Registering a car out-of-State to Save on Insurance
Written By: Benjamin Goldman, Esq.
New York City residents typically pay higher car insurance rates. The increased rates are due to a number of reasons, including the higher accident rate and theft rate in New York City. For this reason, NYC residents often register their car at an out of city or out of state address in order to avoid paying higher insurance rates.
The savings in insurance premiums can be shortsighted for a few reasons. Firstly you run the risk of your insurance company disclaiming coverage. If there is a big accident and the insurance company has to make a big payout, they will investigate when they notice something amiss. If it turns out the insured is not living where they claimed to be living at the time of the application, the insurance company has the right to refuse to pay out and you will be personally liable for any claims. Something else they may do, albeit more harmless, is to pay the claim but then refuse to renew coverage.
Besides the risk of loss of coverage, there is the criminal liability. Lying on an insurance application to obtain cheaper insurance is insurance fraud. Admittedly, this type of activity is not at the top of the to-do list for prosecutors and police officers. However, it can come back to haunt you when you have other problems with the law and this is added to the top when you are investigated. Another scenario is where prosecutors are forced to press charges for public relations purposes.
Pennsylvania is one such state that New Yorkers often use an address for insurance purposes. But the state has a dedicated Pennsylvania Insurance Fraud Prevention Authority that brings criminal charges against 5 to 10 people a year for falsely claiming to live in PA for insurance purposes.
At the end of the day giving false information on your insurance application is probably not worth the risk. To avoid high insurance rates, try to keep your record clean. Fight all traffic charges. Hire a traffic ticket attorney to go to court instead of you to fight all tickets.