Auto I nsurance Auto I nsurance Underw riting/ Rating
I nsurance Underw riting/ Rating Variables Driver Demographics Driver Demographics Driver History Driver History Type of Vehicle Type of Vehicle Vehicle History Vehicle History olicy 1 Traffic Citations: 2 speeding tickets Year: 2002 Unknown Name: John Smith in last 3 yrs Make: Honda Age: 32 Reckless Driving: none Model: Accord Gender: Male Auto Po A Accidents: id t none T i Trim: EX EX Marital Status: Single Driver Training: yes Engine: V ‐ 6 Credit Score: 680 Horsepower: 178 hp Vehicle Garaged: Albany, NY Vehicle Use: To/from work 5% of vehicle airbags are incorrectly repaired, leading No Difference No Difference No Difference to greater risk and potentially g p y higher future claims Policy 2 Traffic Citations: 2 speeding tickets Year: 2002 Severe Accident: Airbag deployed Name: Joe Smith in last 3 yrs Make: Honda Frame damage Age: 32 Reckless Driving: none Model: Accord Gender: Male Accidents: Accidents: none none Trim: Trim: EX EX Auto P Marital Status: M it l St t Si Single l Frame damage indicates the Driver Training: yes Engine: V ‐ 6 Credit Score: 680 vehicle’s structural integrity Horsepower: 178 hp Vehicle Garaged: Albany, NY has been compromised, Vehicle Use: To/from work leading to potentially higher future claims
I nsurance Underw riting/ Rating Process Insurance company receives Underwriting/rating system an application for auto an application for auto requests information to requests information to insurance either directly or confirm and supplement the through an agent applicant’ information Driver Demographics Personal & Underwriting g Vehicle Info Vehicle Info Driver History /Rating Type of Vehicle System Vehicle History Info Vehicle History Info Underwriting/Rating Decision or Score Insurance company determines insurability and premium based upon the underwriting/rating variables Do Not Insure: Insure & Investigate: Insure: Elect to not insure the Elect to not insure the Determine an insurance Determine an insurance Determine an insurance Determine an insurance applicant premium but refer to SIU for premium possible fraud
Vehicle History in the Underw riting/ Rating Process Underwriting Underwriting S Specific Vehicle History ifi V hi l Hi t /Rating Examples include: Vehicle History Info • Severe Damage System • Potential Damage • Ownership History • Mileage Underwriting/Rating Decision or Score Do Not Insure: Insure & Investigate: Insure: Elect to not insure the Determine an insurance premium Determine an insurance applicant but refer to SIU for possible fraud premium The insurance company may elect The insurance company may elect to The insurance company may elect to not insure the applicant if the incorporate a premium surcharge or to incorporate a premium surcharge p p g vehicle’s history indicates it poses hi l ’ hi t i di t it di discount based on the vehicle’s t b d th hi l ’ or discount based on the vehicle’s an undue insurance risk. history and its effect on the vehicle’s history and its effect on the insurance risk. The policy is referred vehicle’s insurance risk. to SIU when the vehicle’s history does not coincide with what was reported by the applicant. reported by the applicant.
CARFAX Data Sources Over 34,000 Sources of Data North America - 9 Billion Records North America - 9 Billion Records Public sources Corporate sources DMVs DMV S Service Centers i C State Inspections Vehicle Auctions Emissions Centers Warranty Companies Law Enforcement Insurance Companies Federal Agencies Collision Repair Facilities Not-for-Profit Organizations Automotive Recyclers Fleet Management Co's
Odom eter Readings HLDI Analysis of Vehicle y Mileage • One-year-old vehicles One year old vehicles averaged 44 miles per day vs. 27mpd for eight-year-old vehicles • Sport/Luxury vehicles averaged the lowest at 25 and 32mpd, respectively • Cargo Vans/Pickups averaged 49 49 and 41mpd, respectively d 41 d ti l
Underwriting/Rating Underwriting/Rating P Predictive Vehicle History Variables di ti V hi l Hi t V i bl Auto I nsurers Use CARFAX for… Severe Problem s Potential Dam age Ow nership I nfo Title Brands Other Accidents Number of Owners Salvage Frame Inspection Frame Inspection Registration Types Registration Types Flood l d Fire Failed Emissions Length of Ownership Total Loss Failed Safety Odom eter I nfo Severe Accidents Inspection 2 Avg Annual Mileage Frame Damage CARFAX Flood CARFAX Flood Odometer Readings Airbag Deployment Advisory Previously Stolen Est Current Mileage
Regulatory Approval By State NH Rating VT Underwriting Underwriting WA WA ME MT MA ND Underwriting & Rating OR MN NY WI ID SD Underwriting & Verification MI WY IA PA NE None OH IL UT NV WV CA IN RI CO MO VA KS KY CT NC OK TN SC AZ NM NM AR AR NJ AL GA MS MD LA AK TX DE FL HI
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