A research study by Quality Planning, a tool used to rate the integrity for personal auto insurers, found luxury vehicles being reported as farm equipment in locations where less than 1% of the population engages in any form of an agricultural living.
Insurance providers offer discounts of up to 20% on annual insurance policies to those who use their vehicles for agricultural use on farmland. Farm owners or business owners have the ability to claim their properties as business expensive or equipment, much like any business owner. The differences lies with the discounts available to farm overs. The discounts are available because the vehicles used on the farm are far less likely to be involved in an accident, lowering the possible risk for insurance providers.
The problem falls with the type of vehicles being claimed as farm equipment. Quality Planning analyzed over 80,000 policies and vehicles, claiming farm equipment, over 8% of the vehicles were considered to be a violation of the terms or insurance fraud. Possible fraud was determined by geocoding and Google maps, allowing agents and Quality Planning specialists to determine whether the address where the cars were housed were actually located on farm land or where agricultural practices occur regularly.
Vehicles being claimed as farm equipment have been an Audi A4, a Cadillac Seville, Porsche Carrera, and a BMW Z4. The report of the Audi A4, was reported as farm equipment in Brooklyn, N.Y, where less than 1% of the total population own or operate on farm land, according to the 2010 U.S. census data.
Claiming a non-farm equipment vehicle on an insurance policy is easier than assumed for the fact insurance providers seldom verify the vehicles. If a farm owner claims their luxury vehicle as farm equipment it would be assumed to be used to haul products and transport items. This being said, farm owners may very well be using their luxury or expensive passenger vehicles as equipment, but the truth behind it is many of these vehicles are being claimed as equipment on property where no farm or agricultural practices are taking place.
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