Which statement is true regarding interstate premium fraud?

The statement that an applicant lives in one state but registers their vehicle in another for cheaper rates accurately describes a scenario of interstate premium fraud. This practice typically involves individuals who seek to take advantage of differences in insurance premiums by misrepresenting their residential situation. Insurance rates often vary significantly from one state to another due to differing regulations, risk assessments, and overall market health. By registering a vehicle in a state with lower rates while residing in a more expensive area, the applicant effectively commits fraud to secure lower insurance premiums than they are entitled to, which can undermine the integrity of the insurance system.

The other choices, while they may involve untrustworthy behavior, do not specifically define the act of interstate premium fraud. Moving frequently or providing varying addresses could indicate instability or a lack of proper record-keeping but do not necessarily imply an intent to commit fraud across state lines. Having multiple policies across states could represent legitimate insurance choices or the need for coverage in different jurisdictions, but it doesn't inherently indicate fraudulent intent like the situation described in the correct answer.