NJ Insurance Bill Adds Criminal Penalties for Auto Premium Evaders

August 31, 2015 · by rosenblumlawfirm · in

insurance fraudThere is a growing problem in New Jersey with drivers who lie about where they garage or who drive their vehicles in other states to save on auto premiums. In May 2015, Governor Chris Christie signed a bill making it a crime for drivers to falsely register vehicles in other states. With the passage of the bill, drivers who lie can now face criminal insurance fraud charges.

“New Jersey has added new enforcement teeth to curtail drivers who make the mistake of defrauding their auto insurers,” said Howard Goldblatt, director of government affairs for the national Coalition Against Insurance Fraud. The Coalition launched a letter-writing campaign in an effort to urge New Jersey state senators and Governor Christie to sign the bill.

Drivers in New Jersey have the highest auto premiums in the US, with an average $1,219 annually, and insurance scams contribute heavily to that cost. Some New Jersey drivers try to avoid these premiums by telling their auto insurer that they garage and drive their vehicle in locales with lower premiums, in particular the neighboring state of Pennsylvania. As a result, honest policyholders in New Jersey end up subsidizing premiums for the smaller pool of auto policyholders.

Under New Jersey Code of Criminal Justice 2C:21-4.6, an insurance fraud offense occurs when someone knowingly omits a material fact or makes a false or misleading statement to an insurance company.  Insurance fraud is a crime and is considered a third degree felony. In addition, multiple instances of insurance fraud can be a second degree offense, which comes with stricter penalties.

With the passage of this new bill, convicted drivers could face up to 10 years in state prison and up to $150,000 in fines.“A criminal fraud conviction with potential exit ramp to jail also can be a strong deterrent that helps put the brakes on rate evasion,” said Goldblatt. “The enforcement and deterrent power of insurance fraud convictions can finally make auto premium evasion a highway to nowhere.”

Even mere misrepresentations on an insurance claim can lead to a possible criminal investigation. If you are facing insurance fraud charges, contact Adam H. Rosenblum at The Rosenblum Law Firm for assistance by calling 888-815-3649 today.