NJ Auto Insurance Fraud If You Fib To Your Agent

NJ Auto Insurance FraudPost Date January 21, 2013 – New Jersey Law Makers are pushing a new bill which would prosecute those NJ Auto Insurance Buyers  whom lie on their NJ Auto Insurance Applications.  The #1 reason NJ Auto Insurance buyers do not tell the truth to a NJ Auto Insurance Agent is to lower their Rates.  Reverse rate evasion in buying NJ auto insurance shall be considered as a form of insurance fraud and must carry civil and criminal penalties. The bill which proposed such provision, had just passed the NJ Assembly’s Financial Institutions and Insurance Committee on Monday, Jan. 14.  Accordingly, reverse rate evasion occurs when a person primarily living in New Jersey will fraudulently obtain his or her auto insurance policy from another state though they live in New Jersey or they primarily garage their vehicle on the said state. Currently, persons living in New Jersey who but maintain their auto policy from another state tend to enjoy lower premiums.

Fibbing to lower your NJ auto insurance rate is insurance fraud

Under the proposed NJ auto insurance bill, NJ residents who will declare to an auto insurer that their principal address is in another state when in fact they maintain principal residence in New Jersey will be considered perpetrating  an act of NJ Auto Insurance Fraud. This will also apply to auto insurance policyholders who will declare that their insured vehicles are garaged in another state when in fact it is being primarily kept within the Garden State. The said bill may not completely pass the Financial Institutions and Insurance Committee without seeing some amendments. Legislators amended a portion of the bill to clearly state an exemption to the reverse rate evasion provision. The exemption will only apply to residents who have legitimately obtained their auto insurance policy in another state due to second residence, or in the case wherein such persons are attending an educational institution in that state.


Michael E. Dortch
President &  Senior Agent
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 206