Is address fraud an auto insurance issue?

Is Address Fraud An Auto Insurance Issue?

If a driver uses any address other than the one where he is currently living when he registers his vehicle or applies for automobile insurance, he is committing fraud. Address fraud happens when an individual intentionally uses someone else’s address, a former address or a fictitious address in order to gain certain benefits that they would not normally be entitled to and in the case of automobile insurance, obtain a much lower rate than they would if they actually used their real address.


Where You Live Affects Rates

Adress fraud and auto insurance issue

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Insurance companies based their automobile policy premiums in part on where a client currently lives. Some insurance carriers charge a higher premium for cars owned by individuals living in certain zip codes rather than others because statistics show that certain areas of the city have higher crime rates, more car accidents and thefts, or other issues that make it riskier to own and operate a car in that specific neighborhood. ¬†When an insurance company asks a policy holder to list their “home address”, they are asking for a permanent residence, the place where that individual receives mail and uses to open bank accounts, credit card accounts and to apply for employment. Some unscrupulous individuals will list an address showing residence in a state that does not require insurance coverage or has very minimal requirements in order to avoid paying higher insurance premiums.


Out of State Registration Fraud

Many individuals attempt to secure a lower automobile insurance rate by using an old out-of-state address or a relative’s address out of state when they register their vehicle. Some people conveniently ‘forget’ to update their old records when they make either an inter-city or inter-state move and continue to use an old address so that their insurance rates do not change. But by doing this, they are actually committing insurance fraud. By using an address at which they do not permanently reside or no longer reside, they also risk finding themselves without insurance coverage in the event of an accident or when they need to file a claim. Insurance companies are fully within their rights to rescind their contract to provide coverage in the event of an accident involving damage to personal property or injuries incurring medical expenses, which could leave the policy holder subject to thousands of dollars in financial responsibility in addition to criminal charges for fraud.


Claiming a Multi-Car Discount

Using a false, outdated or wrong address on an automobile insurance policy in order to obtain a multi-car discount is another fraudulent activity that results in everyone having higher insurance rates. A young driver may pretend that they are still living at home or a parent will list a son or daughter as still living at home so they can all qualify for a multi-car discount at the same residence, when they are all actually living in separate locations. Using address fraud to obtain lower car insurance rates is a gamble smart individuals never take. Once convicted of address fraud, they may not be able to obtain insurance in the future and their automobile insurer may press to file criminal charges in addition to filing a lawsuit to recover any previous claims received under false pretenses.

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