Auto insurance fraud is the latest NJ Assembly target

Auto insurance fraud
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Auto insurance fraud new jerseyA new bill has been sponsored by Assemblyperson Wayne P. DeAngelo (D) to implement a crackdown.

A new bill A2204 is before the Assembly, having been sponsored by Assemblyperson Wayne P. DeAngelo (D-Mercer/Middlesex) with the purpose of targeting the residents of the state who are purchasing their auto insurance in other states through fraudulent means, despite the fact that they reside primarily within New Jersey or the insured vehicle is primarily kept there.

This is considered to be a form of fraud that is becoming quite costly within the state.

According to DeAngelo “Insurance fraud is not only wrong, but it costs honest drivers money through higher premiums.” He went on to explain that “We’ve made a lot of progress in controlling auto insurance rates, but we still have a long way to go and cracking down on fraud needs to be a big part of that continuing effort.”

DeAngelo dislikes that it is not currently possible to prosecute this form of auto insurance evasion.

He stated that the Office of the Insurance Fraud Prosecutor is not capable of prosecuting cases of reverse rate evasion because it is not officially deemed to be auto insurance fraud. However, that office has been documenting this growing trend, as residents obtain their coverage in Pennsylvania and North Carolina in order to be able to avoid the increasing rates within their own state.

DeAngelo pointed out that the prosecutor had been suggesting this alteration to the regulation in the state for over four years, and that he believes it is time to finally pursue it in order to benefit those residents who are abiding by the law.

This bill would label the reverse rate evasion to be an official form of auto insurance fraud. These cases would therefore be considered a violation of the New Jersey Insurance Fraud Prevention Act. It would be considered to be a fourth degree crime and would allow various types of civil penalties to be applied. The hope is to reduce the number of vehicle owners in the state who are misrepresenting their primary residences to decrease their premiums. The bill has been released by the state’s Assembly Financial Institutions and Insurance Committee.

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