Big brother comes to auto insurance. So, to speak. Digital Recognition Network (DRN) has released information from data it has gathered and said — in a roundabout way — auto carriers are monitoring 75% of U.S. cars.
Those vehicles have been tagged and tracked by more than 2,000 surveillance vehicles.
These vehicles circle streets and highways 24/7 taking photographs and using license plate recognition technology to find out what drivers are doing. It is access to these photos that allow insurers to fight fraud.
Supporters of the idea contend it eventually saves insurers claims money and keeps rates down.
DRN’s VP and general manager Alex Young said 200 insurers are purchasing the six-billion data points his firm has gathered so far. “These cars are operating 7-by-24, so they’re operating constantly. And all they’re doing is they’re scooping up these license plates, so you get a picture of the vehicle, a date and time stamp, and the location. And from that you can deduce any number of frauds,” Young said.
And what kind of information is DRN finding?
“From the data, we can detect things like rate evasion based on garaging fraud. What a number of people do is they’ll say they live in southern Connecticut when they really live in Brooklyn. And the difference in the rate will be something like $1,000 for Connecticut and more like $4,000 for Brooklyn. From our data, we can see where the car is parked, and where it’s parked at night. We have a pretty good idea that it’s not parked at your stated residency address,” Young said.
Other things being found:
• Tradespeople paying personal auto rates when they’re using vans for commercial purposes
• The use of commercial vehicles to operate outside the radius class of the policy
• Pre-existing damage claims and the review of old surveillance date with new data
• Stolen vehicles located
DRN doesn’t actually own the spotter vehicles. They’re vehicles repossessed by companies who purchase cameras and software from DRN and then use the vehicles for surveillance. DRN then buys the data back from the repo companies.
At that point, insurers purchase the data. “When we look at the number of vehicles we have in our database versus the number of registrations, we find that we have 75% of the registered vehicles in our database,” Young added.
And he contends this is not just a good thing for insurers, it is good for consumers because rates are kept down because of the ability of insurers to detect fraud.
“This is all about fraud detection, so they [insurers] love the fact that they can get this kind of information to help them out both on the claims side as well as the underwriting side. The industry is plagued by fraud … so they’re constantly looking for ways of identifying fraud. Because, at the end of the day, it’s not just about them losing money, it means that every time someone makes a fraudulent claim, it affects the premiums as a whole,” Young said.
Source link: Insurance Business America