How drivers cheat their insurers

Big on creativity, small on farming, New Jersey has the most phony applications for farm-use discounts on auto insurance. These kinds of tricks cost insurers $16 billion a year.

New Jersey has the most residents who enjoy illegitimate farm-use discounts on the price of their auto insurance. However, New Jersey has the 11th-smallest farming industry among the 50 states.

Farm discounts -- meant for cars and trucks used for work on farms and ranches -- were attached to, for instance, a BMW Z3, a Chevrolet Camaro, a Ford Focus, a Jaguar XJ6, a Porsche Carrera, a Mazda RX-7 and a Toyota Echo. Erroneous farm discounts were most prevalent in states with high-price auto insurance and are on the rise in New Jersey, Connecticut, Wisconsin and Maryland.

City and suburban drivers claim farm-use discounts for the reduction of 10% to 20% on the cost of their premiums. The industry calls its losses from these customers' creative or erroneous ratings "leakage."

MORE TOMORROW.

From: Gary E. Rosenberg (personal injury and accident attorney and lawyer; serving Brooklyn Queens Bronx)