Auto insurance companies that scrutinize the occupations of their policyholders may have noticed that inner-city farming is a popular vocation. For example, it's on the rise in cities in New Jersey, Massachusetts, Connecticut, Wisconsin and Maryland. In some cases, the vehicles used for farming seem rather inappropriate — or certainly eccentric: BMW Z3, Chevrolet Camaro, Ford Focus, Jaguar XJ6, a Porsche Carrera, Mazda RX-7, Toyota Echo.
One explanation might be government largesse and farm subsidies. But a more likely explanation is that some consumers have figured out that they can save money — as much as 20% — on their auto insurance premiums by claiming a 'farm use' discount.
Quality Planning Corporation, the company that verifies policyholder data for insurance companies, selected 151,022 vehicles for which a farm use discount was claimed, and then examined the garaging address of each. Geo-coding techniques were then used to calculate population density for this address. Of the sample, 11,699 vehicles (7.74 percent) were found in areas where, according to a 2000 Census Survey, absolutely nobody is engaged in agriculture.
“When we discovered that a Jaguar XJ6 was reported garaged at a five-acre farm in Brooklyn, we weren't sure who'd be more interested, the DEA or the policyholder's insurance company,” said Ted Harris, manager of research and development at Quality Planning Corp. “We also found a correlation between this practice and those states where auto insurance is expensive. This sort of fraud can cost insurance companies millions of dollars each year — and unfortunately it's honest consumers who end up subsidizing the dishonest.”
How farm use discounts correlates with cost of auto insurance. States with highest incidence of Most expensive states for farm use discount abuse auto insurance 1 New Jersey 2 Massachusetts District of Columbia 3 Connecticut New York 4 Wisconsin Massachusetts 5 Maryland Louisiana 6 Georgia Florida 7 South Carolina Rhode Island 8 Tennessee Delaware 9 Virginia Connecticut 10 Ohio Michigan
