Smart Auto Insurance Blog

According to the article “Pennsylvania Attorney General Charges 24 People With Auto Insurance Fraud” by Mark Mendell on topnews.in, 17 New Yorkers and 6 New Jersey residents claimed to be PA residents to obtain lower auto insurance rates.

This is a very serious offense and is definitely classified as insurance fraud.  Pennsylvania Attorney General, Tom Corbett, said the rate manipulation leads to $12-$15 million in claims on PA policies that affects the auto insurance rates of all the other drivers in the state.

Pennsylvania auto insurance quotes are significantly lower than rates in NY and NJ so it’s no surprise people would try to cheat the system to save a lot of money.  PA officials are taking this fraud very seriously.  The PA Attorney General spokesperson, Nils Fredericksen, says that the 24 defendant each face up to 7 years in jail and $15,000 in fines.

According to the article “Insurance Fraud Costs All of Us Money” by Jeanette Krebs on Pennlive.com, 7 out of 10 Pennsylvania drivers say they would not attempt insurance fraud.  That leaves about 2.5 million people who may consider fraud.  The same group of polled people believe that those who commit auto insurance fraud are rarely caught. 

Getting Pennsylvania auto insurance quotes already includes many factors most of which are based on individual information.  But the economy, business stability and fraud losses are all considered when auto insurance rates are determined.  This is why insurance fraud ends up costing all drivers on some level.  The worst part is that it is extremely difficult to catch these perpetrators.  According to the Franklin and Marshall University Poll about a quarter of respondents stated they would not report someone they knew involved in an insurance scam. 

In 1994 the fraud prevention authority was created as a funding mechanism, making funds available to law enforcement and prosecutors to manage insurance fraud.  The budget is approximately $11.6 billion which comes from insurance companies within the state.  Part of the money is also used to educate Pennsylvanians about fraud, such as TV ads letting people know they can go to jail for engaging in insurance fraud.