Insurance Fraud in Spain: When a Faked Claim Is a Crime

Reporting a claim that never happened, causing one on purpose or inflating the schedule of loss to collect more is not contractual sharp practice: it is the offence of fraud, and insurers pursue it with anti-fraud units, loss adjusters and private investigators. As criminal lawyers in insurance fraud cases, we set out what the offence requires, what sentences are in play, and where the line runs between fraud and a genuine claim that is simply disputed.

When Insurance Fraud Becomes a Criminal Offence

Insurance fraud has no article of its own. It is brought within the basic offence in Art. 248 CP, under which those who, with intent to profit, use deception sufficient to induce error in another, leading them to carry out an act of disposition to their own or another's detriment, commit fraud. Applied to the insurance contract, the structure has four parts: sufficient deception — reporting a loss that is non-existent, deliberately caused or inflated — the insurer's error, as it processes the file on a false factual basis, the act of disposition — payment of the indemnity or repair in kind — and intent to profit, with the resulting financial loss. The general elements of the offence are developed in our article on the offence of fraud under Art. 248 CP; what matters here is how they behave in the insurance relationship.

Two points set these cases apart from other frauds. The first is that the deception is aimed at an entity that is required to verify what it is told: whether the deception is sufficient is measured against a professional recipient that values, inspects and cross-checks, so a crude or easily verifiable statement will rarely sustain the classification. The second is that the relationship arises from a contract, and not every breach of contract becomes an offence: an inaccuracy in declaring the risk has its own answer in Insurance Contract Act 50/1980, and only enters the criminal sphere where there is deception directed, from the outset, at obtaining a benefit that was not due.

The Patterns That Reach the Courts

Total simulation is the clearest: the burglary that never took place, the vehicle theft where the car later reappears, jewellery that was never owned. Alongside it is the deliberately caused loss — the fire or the collision arranged on purpose — which carries its own separate classification: where a fire creates danger to life or physical integrity, Art. 351 CP imposes 10 to 20 years in prison, a framework that turns the financial claim into the least of the problems in the file.

The most frequent pattern, however, is exaggeration of a genuine loss: inflating the list of stolen items, inventing pre-existing goods, adding damage that predates the event, or producing invoices and estimates above the repair actually carried out. The key technical point is that the amount defrauded is the excess claimed over the indemnity that was due, and it is that excess which is measured against the 400 and 50,000 euro thresholds. Where the supporting documents are fabricated, a second offence appears: forgery of a commercial document under Art. 392.1 CP — 6 months to 3 years in prison and a fine of 6 to 12 months — or, for a private document, Art. 395 CP, with 6 months to 2 years in prison. It is treated together with the fraud as an instrumental concurrence under Art. 77.3 CP where the forgery was a necessary means of obtaining payment. The picture is completed by injury fraud — feigned sequelae or artificially prolonged sick leave in road traffic claims — and by double insurance, collecting for the same damage from several insurers.

Sentencing for the Basic Offence and the 400 Euro Threshold

The second paragraph of Art. 248 CP sets the sentence for the basic offence: 6 months to 3 years in prison. The provision itself lists the sentencing criteria, and they are worth bearing in mind because they are what gets argued in practice: the amount defrauded, the economic harm caused to the injured party, the relationship between that party and the offender, the means used, and any other circumstance that helps assess the seriousness of the offence.

The third paragraph introduces the quantitative threshold: where the amount defrauded does not exceed 400 euros, a fine of 1 to 3 months is imposed, unless one of the circumstances in Art. 250 CP applies. That same paragraph contains a specific repeat-offending rule: where the offender has been finally convicted of at least three offences of the same nature within the chapter, at least one of them minor, the custodial sentence in the second paragraph applies; spent convictions, and those that ought to be spent, are not counted. If the fraudulent claiming is repeated over time under a preconceived plan, the continuing offence also comes into play: Art. 74.2 CP requires the sentence to be set by reference to the total loss caused.

One common confusion should be cleared up. Art. 249 CP does not contain the general penalty for fraud, but specific forms punished with that same 6 months to 3 years in prison; its paragraph 1.a) punishes anyone who, with intent to profit, hinders or improperly interferes with the operation of an information system, or improperly manipulates computer data, and thereby obtains an unauthorised transfer of an asset. Filing an untrue claim through the insurer's customer portal is not computer manipulation: the deception operates on the people handling the file, not on the system, and the correct classification remains Art. 248 CP.

The Art. 250 CP Aggravations That Genuinely Apply

Art. 250.1 CP raises the sentence to 1 to 6 years in prison and a fine of 6 to 12 months. Of its list, four circumstances have real application in insurance fraud. Number 5 — a value defrauded above 50,000 euros, or a large number of people affected — is the one most often applied, and a house fire or a high-end vehicle is enough to exceed it. Number 4 concerns particular gravity, weighing the extent of the loss and the financial situation in which it leaves the victim. Number 6 covers abuse of personal relationships or exploitation of the offender's business or professional credibility, and is the natural route where a broker, a loss adjuster, a garage or a clinic is involved. Number 7 covers procedural fraud: if, after payment is refused, the insurer is sued on manipulated evidence intended to mislead the court, the reproach is aggravated.

Other circumstances are invoked more readily than they should be. Number 1 requires the fraud to bear on essential goods, housing or other items of recognised social utility, which is hard to establish where what was defrauded is a cash indemnity; number 2 requires abuse of another's signature, or the removal, concealment or destruction of a public or official document. Art. 250.2 CP reserves 4 to 8 years in prison and a fine of 12 to 24 months for two situations: where numbers 4, 5, 6 or 7 concur with number 1, or where the value defrauded exceeds 250,000 euros. A full analysis of the provision is set out in our article on aggravated fraud under Art. 250 CP.

