So what are the chances that a vehicle tagged and insured inIowa is actually owned and driven in New York? Actually, they'repretty good if the driver doesn't mind committing a little rateevasion fraud. And apparently there are quite a few drivers who arewilling to take the chance to lower their car insurance rates.

The practice involves owners registering their cars out of stateto obtain lower insurance rates, but actually living in and drivingtheir vehicles in places where rates could be anywhere from a fewhundred dollars more to almost double the rate. For instance, adriver living in Long Beach, N.Y., would pay an average of $2,269according to CarInsurance.com's rate calculator. If he says helives in Toms River, N.J., he can almost cut his rate in half wherethe average would be $1,169.

For a closer comparison, drivers living in Attleboro, Mass.,which is only about eight miles away from Pawtucket, R.I., wouldpay half as much for their insurance using the same ratecalculations, $1,113 versus $2,290.

As more and more drivers are willing to lie on their insuranceapplications about where their vehicles are garaged, New Jersey isconsidering a bill that will impose stiff penalties for fraudsterswho participate in “phantom garaging.”

Howard Goldblatt, director of government affairs for theCoalition Against Insurance Fraud, testifiedbefore the Senate Commerce Committee this week in favor of A2281/S 1727, telling legislators that “passage wouldsend a strong message in New Jersey and throughout the nation thatinsurance fraud of any kind should not be tolerated.”

Goldblatt explained that point-of-sale fraud is a growingconcern in New Jersey and other states. “It is not unusual to drivethrough congested areas seeing autos with out-of-state licenseplates on the road, parked by homes and in driveways,” he told thecommittee.

While rate evasion impacts many different kinds of insurance, itseems to be most prevalent in the automobile sector. “Current fraudlaws in New Jersey do little to deter rate evasion and do notencourage prosecution. The proposed legislation would help insurersand law enforcement combat this crime,” he added.

While the bill primarily addresses motor vehicle fraud, it doesapply to other types of fraud such as health insurance fraud. Ifpassed, it will make motor vehicle fraud a second-, third- orfourth-degree offense and gives the Attorney General authority todevelop insurance fraud prosecution guidelines, which must bedisseminated to all county prosecutors within 180 days of the law'seffective date.

The Coalition and other fraud organizations have launched astatewide grassroots letter-writing campaign in support of thelegislation to state senators.