Auto Insurance Claims: Settlement- must I report it to my insurance?, accident occured, legal ramifications

Question
Hello Richard,
I got into a car accident and I am trying to settle my case. The accident occured in California. The other party was at 85% fault. The insurance adjuster (not my insurance agent) told me that I can settle for let's say $5000 (medical bills) and report to my insurance agent that I had settled for $3000. That way I get to retain the $2000 and any other additional portions that my insurance agent did not take out from the $3000. The insurance adjuster (again, not my insurance agent) told me that by law they are not allowed to disclose to my insurance agent on the amount that we settle for. My questions are:
1) Is what I stated above true?
2) If true, is there any way for my insurance agent to find out the actual amount of settlement?
3) Are there any legal ramifications for not disclosing the truth to my insurance agent.

Thank you.

Answer
Hi Kathleen,

You shoul not do this. What this adjuster is suggesting you do is called INSURANCE FRAUD. If your insurance company paid out any amounts which they are entitled to be reimbursed out of any settlement you get, and you lie to your insurance company about the amount you settled for in order to keep some of the money which they are otherwise entitled to that is fraud. If your insurance company were to find out you could be arrested and subject to fines and/or imprisionment.

It sounds to me like this adjuster is saying this to you in order to con you into accepting a lower settlement than you are entitled to. If you had $5,000.00 in medical bills then your claim is likely worth $12,000.00 to $15,000.00. You should keep negotiating to get what you are entitled to. If they continue to try to con you then hire an attorney.

And yes your insurance company can find out the amount you were paid. All claim settlements are reported to a central database so that insurance companies can learn of past claims.

I hope this helps
Richard Hixenbaugh