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  • Dean Smith

Vehicle Rate Evaders Beware: Several States are Cracking Down

Howard Goldblatt, director of government affairs for the Coalition Against Insurance Fraud and contributor to their Insurance FraudBlog, posted that several states are cracking down on drivers who falsely register their vehicles in states with lower car insurance premiums.

There will always be a select group of individuals that cheat the system, and the auto-insurance system is no exception. These rate evaders typically don’t drive or live in the states that their vehicles are registered in. And even though not all states and/or jurisdictions recognize rate evading as insurance fraud, the following states/jurisdictions have decided that enforcement is necessary to combat insurance crimes and keep premiums lower for drivers:

Philadelphia/Pennsylvania: According to Goldblatt, “Years ago the then-Philadelphia DA offered amnesty for dishonest drivers to step forward and properly register their vehicles in Philadelphia instead of their falsely claimed addresses in the Philly suburbs or southern New Jersey. A number of folks set their registration record straight – including an employee in the DA’s office.”

North Carolina: More recently, the state identified that out-of-state drivers were registering their vehicles in-state. To crack down on rate evaders, North Carolina changed their policies when registering and insuring vehicles to require drivers to show proof of residence.

New Jersey: Just weeks ago, a bill was passed by the New Jersey Assembly to crack down on drivers lying about where they store or garage their vehicles. If the bill becomes law, more authority would be granted to the state to target these individuals.

New York: Drivers in New York are raising insurance risks and premiums for the state that they are falsely registering their vehicles in, without lowering insurance risks in their own state. How?

According to Goldblatt, “New York has seen insurance investigators, consumer and community groups identify numerous suspicious vehicles parked in residential neighborhoods in Staten Island and Brooklyn. The vehicles oddly had license plates from Virginia, North Carolina, Pennsylvania and Iowa. Visiting friends or relatives don’t own these vehicles. They’re driven by New Yorkers who are cheating the insurance system.”

A bill is in the works in Albany, New York to make false vehicle registering a crime in the state.

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