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Pennsylvania AG cracking down on auto insurance rate evaders

Posted On Thu, December 31, 2009

Pennsylvania Attorney General Tom Corbett is looking to crack down on out-of-state perpetrators looking to commit rate evasion and illegally obtain lower auto insurance premiums.

Because residents in many parts of rural Pennsylvania have significantly lower auto insurance rates than those living in neighboring cities such as New York City or Trenton because of the lower chance of an accident occurring, the state often has to combat out-of-state criminals who falsify data to say they are residents to achieve lower rates.

On December 24, 24 people, only one of whom was actually a Pennsylvania resident, were arrested and charged with insurance fraud and application for certificate of title or registration after attempting to use fraudulent means to get lower insurance rates.

Corbett said that New York and New Jersey drivers could save up to $4,000 every year through "rate evasion" by fraudulently using Pennsylvania as their address instead. However, he added that he was cracking down because $12 to $15 million in insurance claims that are fraudulently taken out through Pennsylvania policies that its true residents end up paying for through increased premiums.

"The real financial losers in this scam are the honest drivers of Pennsylvania, whose premiums increase when their insurance companies pay claims for drivers who lied about living in our state," he said.
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