If you live in New Jersey, you’ve no doubt noticed the number of cars with out-of-state license plates in driveways and parked on the street. You’re not imagining it, and it’s not an accident – New Jersey has an extremely high rate of insurance fraud, and now the state government is ready to crack down.
New Jersey drivers pay an average of $1,219 annually for their car insurance, which is the highest rate in the entire country. That’s why a growing number of car owners get their vehicles registered in cheaper states like Pennsylvania or Maryland, to dodge Jersey’s premiums and save a buck or two in the process. The problem? The practice, known as “phantom garaging” takes money out of the insurance companies’ pockets, and leaves it to the more honest New Jersey drivers to pick up the slack, in essence subsidizing the fraud.
Last week, at the urging of a group called the Coalition Against Insurance
Fraud, the state legislature passed a bill (A-2281) that would make false vehicle registration into an official insurance crime.
“Turning premium dodging into an insurance crime would add enforcement teeth to New Jersey’s efforts to clamp down on rate evasion.” said Howard Goldblatt of the Coalition, “The stronger likelihood of a criminal conviction also could help deter others from making the mistake of defrauding their auto insurer.”
The bill was supported by a grassroots campaign organized by the Coalition Against Insurance Fraud, including a letter-writing effort and a testimony before a state legislative committee.
A-2281 passed the Senate 38-0 and was approved 72-0 by the Assembly – now all it needs is the Governor’s signature to become a law.
If signed into law, the bill would mean that so-called “phantom garaging” would qualify as a violation of the New Jersey Insurance Fraud Prevention Act, and those convicted could receive fines of up to $150,000 and face as much as 10 years in state prison.
So consider yourself warned, insurance fraudsters: get your insurance square, or be prepared to face the consequences.
If you find yourself in trouble with any law in the state of New Jersey, be sure to call Chance BailBonds for fast, confidential, 24/7 bail bonds service.