Attempt: the File Rejected Before Payment

Fraud is completed on actual receipt of the indemnity, which is when the transfer of assets occurs. Since anti-fraud units intervene before payment in a significant share of suspicious files, many prosecutions concern facts that stopped at the attempt stage: Art. 16.1 CP defines attempt where the offender begins to carry out the offence through external acts, performing all or part of the acts that should objectively produce the result, and the result does not occur for reasons independent of their will. Art. 62 CP then lowers the sentence by one or two degrees, in the extent deemed appropriate given the danger inherent in the attempt and the degree of execution reached.

The distinction is not academic. In an attempt there is no completed financial loss, which reduces both the sentence and the civil liability, and it also opens the door to voluntary desistance: Art. 16.2 CP exempts from liability for the attempted offence anyone who voluntarily prevents completion, either by desisting from the execution already begun or by preventing the result. Withdrawing the claim before the insurer pays may have that effect, but with an express limit: liability survives for acts already carried out that amount to another offence, and a false report already filed at a police station is precisely one of them. As to limitation, Art. 131.1 CP sets 5 years for the basic offence and 10 where the classification moves to Art. 250 CP, because the maximum penalty exceeds 5 years without exceeding 10.

Simulation of an Offence: the Fake Burglary Report

Many policies require a police report before a burglary claim will be processed. Where the burglary never happened, that report stops being a formality and becomes a separate offence: Art. 457 CP punishes with a fine of 6 to 12 months anyone who, before the officials referred to in the preceding article, falsely claims to be responsible for or the victim of a criminal offence, or reports a non-existent one, thereby causing procedural steps to be taken. The protected interest is not the insurer's assets but the functioning of the administration of justice, so the offence is completed as soon as the report sets an investigation in motion, even if the insurer never pays. It is a point that surprises those who arrive at the firm convinced that, having collected nothing, they have nothing to answer for.

Where the false report was the necessary means of obtaining the indemnity, the relationship between the two offences is resolved as an instrumental concurrence under Art. 77.3 CP, which imposes a sentence higher than the one that would have corresponded to the more serious offence, without exceeding the sum of those that would have been imposed separately. The position differs where the burglary is attributed to a specific person: that engages Art. 456 CP, which punishes the false attribution of criminal conduct with 6 months to 2 years in prison and a fine of 12 to 24 months where a serious offence is attributed, a fine of 12 to 24 months where it is a less serious offence, and a fine of 3 to 6 months where it is a minor one, and which additionally only allows proceedings once there is a final judgment or a final dismissal or discontinuance order in the main case. The differences between the two are set out in our article on simulation of an offence and false accusation.

What Loss Adjusters and Investigators Look For

Long before criminal proceedings exist, a private investigation is already under way. Anti-fraud units work from known indicators: losses occurring close to inception or renewal of the policy, recent extensions of cover, late reporting, round-figure schedules of loss with no documentary support, and overlaps with earlier claims by the same insured or through the same garage. From there they commission technical expert reports: cause and origin of the fire, accident reconstruction and biomechanics to test whether the injuries are compatible with the mechanism described, valuation of pre-existing goods, and traceability of the invoices produced.

On top of that comes field work by licensed private investigators, whose reports are later filed in the proceedings and confirmed at trial subject to cross-examination. Social media activity, vehicle location, access or alarm logs and third-party testimony are all examined. The insured should understand the reach of all this, but also its legal limit: the anti-fraud report is not, on its own, evidence for the prosecution. It supplies indicia, and a conviction resting on circumstantial evidence requires those indicia to be plural, consistent and not rebutted by a reasonable alternative explanation. However firmly held, the insurer's suspicion does not displace the presumption of innocence, nor does it relieve the prosecution of proving intent.

Defence: a Disputed Genuine Claim Is Not Fraud

The first line of defence is the simplest and resolves the most cases: the loss did occur. That the insurer disputes cover, cause or amount does not turn the claim into an offence. Insurance Contract Act 50/1980 has its own answers — the duty to declare the risk in its Art. 10, and the insurer's release where the loss was caused in bad faith by the insured in its Art. 19 — and those answers are civil: loss or reduction of the indemnity. Against the insurer's expert evidence, independent contradictory expert evidence on the cause of the damage or on its valuation is usually the decisive proof.

The second line is intent. In exaggeration files, the prosecution must establish that the gap between what was claimed and what was due reflects a will to deceive, rather than an optimistic valuation, a new-for-old replacement estimate, an imperfect recollection of the contents of a home, or the judgement of a third party who drew up the schedule. The offence in Art. 248 CP has no negligent form: a mistake in valuation falls outside it. To this is added the requirement that the deception be prior to the act of disposition, which rules out conduct after payment, and the work on quantum, which decides whether the act is a minor offence, the basic offence or the aggravated form in Art. 250 CP.

Where the facts are substantially made out, strategy shifts to sentence. Repairing the harm under Art. 21.5 CP — returning the indemnity received at any point in the proceedings and before the trial hearing — is an ordinary mitigating circumstance which, in the basic offence, helps bring the sentence into the range where suspension of execution under Art. 80 CP is available for sentences of no more than two years. Civil liability under Arts. 109 and 116 CP requires in any event the restitution of what was wrongly collected. And a practical warning for anyone summoned as a suspect: do not give a statement without a lawyer, keep the complete file — the claim form, correspondence with the insurer, estimates, invoices and dated photographs — and do not hand further documents to the company without first weighing their criminal significance.