New Jersey is taking aim at residents who fraudulently register their vehicles or obtain auto insurance in other states. The Assembly recently passed a measure that makes so-called “reverse rate evasion” a form of insurance fraud under state law. Under the practice, vehicle owners register and insure their vehicles in other states to get cheaper premiums, even though the Garden State is their principal residence or the insured vehicle is mostly kept in New Jersey.
Critics say this results in the state losing substantial revenues, causes higher premiums for those who properly register their vehicles and reduces insurers and stockholder profits. They also note that many out-of-state policies provide lesser coverage than what’s mandated under New Jersey law.
But since the state doesn’t include reverse rate evasion as a form of insurance fraud, such matters can’t be prosecuted by the state’s Insurance Fraud Prosecutor’s Office, which has called for changes in the law.
“Insurance fraud is not only wrong, but it costs honest drivers money through higher premiums,” said Wayne P. DeAngelo, D-Hamilton, one of the bill’s primary sponsors in the Assembly. “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.”
The Assembly passed the measure (A-2052) by an 80-0 vote on June 21. It now moves to the Senate, where it will be considered by the Commerce Committee. But that panel has not yet scheduled a hearing on the proposal.
If the bill becomes law, it would make reverse rate evasion a fourth-degree crime, which means violators can be jailed for up to 18 months. Specific fines would be determined by a judge under the state’s Insurance Fraud Prevention Act, according to the text of the bill.
Paul Loriquet, a spokesman for the state Attorney General’s office — which the Insurance Fraud Prosecutor’s office is part of — said it would support such legislation.
“It is something we’ve looked for in recent years,” Loriquet said.
Besides DeAngelo, the bill’s primary sponsors in the Assembly were Democrats Nelson Albano and Matthew W. Milam, both of Cape May Court House; Linda Greenstein of Hamilton (Mercer County); Annette Quijano of Union and Paul Moriarty of Turnersville.
Sen. James Whelan, D-Atlantic, is sponsoring the measure in that chamber. AP
does that mean that they will go after ALL those PA License plates here in lakewood?
its an unconstitutional law so they can pass it and get sued which will cost the taxpayer money so not only wont they get extra funds they will loose money from a lawsuit
It will also go after all the Lakewooders who have a NY plate…
actually insurance costs more in NY than NJ. It is stupid to keep a car registered in NY if you live in Lakewood
It is unconstitutional to make a non commercial entity register a car
students will be exempt from the rule
How about a “Tow First, Ask Questions Later” policy starting first with illegally parked out of state cars…
it’s pure and SIMPLE PEOPLE, if you want to live here you MUST ABIDE BY THE LAWS OF THIS STATE. This LAW is for EVERYONE including “STUDENTS”, COMMERCIAL AND NON COMMERCIAL, and if you can’t or won’t abide by these laws by all means MOVE
its about time ! there are always some who will look to circumvent the law to save a buck
make them pay
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