It could be considered fraud if you misrepresent facts to the insurance carrier when insuring the car.
If you are forthright with the insurance company and they allow you to insure the car in the state where your rental property is because the car is registered and garaged in that state then there likely would not be any problems. If instead you insure the car in the state of the rental property but register, drive and garage it in another state, without advising the insurance provider, then this may fall under misrepresentation, a form of fraud.
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