So let’s say you don’t live in Washington or Oregon, and you don’t want to buy a GM vehicle, what do you do to save on car insurance? Easy: You say you drive it on your farm. Auto insurers offer farm-use discounts of up to 20 percent. And a lot of less-than-gentleman farmers harvest the savings.
Quality Planning verifies policyholder data for auto insurance companies. They looked at 80,000 vehicles for which the farm-use insurance discount was claimed. About 8 percent, or 6,382 vehicles, were housed in ZIP Codes where there is little or non agriculture. Porsche Carreras, Mercedes SL550s and BMW Z4 were found on farms that do not exist.
An Audi A4 classified as a farm vehicle was found in Brooklyn, N.Y. ($389 annual savings.) A Cadillac Seville in Los Angeles was listed as a farm vehicle (annual savings $61, some people cheat at all cost.)
According to Quality Planning, the virtual farmers cost the insurance industry $150 million a year.
Farm use is rarely verified, writes the Los Angeles Times. Sometimes it’s the customer who lies. Some brokers cheat to cut premiums to win business. While misrepresentation usually remains undetected and unpunished, it can bite the wannebe farmer painfully when the insurance is needed. If the alleged farmer is in an accident and the insurer discovers the misrepresentation, the company might deny the claim. And that’s no small potatoes.