Someone Is Using Your Address For Their Car Insurance

If someone is using your address for their car insurance, they are engaging in a form of fraud called rate evasion. If someone else is using your address for car insurance and you don't report it, both parties may get jail time for car insurance fraud rate evasion. Typically, this type of auto insurance fraud is done to get cheap car insurance rates.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

UPDATED: Sep 15, 2020

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Here's what you need to know...

  • Insurance companies need accurate information to set rates, including your address
  • Lying about your true address is called rate evasion and it is a form of fraud
  • Insurance companies may refuse to cover claims, and some states are looking at jail time for rate evasion offenders

It’s natural to want to save money on auto insurance, but there’s a right way to go about the process.

While it may seem simple enough to use someone else’s address, this can lead to problems with claims down the road.

If you’re allowing someone else to use your address, then you should be aware of how this practice impacts other consumers and what risks your friend is facing.

There are better, legal ways to save money on auto insurance. Start comparison shopping today by entering your zip code above!

Insurance Companies Want Matching Information and Facts


Insurance carriers want to have accurate information regarding where a car is stored and who is typically driving it.

Loaning a vehicle out once in a while is acceptable, but having that car located across the state while registered and tagged through your address can be a problem.

Parents commonly find themselves in this situation. They let an adult child take an old family car along when they move out, but they don’t inform the insurance company of this change.

The risk with this practice is that the insurance can say that you misrepresented information to them and refuse to cover any accidents.

It may cost you a little more to pay for insurance based on your child’s new address, but it’s better to pay the premium and still be covered. If you find that the rate difference is just too high, then shop around for a more affordable plan.

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The State Also Wants to Know

State governments also expect to be provided with accurate, honest information.

The State of California requires drivers to notify the Department of Motor Vehicles within 10 days of relocation.

It may not seem like a big deal, but you need to provide the state with the correct address so that you’ll receive reminders about renewals and other important information.

In addition to using the address for standard notifications, the registration address is also where police will go if someone is involved in a serious accident to notify the next of kin.

Without accurate information in the state system, they may not be able to locate family members in a timely manner.

Why People Lie About Their Address


An address seems like such innocuous information, and you may be wondering why anyone would want to use your address rather than their own.

The simple truth is that people tell this lie to save money.

People who live in high-crime areas and big cities typically have higher rates, and it’s easy to lower them by telling the insurance company that you live in a quiet suburb.

If you have a family member there who’s willing to forward mail to you, then it seems like a good idea.

However, it’s very easy to prove actual residency, and the consequences for lying about your address can be harsh.

Fortunately, it’s easy to shop around for lower rates using an accurate address.

People with good driving records can ask for discounts, and homeowners may also be able to bundle their car and home insurance together to save a little more.

Insurance Fraud Hurts Everyone

There’s a misconception that defrauding a company only hurts that company, but this is far from the truth.

Industry experts agree that losses from fraudulent activities create:

  • Raising premiums
  • Slowing the claims processing
  • Possibly putting innocent people at risk

It’s estimated that one-third of all claims in New York City are fraudulent in some way, shape or form.

The top five states for fraudulent claims are:

  • California
  • Florida
  • Texas
  • New York
  • Maryland

Some types of fraud are committed by repair shops and lead to counterfeit air bags, sub-standard windshields, and towing ripoffs. Scam artists can stage accidents, and some unscrupulous agents have accepted premiums without ever setting up the required insurance.

However, policyholders also engage in fraud failing to notify companies of new drivers or lying about their address.

If you intentionally misrepresent information on the application, then the insurance companies can take a few steps.

They may forgive the omission and have you update information, but they can also cancel the insurance and refuse to cover claims.

Additionally, insurance companies can seek to recover any amounts they previously paid under claims before discovering the fraud.

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Prison is a Possibility

Criminal in handcuffs

States like North Carolina and Idaho have made it harder for people to register their cars there. Registering a car in those two states is more difficult because they have some of the lowest rates in the country, and they want to keep them low.

If you’re thinking that you have nothing to lose by helping out a friend, then you may want to check your local laws.

In 2012, the Pennsylvania Attorney General’s Office prosecuted a New Jersey man and 11 other people for illegally providing Pennsylvania registrations and insurance addresses to people living outside of the state.

North Carolina has also enacted a new law that makes engaging in this practice a Class 3 misdemeanor. If the vehicle in question requires a commercial driver’s license, then it’s a Class H felony to provide them with your address for insurance purposes.

New York also charged a group of people with insurance fraud after they fraudulently obtained commercial insurance policies and registrations for people located out of the area.

Protect Yourself and Other Policyholders

You can safeguard your own low insurance rate by refusing to engage in this practice.

Even though you may want to help out a family member, it’s not worth the risk that the entire policy might be invalidated due to fraudulent information.

A better option is to use online tools to conveniently shop different plans and help your friend or family member find a more affordable company.

Start comparison shopping for auto insurance with our FREE online quote tool! Enter your zip code below!

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

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