud usually involves inflating the value of items lost or damaged after a fire, theft, or natural disaster, or claiming losses for property that was never actually damaged. Those fall under the statute’s general prohibition on false claims for a loss under an insurance contract.
What Prosecutors Have to Prove
A wrong claim is not automatically a criminal claim. Prosecutors have to prove, beyond a reasonable doubt, that you knew the claim or supporting information was false and that you acted with the specific purpose of cheating the insurer. Knowledge and intent are both required.
This is where many cases are fought. An accidental error on a medical billing form or an honest overestimate of property value is not insurance fraud. Prosecutors typically build intent through circumstantial evidence: patterns of similar claims, inconsistent statements, destroyed records, or proof the claimed loss never occurred.
Penalties by Category
PC 550 doesn’t have a single penalty. The statute creates three tiers based on which provision was violated and, for health care claims, the dollar amount.
Straight Felonies Under Subdivision (a)(1) Through (a)(5)
Filing a false claim, filing duplicate claims for the same loss, staging a collision, filing a false motor vehicle claim, and creating false supporting documents are always felonies, whatever the amount. A conviction carries two, three, or five years in state prison, plus a fine of up to $50,000 or double the amount of the fraud, whichever is greater.1California Legislative Information. California Penal Code 550 There is no misdemeanor option.
Health Care Fraud Under Subdivision (a)(6) Through (a)(9)
False health care benefit claims are treated as wobblers when the amount exceeds $950. Prosecutors can file the charge as a felony carrying two, three, or five years in prison and a fine up to $50,000 or double the fraud, or as a misdemeanor carrying up to one year in county jail and a fine up to $10,000.3California Legislative Information. California Penal Code 550 – Crimes Against Insured Property and Insurers
When the claim amount is $950 or less, the offense is a misdemeanor punishable by up to six months in county jail and a fine up to $1,000. Watch the aggregation rule, though: if fraudulent claims total more than $950 within any twelve-month period, the charges can move up to the wobbler tier.3California Legislative Information. California Penal Code 550 – Crimes Against Insured Property and Insurers
Subdivision (b) Violations
False statements in connection with a claim, misleading documents prepared for an insurer, and concealing events that affect benefit eligibility are also wobblers. A felony conviction carries two, three, or five years in prison and a fine up to $50,000 or double the fraud. A misdemeanor conviction carries up to one year in county jail and a fine up to $10,000.1California Legislative Information. California Penal Code 550
Enhancements for Prior Convictions
Prior convictions add real time. Anyone convicted under PC 550 who has a prior felony for insurance fraud under this statute, PC 548, or Insurance Code 1871.4 receives a two-year enhancement on top of the base sentence for each prior conviction. A third felony conviction under subdivision (a)(3), the staged-collision provision, triggers a five-year enhancement.1California Legislative Information. California Penal Code 550
Restitution
Every PC 550 conviction requires the court to order restitution, including repayment for any medical evaluations or treatment services obtained through the fraud. The court sets the amount and names the victims who receive payment.1California Legislative Information. California Penal Code 550 California’s general restitution statute separately requires courts to order full reimbursement for every economic loss the victim suffered because of the defendant’s criminal conduct.4California Legislative Information. California Penal Code 1202.4
How Long Prosecutors Have to File
Insurance fraud runs on a different clock than most crimes. Under Penal Code 803, the statute of limitations for felony insurance fraud does not start running until the offense is actually discovered. Because fraud is designed to stay hidden, the legislature carved out this discovery rule for offenses where a material element is fraud, and PC 550 is explicitly listed among the covered statutes.5California Legislative Information. California Penal Code 803
The practical effect: someone who submitted a fraudulent claim years ago can still be charged if the fraud was only recently uncovered. The clock starts when law enforcement or the insurer discovers the fraud, not when it happened.
When Federal Charges Enter the Picture
A PC 550 case does not always stay in state court. Federal prosecutors can bring separate charges when the fraud involves the mail, electronic communications, or a federal health care program.
Mail and wire fraud under 18 U.S.C. § 1341 carries up to 20 years in federal prison for a standard conviction. If the scheme affects a financial institution or involves benefits tied to a presidentially declared disaster, the maximum rises to 30 years and a fine up to $1,000,000.6Office of the Law Revision Counsel. 18 U.S.C. 1341 – Frauds and Swindles Because almost any insurance claim involves a phone call, email, or mailed document, federal prosecutors can reach most fraud schemes through this statute when they decide to.
Health care fraud has its own federal statute. Under 18 U.S.C. § 1347, defrauding a health care benefit program carries up to 10 years in federal prison. If the fraud causes serious bodily injury, the maximum rises to 20 years. If a patient dies as a result, the sentence can reach life imprisonment.7Office of the Law Revision Counsel. 18 U.S.C. 1347 – Health Care Fraud
Federal and state prosecutions can run at the same time. Acquittal in state court does not block federal charges over the same conduct, and the reverse is also true, because the dual sovereignty doctrine treats the two systems as separate. The size of the fraud, whether federal programs like Medicare or Medicaid are involved, and whether the scheme crossed state lines usually determine whether federal prosecutors get involved.