If you write personal lines auto policies, you know that you have commercial use on your book. But you may be surprised to learn that number is likely much higher than you think. Our studies show that up to 10% of your book is made up of at-risk vehicles like half-ton trucks or larger, cargo vans, sprinters and transits. And of that 10%, we typically see at least 4% commercial use and even up to 10% in some cases. As one carrier said to us, "commercial use is beyond an epidemic."

Commercial Use Hits Combined Ratios

Want to make a quick and positive impact on your combined ratio? Do something about commercial use. If you lose $1000 in annual premium differential for every policy written as personal that should be commercial, the numbers quickly become staggering and can add up to the millions for larger carriers. It's no secret that carriers face fraud at every turn. And here's the dirty little secret these fraud perpetrators believe: insurance fraud is a victimless crime. No harm? No foul? On the contrary, we all pay for fraud. Yet, year after year, research by the Coalition Against Insurance fraud and other organizations has shown that consumer attitudes toward fraud are in a downward spiral of growing tolerance. The percent of people who say it is acceptable to commit fraud seems to steadily grow.

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