Individuals will have to pay a high amount of fine or face jail time in New Jersey if they lie about where they drive and garage the motor vehicle in an attempt to save on car insurance premiums.

This month, a legislation was signed by New Jersey Gov. Chris Christie making it a crime for drivers to falsely register vehicles in other states.

According to Howard Goldblatt, the Coalition’s director of government affairs, “New Jersey has added new enforcement teeth to curtail drivers who make the mistake of defrauding their auto insurers. A criminal fraud conviction with potential exit ramp to jail also can be a strong deterrent that helps put the brakes on rate evasion”.

Not paying auto premiums is a growing issue in New Jersey. Drivers in the state have the highest auto premiums in the U.S. at an average amount of $1,219 every year, so some dishonest New Jersey drivers attempt to avoid these high premiums by telling their auto insurer that they garage and drive their vehicle in locales with lower premiums. New York faces the same issue as premium evaders in the Empire State have been caught registering their motor vehicles in Iowa and Pennsylvania.

Neighboring Pennsylvania is usually used by Premium evaders as a destination state.

Goldblatt added, “Criminal penalties and ease of proving an insurance scam will encourage more prosecutors to take on more cases. The enforcement and deterrent power of insurance fraud convictions can finally make auto premium evasion a highway to nowhere.”

New Jersey drivers convicted of insurance fraud under the new law can face up to 10 years in jail and will have to pay an amount of up to $150,000 in fines for their wrong doing.

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