What is the statute of limitations for prosecution for insurance fraud?

Recently on our forum a user asked, “I know a couple who burned down their house to get the money from the insurance company. I am wondering what the statute of limitations is for insurance fraud. Can they still be prosecuted for this crimes if the crime was committed more than 10 years ago?” 

Overview of Insurance Fraud

Insurance fraud, which is the intentional action by an insurance policy holder to collect money in which they are not due, is a crime in all fifty states. It’s also big business, costing an estimated 80 billion dollars per year. So while insurance fraud may seem like a victimless crime, it’s not. In fact, because the insurance agencies are forced to defer the costs of their losses to other policy holders, we all pay the costs when people decide to commit insurance fraud.

So back to your question. If your friends intentionally set fire to their home in order to deceive the insurance company this is definitely a crime and could be either a misdemeanor or a felony depending on the nature and extent of the fraud committed.

in order for the state to prosecute your neighbors for insurance fraud, however, they will have to prove certain elements of the crime. Let’s take a closer look at the elements of criminal insurance fraud. 

  1. The individual made a misrepresentation of material fact.

The first element of insurance fraud should be easy to prove. The misrepresentation of the facts of the case- the fire was an accident- will have a direct impact on the insurance payment and settlement of the claim, which means it was a material misrepresentation of the facts of the case.

  1. The individual had knowledge that they were misrepresenting the facts.

Not only did your neighbors intentionally set the fire, they also filed a report that it was an accident. A statement they knew to be false. So unlike a claimant who might simply make a mistake when they reported that their car had 50,000 miles on the odometer at the time of a car accident, your neighbors knew that any claims of an accidental fire were false.

  1. The misrepresentation was done on purpose to deceive the victim.

Your neighbors also made the false statement in support and in connection with an insurance policy with the specific intention of deceiving the insurance company, a clear violation of the law.

  1. The victim believed the misrepresentation and relied on it.

The insurance company believed the claimant’s claims that the fire was an accident and relied on that information to settle the insurance claim.

  1. The victim suffered damages or loss as a result of the lie or deceit.

The insurance company relied on the false information and paid your neighbors a substantial amount of money to settle their false insurance claim.

Can you be charged with arson?

You did not specifically ask this question, but assuming the statute of limitations has not expired, your neighbors may also face arson charges. Arson, which includes intentional acts to damage property or fires set in homes, dwelling places, or buildings with people inside of them can be charged as a misdemeanor or felony.

If your neighbors were charged with arson in addition to insurance fraud, they could also face a lengthy prison sentence, high fines, restitution, and probation.

Statute of Limitations for Arson and Fraud

The statute of limitations for a crime determines the length of time the state’s prosecutor has to bring criminal charges against them. All states have statute of limitations for most crimes with the exceptions of murder and certain sexual assault charges.

To find out the statute of limitations for insurance fraud and arson in your state you would need to review the laws of your state. In the State of Texas, for example, arson has a ten-year statute of limitations and insurance fraud has a five year statute of limitations.

Bottom Line:

Now you did not specifically mention where the insurance fraud occurred, but if the insurance and arson crime was committed in the State of Texas, for example, and it was more than 10 years ago (assuming no one was killed in the fire) your neighbors could not be charged with a crime, which is unfortunate given the costs and severity of the crime.

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