Commercial use fraud in the personal auto insurance space is a widespread problem in the United States. It’s a tempting proposition for drivers looking to avoid more expensive commercial auto policies, and it’s a tricky situation for insurers to police.
Vehicle location data and insights company, Digital Recognition Network (DRN), has a solution to help insurers and brokers combat commercial use fraud. DRN’s Picture Proof product gathers vehicle sighting images to provide insurers with evidence of commercial use such as signage, commercial grade tool boxes, ladder racks, trailers, utility or commercial specific back ends and so on.
The company maintains over seven billion nationwide vehicle sightings and grows that by over 165 million every month. DRN data suggests at least 1% of the average personal auto book has commercial use issues, with figures ranging as high as 3% in states where the problem is more prolific, such as California, New York and Texas.
“There’s really no easy way for insurers to identify commercial use fraud of a personal vehicle,” commented Alex Young, vice president and general manager, Insurance, DRN. “Our product Picture Proof enables insurers to look at photographs of the vehicles in their personal books to determine whether they have commercial use attributes.
“We have a VIN database of vehicles that have a high propensity for being used for commercial purposes. Carriers can cross-reference their personal auto book of VINs against our extensive database, and if any potential issues flag up, they can take a query to their personal auto policyholder, using our photographs to help support the discussion.”
Insurers often only become aware of commercial use fraud at claims time. If carriers hand out underwriting discounts and then discover fraud upon claim, it might be too late to void the policy, and even if a policy can be nullified, they may still be liable for third party claims.
“The aim is to eliminate the issue before it gets on to an insurer’s books,” Young told Insurance Business. “Picture Proof is used at point of sale so the insurer doesn’t have to worry about a vehicle that’s already on their books – they can avoid it being there in the first place.”