In a report published in February 2011, Gwendolyn Bluemich examined the increasing problem of residents in New York State registering their vehicles out-of-state to qualify for lower premium rates. This is, of course, illegal and causes a loss of millions of dollars to the state. Worse, when the fraud is discovered, the insurance companies affected cancel the policies. As by magic, this means those drivers were uninsured. You can guess what that does to the rates for everyone else.
When setting the premium rates, the insurers start with the identity of the driver. This obviously includes real world address and details of where the vehicle will be garaged. Because of traffic density, the risk of accidents is higher in large city areas. The levels of pay are also higher which means more expensive vehicles on the road. They usually cost more to repair. According to the list produced by the National Association of Insurance Commissioners, rates are highest in the cities of the North-East. This offers great temptation to the residents of these cities to register their vehicles in rural areas or adjoining states. Throughout America, it's a crime to register your vehicle in a state where you have no residence. It also makes law enforcement more difficult if you have registered your vehicle at a "false" address, say if you have run a red light and been caught on camera, or have picked up a parking ticket.
It's very difficult to decide how big this problem is. By definition, the misreporting of residential address only becomes obvious when there's a formal check. A lack of verification procedures also encourages the fraud. For example, Pennsylvania has lower rates than in New York, and does not require proof of identity or date of birth before issuing a vehicle registration. It's quite easy to get local offices of the Bureau of Motor Vehicles to accept counterfeit identification documents. Worse, Pennsylvania has no effective system for identifying uninsured vehicles. In a recent audit, it was discovered some 1,600 New York vehicles were registered as garaged at just 14 Pennsylvanian addresses.
Given the difficulty investigating the scale of the problem, it's perhaps surprising to see New York State Senate passing a bill to create new offenses and increase penalties. There are, of course, to be new powers of investigation. If auto rate evasion is detected, it will be treated as a class E felony with enhanced penalties for using counterfeit ID documents or certificates of insurance. Except what's the point of threatening higher penalties if there's no effective enforcement of the current laws. Thousands of parking and red light camera tickets go unpaid every year but there's no action. It's not relevant we are all paying higher auto insurance rates because of this fraud. The state will not spend the money on additional staff to investigate and pursue fraudsters. It's just not a high enough priority for election purposes. So this all becomes an encouragement to more people to register their vehicles out-of-state. They get away with cheap auto insurance while we all pay more. And don't imagine this is just a problem in New York. It's happening in every large city near you.
When setting the premium rates, the insurers start with the identity of the driver. This obviously includes real world address and details of where the vehicle will be garaged. Because of traffic density, the risk of accidents is higher in large city areas. The levels of pay are also higher which means more expensive vehicles on the road. They usually cost more to repair. According to the list produced by the National Association of Insurance Commissioners, rates are highest in the cities of the North-East. This offers great temptation to the residents of these cities to register their vehicles in rural areas or adjoining states. Throughout America, it's a crime to register your vehicle in a state where you have no residence. It also makes law enforcement more difficult if you have registered your vehicle at a "false" address, say if you have run a red light and been caught on camera, or have picked up a parking ticket.
It's very difficult to decide how big this problem is. By definition, the misreporting of residential address only becomes obvious when there's a formal check. A lack of verification procedures also encourages the fraud. For example, Pennsylvania has lower rates than in New York, and does not require proof of identity or date of birth before issuing a vehicle registration. It's quite easy to get local offices of the Bureau of Motor Vehicles to accept counterfeit identification documents. Worse, Pennsylvania has no effective system for identifying uninsured vehicles. In a recent audit, it was discovered some 1,600 New York vehicles were registered as garaged at just 14 Pennsylvanian addresses.
Given the difficulty investigating the scale of the problem, it's perhaps surprising to see New York State Senate passing a bill to create new offenses and increase penalties. There are, of course, to be new powers of investigation. If auto rate evasion is detected, it will be treated as a class E felony with enhanced penalties for using counterfeit ID documents or certificates of insurance. Except what's the point of threatening higher penalties if there's no effective enforcement of the current laws. Thousands of parking and red light camera tickets go unpaid every year but there's no action. It's not relevant we are all paying higher auto insurance rates because of this fraud. The state will not spend the money on additional staff to investigate and pursue fraudsters. It's just not a high enough priority for election purposes. So this all becomes an encouragement to more people to register their vehicles out-of-state. They get away with cheap auto insurance while we all pay more. And don't imagine this is just a problem in New York. It's happening in every large city near you.