Auto Insurance Fraud Raises Rates for All

01/10/2010

One reality that auto insurance customers often face is that if they live in heavily populated urban areas, they can typically expect to pay more because of the increased likelihood that one will have to file a claim.

Some people try to get around this by falsifying their registration information, claiming that they live in nearby states or rural communities where rates are likely to be lower. However, engaging in such fraud invites the risk of criminal prosecution, and it also helps increase insurance rates for everyone.

With that in mind, Pennsylvania Attorney General Tom Corbett recently announced that 24 people were being charged with insurance fraud for falsely claiming to be residents of the state and trying to secure lower rates in the process.

According to the announcement, 17 of the defendants are New York residents while six are from New Jersey. Both states have some of the highest auto insurance rates in the nation.

Corbett went on to note that in his state alone, rate evaders add as much as $15 million each year to the total amount of auto insurance claims that are filed, which is paid for in the form of higher premiums.

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