Better yet, here in Virginia many of these vehicles are not even registered and are most likely not insured. A lot of these folks just go to Tractor Supply and buy "Farm Use" tags. This means they are not supposed to be used on the road, just on the farm, but you wonder when you see them driving down I-66 or the I-495 Beltway 20 miles from the nearest farm and the condition is enough to make you shake your head ruefully.
I would consider someone trying to save a buck on their insurance to be a blessing by comparison. Ask anyone who lives in a farming area like I do (Fauquier County, Va) and you will get similar stories.
What’s one of the best ways to save on car insurance? Claim your vehicle as farm equipment.
But, you might say, what if I don’t live on a farm?
No matter, said the owners of more than 6,000 cars who have done just that, according to Quality Planning, a company that verifies policyholder information for auto insurance providers.
The San Francisco-based firm carried out a survey of 80,000 vehicles listed as farm equipment last year. Using geo-locating to track down the areas to which these cars were registered, they determined that about eight percent of those vehicles lived in areas where less than one percent of the population worked in agriculture. One of these so-called farm vehicles, an Audi A4, lived on a ‘farm’ in Brooklyn, N.Y.
For those hoping to save on their auto insurance bills, it seems like a smart move: owners of farm vehicles save 20% on their insurance premiums, since cars in rural areas are considered less likely to suffer collisions or theft than vehicles in urban areas.
Individual annual insurance savings can vary – from $389 in the case of the aforementioned Audi, to as little as $61 in the case of another piece of farm equipment, an L.A.-based Cadillac Seville. Still, the savings are attractive to both policyholders and insurance agents, eager to pass on savings to their clients, and the practice ultimately costs the auto insurance industry $150 million per year.
Since insurance providers rarely verify claims of farm use, “it is an easy tool that cheats can use to reduce the cost of auto insurance,” according to Robert U’Ren, Senior Vice President of Quality Planning.
And while State Farm Insurance says it doesn’t file civil action against policyholders who engage in this type of insurance fraud, consider this before jumping on the bandwagon: if you live in a city, your convertible is just as likely to get into an accident whether it’s classified as a farm vehicle or not. And, should your insurance provider discover your fib, it could refuse to honor your policy altogether. And then where would you be?
[via the Los Angeles Times]
Photo: Sebastian Oliva/Flickr