After an investigation involving law enforcement officials from three states, Pennsylvania has charged 24 people with insurance fraud. The defendants, who hail primarily from New York and New Jersey, are accused of rate evasion or falsely claiming to be Pennsylvania residents in order to obtain substantially lower rates on their automobile insurance.

Pennsylvania Attorney General Tom Corbett said the defendants provided false information to the Pennsylvania Department of Transportation in order to obtain Pennsylvania drivers' licenses or vehicle registrations, which was then used to obtain insurance policies for their vehicles.

"Because of differences in automobile insurance premiums and coverage requirements, some New York or New Jersey drivers can save anywhere from one-thousand to four-thousand dollars per year by falsely claiming to live in Pennsylvania and insuring their vehicles here," Corbett said in a statement. "Large urban areas, like New York City, tend to have more auto accident claims and have higher rates than rural areas in nearby Pennsylvania, like the Poconos."

Rate evaders account for an estimated $12 to $15 million per year in insurance claims on Pennsylvania policies, Corbett said."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."

Each of the defendants is charged with one third-degree felony and two misdemeanor counts of insurance fraud. The felony count is punishable by up to seven years in prison and a $15,000 fine, while the misdemeanors are each punishable by up to five years in prison and $10,000 fines.




Keywords: auto insurance, fraud, rate evasion, Tom Corbett




Register or login for access to this item and much more

All Digital Insurance content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access