THURSDAY, JUNE 11, 2015
In May, 2015, Governor Christie signed into law new legislation which provides for civil and criminal penalties for residents who fraudulently obtain auto insurance in another state when their primary residence is in New Jersey or they principally keep their insured vehicle in New Jersey. This law was enacted because the NJ Office of the Insurance Fraud Prosecutor has documented an increasing number of cases where NJ residents insure their vehicles in states such as North Carolina and Pennsylvania in order to avoid higher rates. This situation is called "reverse rate evasion", and is now considered a crime in the fourth degree, as well as a violation of the New Jersey Insurance Fraud Prevention Act.
The bill's provisions do not apply to individuals who insure a motor vehicle in another state because they own a secondary residence or attend an educational institution in that other state, as long as the person truthfully discloses to the insurance company or producer of that policy their state of primary residence and where the vehicle is principally garaged.
The bottom line - if New Jersey is your state of primary residency and your vehicles are garaged in the state, then you must have a New Jersey Auto policy or face criminal and civil penalties for insurance fraud.