Pennsylvania Sting Nets 24 Arrests for Auto Insurance Fraud

December 30, 2009

Twenty-four people, including 17 New York residents, six from New Jersey and one Pennsylvania resident, have been charged with insurance fraud and other related offenses after falsely claiming to be Pennsylvania residents in order to obtain substantially lower rates on their automobile insurance, Pennsylvania Attorney General Tom Corbett said.

The practice, known as rate evasion, involved out-of-state residents providing false information to the Pennsylvania Department of Transportation in order to obtain PA drivers’ licenses or vehicle registrations. That information was then used to obtain Pennsylvania 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. “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.”

Corbett said it is estimated that rate evaders account for $12 to $15 million per year in insurance claims on Pennsylvania policies. Typically, rate evaders are trying to obtain insurance coverage for the lowest possible cost, so they normally obtain the minimum required coverage in Pennsylvania. When they are involved in an accident in their home state, the coverage requirements for that state apply and the cost of the accident claim increases.

A survey by the Insurance Research Council found that New Yorkers are more likely to agree that it is acceptable to increase an insurance claim in order to make up for insurance premiums paid when no claim was made, and the National Insurance Crime Bureau reports that New York ranks ninth in the nation for staged auto accidents. These and other factors serve to increase the cost of auto insurance claims in New York.

Each of the defendants is charged with one count of insurance fraud (filing or presenting false, incomplete or misleading information to a government agency), a third-degree felony punishable by up to seven years in prison and a $15,000 fine; along with one count of insurance fraud (filing an application for insurance containing false information) and one count of false application for certificate of title or registration, which are both first-degree misdemeanors which are each punishable by up to five years in prison and $10,000 fines.

Corbett said the arrests are the result of a collaborative effort by law enforcement agencies in Pennsylvania, New York and New Jersey.

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Latest Comments

  • March 15, 2010 at 2:46 am
    NY Andy says:
    Way more scumbags drive here with Sunshine plates than any others, yet Florida just decided to sit back and relax...
  • December 30, 2009 at 12:46 pm
    tom says:
    Send the police to Staten Island, you will find 24000 additional
  • December 30, 2009 at 12:44 pm
    Ray says:
    As a New York resident, I am glad to see these scofflaws get caught. Hang 'em is my judgment!
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