Is it illegal to collect an insurance claim for a wreck?

Last year my grandmother stopped driving her car and let my brother who has no driver license or insurance use her car and was told that if stopped to tell police he stole car. He had a wreck in which car was tottaled after she gave him permission and told state farm that she had no knowledge he had her car nor gave him permission so that she could collect insurance check and not be held liable for allowing an uninsured driver use her car