Insurance Fraud Charges in South Carolina: What You’re Really Facing

Insurance fraud charges in South Carolina can be a felony carrying up to 10 years in prison, plus fines, restitution, and separate civil penalties. Under state law, insurance fraud means knowingly presenting a false claim for payment to an insurer, or helping someone else do it.

The level of the charge depends on the dollar amount of the claim, and the state prosecutes these cases through a dedicated Insurance Fraud Division in the Attorney General’s office.

What Counts as Insurance Fraud in South Carolina?

The core offense sits at Section 38-55-170 of the state code. A person commits insurance fraud when they knowingly cause a false claim for payment to be presented to an insurer doing business in South Carolina, or knowingly assist, solicit, or conspire with someone else to do so.

The word that carries the case is “knowingly.” A genuine mistake, an honest dispute over what a policy covers, or a good-faith estimate is not the same as fraud. The state has to prove you knew the claim was false and presented it anyway.

Common examples include:

• Staging an accident or faking a theft or loss
• Inflating or padding a real claim with damage or injuries that did not happen
• Billing for medical treatment or repairs that were never provided
• Setting a fire to collect on a property policy
• Lying on an insurance application to get coverage or a lower rate

What Are the Penalties for Insurance Fraud?

South Carolina ties the penalty to the amount of the claim. Under Section 38-55-170:

• Claim of $2,000 or less: a misdemeanor, punishable by a fine up to $1,000, up to 30 days in jail, or both
• Claim of more than $2,000 but less than $10,000: a felony, punishable by a fine at the court’s discretion, up to 5 years in prison, or both
• Claim of $10,000 or more: a felony, punishable by imprisonment up to 10 years or a fine up to $5,000, or both

If you filed multiple false claims against the same victim, the state can add those amounts together, which can push a series of small claims into felony territory. Courts also commonly order restitution to repay the insurer.

The Charge Is Not the Only Financial Hit

A criminal conviction is not the end of the money problems. South Carolina law under Section 38-55-550 allows civil penalties on top of any criminal punishment.

A first offense can bring a civil fine of up to $5,000, with higher amounts for repeat violations. So one act of insurance fraud can trigger a criminal sentence, restitution to the insurer, and a separate civil penalty.

Who Investigates and Prosecutes These Cases?

Insurance fraud in South Carolina falls under the Omnibus Insurance Fraud and Reporting Immunity Act, found at Section 38-55-510 and following. The system works like this:

• The Insurance Fraud Division in the Attorney General’s office reviews allegations and prosecutes
• The State Law Enforcement Division (SLED) investigates the underlying facts
• Insurers and others can report suspected fraud and receive legal immunity for reporting in good faith

That last point matters. Insurance companies have their own special investigation units, and they are motivated to flag and refer claims they think are false. Many cases start with an insurer’s referral, not a police call.

Common Defenses to an Insurance Fraud Charge

Every case is different, but defenses often center on knowledge and intent, since that is what the state must prove. Depending on the facts, a defense may focus on:

• No intent to defraud. The claim was a mistake, a misunderstanding of the policy, or an honest error, not a knowing lie.
• Insufficient evidence. The state cannot prove you knew the claim was false.
• Disputed valuation. The claim amount the state relies on to elevate the charge is wrong, which can lower the offense level.
• Constitutional issues. Evidence obtained through an unlawful search or a flawed interview may be challenged.

Because the charge level rises and falls on the claim amount, even reducing the dollar figure the state can prove may move a felony down toward a misdemeanor.

A Note on 2026 Changes

South Carolina lawmakers have been looking at revising the insurance fraud statutes, including proposals to restructure penalty tiers and add asset forfeiture provisions.

As of 2026, the tiered penalties above reflect current law, but because changes are under consideration, it is worth confirming the latest version of the statute when a case is charged.

Frequently Asked Questions

Is insurance fraud a felony in South Carolina?

It can be. A claim of $2,000 or less is a misdemeanor, but claims above $2,000 are charged as felonies, with up to 10 years in prison for claims of $10,000 or more.

Can I be charged if the insurer never paid the claim?

Yes. The offense is knowingly presenting a false claim for payment. You do not have to succeed in collecting for the charge to apply.

Will I have to pay the insurance company back?

Often, yes. Courts commonly order restitution, and you may also face a separate civil penalty under the Omnibus Insurance Fraud Act on top of any criminal sentence.

What if I made an honest mistake on a claim?

Intent is the heart of the case. A genuine mistake or a good-faith disagreement about coverage is not insurance fraud, and that distinction is often where a defense begins.

Talk to a Rock Hill Criminal Defense Attorney About Insurance Fraud

Insurance fraud cases move quietly, driven by insurer referrals and SLED investigations, and by the time charges land the state has a head start. At Okoye Law, our criminal defense team handles fraud and financial crime cases across Rock Hill, Fort Mill, and York County. Contact Okoye Law for a confidential consultation.