What is Connecticut Auto Insurance Rate Fraud?

What is Connecticut Auto Insurance Rate Fraud? 

While finding cheap car insurance in CT might be a priority for some motorists, most do not stoop to devious solutions. However, officials are cracking down on motorists who mis-register their vehicles in order to lower their auto insurance rates. The controversy involves vehicle owners registering their cars out of state to obtain lower insurance rates, but actually living in and driving their vehicles in other locals. In these cases motorists attempt avoid higher auto insurance rates which in some places could be anywhere from a few hundred dollars more to almost double the rates they pay by registering their vehicles in another location.  

Auto insurance rates are often higher in largely populated urban areas with greater risk exposures than in more suburban and rural areas. For example, according to data from Bankrate, Detroit-area drivers on average payed 165% more than the national average for car insurance last year, while New York motorists payed 36% more, and Miami drivers payed 34% more. For the average driver in Detroit, this averaged out to over $10,000 in policy premiums last year.

While insurers offered a divers array of policy options with vastly different premium rates, auto insurance remains one of the largest reoccurring annual expenses for most Americans. With such high fluctuation in rates between locals, it can seem tempting for motorists in locations with high costs to look for ways to reduce their rates. However, motorists who wrongfully register their vehicles in locations where they do not actually reside are actually committing a type of insurance fraud called rate evasion fraud.

Due to the recent upswing in the number of motorists providing inaccurate information on their insurance applications about where their vehicles are being stored, driven and used, New Jersey is considering a bill that will impose stiff penalties for motorists who participate in this practice. Backed by the Coalition Against Insurance Fraud, New Jersey officials state that the proposed legislation will send a strong message both in New Jersey and throughout the nation and hopefully dissuade consumers from committing even seemingly small acts of insurance fraud.

If passed, the bill will make motor vehicle fraud a second-, third- or fourth-degree offense and the Attorney General will have the authority to develop insurance fraud prosecution guidelines for such offenses in New Jersey. Depending on the fate of the New Jersey bill, legislation in other municipalities could follow.

At Byrnes Agency, we understand that that doesn’t sacrifice quality can be hard to find. That’s why we specialize in offering comprehensive Connecticut auto insurance solutions at affordable rates to Windham County and New London County motorists. Our personal insurance specialists will help you find the Connecticut auto insurance solutions that are right for you. To learn more about our operation and all our offerings, contact us today at one of our offices near you.