A recent study by California auto insurance providers has uncovered a significant amount of insurance fraud. At stake were $150 million of unpaid premiums, losses that accrued through the exploitation of farm vehicle discounts.
Most auto insurance programs offer discounts for vehicles that are used for agricultural production. These discounts can reach 20 percent for vehicles used exclusively on the farm. Quality Planning, a San Francisco based company that verifies auto insurance policies, recently completed an evaluation of about 80,000 policies that claimed farm use discounts.
The results of the audit were troubling. About 8 percent of the 80,000 vehicles that claimed the farm discount were from regions where less than 1 percent of the population was engaged in agricultural production. In addition, several big ticket sports cars, like Porches, Audi A4s, and Cadillac Sevilles, were registered as farm vehicles.
Many auto insurers acknowledge that some fraud is inevitable. Routine investigation of insurance policies is the typical way to root out insurance fraud, and many of the larger insurers do not have punitive measure built into farm insurance exploitation. While the offending vehicles will lose their discount, companies like State Farm are more concerned with frightening away legitimate farm discounts than prosecuting relatively minor instances of fraud.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting .
Follow us on: Twitter
Written by: Justin Ellison / Farm Plus Staff Writer