In a shocking incident, about 24 people were accused of being insurance and other related frauds. This group had 17 residents from New York, 6 residents from New Jersey and one resident from Pennsylvania.
General Tom Corbett, the attorney from Pennsylvania said that most of the accused said they belonged to Pennsylvania in order to get low rates on their auto insurances.
People from out of the state, would claim to be from PV and produce wrong information to the transportation department to get licenses, and further, these details would be used to make insurance. These people came under the list of those who did rate evasions. A term used for frauds who gave in wrong details about themselves pretending to be Pennsylvanians to get low insurance rates.
“The reason being insurance premiums in automobiles and their requirements for coverage are different, some New York or New Jersey drivers can save anywhere from $1000 to $4000 a year by wrongly claiming to stay in Pennsylvania and hence insuring their vehicles,” said Corbett.. “The actual financial losers in this scam are the honest drivers of Pennsylvania, whose premiums increase when their insurance companies pay claims for drivers who lied about living in our state.”
About $15 million is claimed by policies from such people every year in Pennsylvania. Their basic technique is to cover the lowest cost required and then claim the low insurance covering policy. Now when they are involved in an accident that took place in their native state, the requirements of coverage do apply and accident claiming costs shoot up.
A survey was done by the insurance council for research. This survey showed that residents of NY had accepted that an insurance claim had to increase to counter the premiums that were paid, when there was no claim. It is also stated that New York stands in the 9th position in staged automobile accidents all over the nation, hence increasing the claims for automobile insurance in New York.
The accused are charged with a strike of fraud in insurance, a 3rd degree felony awarding them a 7 year stay in prison, along with a fine of $15000. Not just this, they are also punished for fraud in insurance count (filling an application form with wrong information), and wrong title in application again taking them to prison for up to 5 years and a fine of $10,000.
These arrests took place, says Corbett by the combined efforts of New Jersey, Pennsylvania and New York.