{"id":1320,"date":"2016-10-06T15:08:00","date_gmt":"2016-10-06T15:08:00","guid":{"rendered":"https:\/\/tst418075918.wordpress.com\/2016\/10\/06\/how-to-solve-the-commercial-vehicle-classification-as-personal-vehicle-problem\/"},"modified":"2016-10-06T15:08:00","modified_gmt":"2016-10-06T15:08:00","slug":"how-to-solve-the-commercial-vehicle-classification-as-personal-vehicle-problem","status":"publish","type":"post","link":"https:\/\/test.veracityid.com\/new\/how-to-solve-the-commercial-vehicle-classification-as-personal-vehicle-problem\/","title":{"rendered":"How to solve the Commercial Vehicle Classification as Personal Vehicle Problem"},"content":{"rendered":"<p>It turns out that quite a few owners of commercial vehicles dishonestly insure them as personal vehicles. \u00a0Indeed in our personal automotive insurance policy database of millions of customers, roughly 1 percent of all vehicles are actually commercial. And it&#8217;s not hard to understand why \u00a0&#8211; it&#8217;s a lot cheaper. Commercial auto insurance is more expensive because it carries:<\/p>\n<ul>\n<li><b>Higher Liability Minimums<\/b>: Depending upon usage, commercial vehicles are often required to carry higher liability insurance limits. For example in California a personal minivan seating 7 is required to carry $15,000 per individual \/$30,000 per accident\/ and $5,000 property damage coverage or roughly $50,000 in total while an equivalent commercial van carrying passengers is required to carry a minimum of $750,000 in general liability coverage.<\/li>\n<li><b>Higher Risk<\/b>: \u00a0Commercial vehicles often have many potential drivers, who cannot be evaluated for their driving history. \u00a0Commercial policies are also broader &#8211; for example they often cover damages from pickup and delivery. And commercial vehicles are used for a wide range of different activities &#8211; some of them quite dangerous. All these higher risks lead to higher rates.<\/li>\n<li><b>Higher per vehicle value<\/b>: Commercial vehicles often have expensive features that personal vehicles don&#8217;t , like heavy duty suspensions or customized additions to carry and store equipment. \u00a0So the replacement value is higher leading to higher rates.<\/li>\n<\/ul>\n<p>These factors result in premiums that can be multiples of an equivalent vehicle on a personal auto policy. So it&#8217;s understandable that some customers would try to game the system. Unfortunately it&#8217;s often quite difficult to identify a vehicle with a Commercial Vehicle Misclassification Problem until a claim comes in. \u00a0And sometimes not even then. \u00a0This is because:<\/p>\n<ul>\n<li>Many commercial vehicles are the same makes and models as those commonly used as personal vehicles so <b>Vehicle Identification Numbers are not a useful guide<\/b> to identify them.<\/li>\n<li>Nor is Commercial registration a reliable guide to commercial use because to save money, <b>policy holders often register commercial vehicles as personal ones<\/b>.<\/li>\n<li>The <b>total value<\/b> to be covered often will exclude expensive commercial modifications that were acquired in the after market and <b>not reflected on vehicle purchase records.<\/b><\/li>\n<\/ul>\n<p>Needless to say, the Commercial Vehicles Misclassification Problem is a significant source of premium leakage. Assume conservatively that these misclassified vehicles would carry a commercial premium twice that of a personal policy. If the data are right and 1% of all insured vehicles in a portfolio are misclassified, then the premium leakage for this type of misclassification alone could equal or exceed 1% of revenue. \u00a0If that&#8217;s the case then eliminating even a fraction of these data defects could have a significant impact.<\/p>\n<p>VeracityID can help insurers crack this problem.\u00a0idFusion gives insurers tools like idAnalyze (TM) which allows them to create business rule sets that serve as risk indicators for the presence of a commercial vehicle. \u00a0idFusion then enables insurers to automatically intervene within the customer or agent&#8217;s application session and gather additional information or documents such as a photograph of the vehicle to validate the customer&#8217;s claim. Indeed,\u00a0idFusion delivers the alerts, workflow and tools that enable insurers to identify, address, intervene and ultimately prevent these events from occurring.<\/p>\n<p>The good news is that the Commercial Vehicles Misclassification Problem has a solution that\u00a0<b>idFusion can deliver for insurers<\/b>. The bad news is that if they don&#8217;t choose to implement then it&#8217;s the honest policy holders that foot the bill. We think that&#8217;s wrong &#8211; which why we founded VeracityID.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>It turns out that quite a few owners of commercial vehicles dishonestly insure them as personal vehicles. \u00a0Indeed in our personal automotive [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[],"class_list":["post-1320","post","type-post","status-publish","format-standard","hentry","category-blog"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How to solve the Commercial Vehicle Classification as Personal Vehicle Problem - VeracityID<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/test.veracityid.com\/new\/how-to-solve-the-commercial-vehicle-classification-as-personal-vehicle-problem\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to solve the Commercial Vehicle Classification as Personal Vehicle Problem - 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