There are a variety of ways in which people can cheat on their insurance. One way is for people to use someone else’s address for their auto insurance, such as in another state or even a county. You may think that it can’t make that much of a difference, but actually some could save hundreds or even thousands a year doing this. The temptation is utterly clear, but there are consequences in cheating of course. If your car is registered in the wrong location, you could see your auto insurance claim invalidated or see a bill in your mailbox for the unpaid premiums.
It may seem harmless to simply fake your address, but this is known as rate evasion and is considered a form of insurance fraud, so it is important to be honest with insurers. With rate evasion, people claim to live in another state or that their car is garaged there, in order to pay lower insurance rates. They might also say they live in another, less costly county in the same state. One of the top problems is that people living in the right state and right location end up having to pay higher premiums to make up for the cheaters. On the other hand, drivers in the area that is falsely claimed end up having their premiums rise, because if the cheater wrecks then it makes the statistics of that state look worse, thus raising premiums in the long-run.
Some states are trying to crack down on the practice of rate evasion. North Carolina and Idaho, which boast some of the lowest auto rates, have made it tougher to register a vehicle. In Pennsylvania, The Attorney General’s office has stepped up rate evasion prosecution. Even last year, a New Jersey man and 11 co-conspirators were charged with illegally providing Pennsylvania vehicle registrations and insurance to people who lived in other states.
Now New Jersey has the practice in its sights. Even though under current law they aren’t able to prosecute at the moment, things could change in the near future. There is currently a bill working through the state’s legislature that would begin classifying rate evasion as insurance fraud which could put a person in jail for up to 18 months.
Cheating on insurance may seem easy and fail-proof, but as the days go on, more and more people are catching on to it and the cheaters’ luck may end.