S.8363 (Golden) / A.2288 (Morelle)


Director, Government Affairs


S.8363 (Golden) / A.2288 (Morelle)


Creation of Insurance Fraud in the Fourth Degree



The Business Council supports S.8363 (Golden) / A.2288 (Morelle) which would include under fourth degree insurance fraud the registering of a vehicle in a state other than New York when the vehicle is principally used and garaged in New York. The bill also provides exceptions for persons who insure a motor vehicle in another state where they have a second residence and for college students.

This common sense approach classifies the registration and insuring of a vehicle in this fraudulent manner as the crime of insurance fraud.  This is a necessary course of action because the pervasiveness of people, quite often in New York City, purposefully improperly registering their vehicle in other states for lower insurance rates is quite high.

The New York Department of Financial Services' Financial Frauds & Consumer Protection Unit (FFCPU) 2012 Annual Report showed that the total amount of reported premium lost in 2012 due to rate evasion by New Yorkers improperly insuring their vehicles out of state was over $3 million. Additionally, the sponsors note that State and local governments are missing out on millions of dollars in revenue for registration fees, license plate fees, title fees and a vehicle use tax in the case of New York City residents.

Finally, this type of fraud corrupts auto insurance rates because claims are not properly assigned to the correct rating territory.  This results in consumers paying far more for insurance in some areas based on risk in a completely different market. 

For these reasons, The Business Council encourages passage of S.8363 (Golden) / A.2288 (Morelle).