- “Little White Lies” can impact auto insurance premiums
- June 19, 2015
Unreported life changes and little white lies have a big financial impact in the auto insurance industry – and, in the end, the everyday consumer.
Rate evasion, the term used to describe the inaccuracies on auto insurance policies – whether intentional or accidental – that result in lower-than-they-should-be premiums for the policyholder costs the insurance industry 16 billion dollars a year, according to Bob U’Ren, senior vice president of San Francisco-based Quality Planning.
Quality Planning works with insurance companies to identify areas of significant rating errors through the use of sophisticated database management, statistical analysis and modeling, customized survey design and highly targeted customer interaction.
U’Ren said for some consumers, the inaccuracies are accidental. A new driver is in the household, the use of the vehicle has changed or most commonly, the mileage driven each year has changed and the insurer was not notified of the changes.
“The most common is misstatement of annual mileage or how far people drive each year, how far they commute. Those are often mistaken by substantial amounts,” U’Ren said.
Of those consumers who do report their life changes, many withhold the true impact those changes may have, according to a study by Quality Planning. For example, when filing a change of address, 23.6 percent claimed this would not change their annual miles driven and 4.4 percent claimed this would not change their commute distance.Pages: 1 2
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