Rating Errors Cost U.S. Auto Insurers $13.7 Billion, Says Consultant
Whether it be an honest mistake or outright fraud, inaccurate data on vehicles and drivers is costing the U.S. auto insurance industry dearly, according to a San Francisco-based consultant.
According to Quality Planning Corporation, an estimated $13.7 billion in premium revenues was left on the table by auto insurers in 2003 due to rating errors that diminished income. Changes that affect auto insurance premiumsincluding household composition, switching jobs, adding or deleting vehicles, and adding new driversare all subject to faulty and/or fraudulent reporting, the consultant noted.
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