For decades, vehicle-centric attributes have taken a backseat to person-centric attributes in the underwriting process. Carriers tend to spend far more time and money gathering information on drivers than they do vehicles…and that’s understandable. Until recently, who is driving mattered significantly more than what they were driving.

But that’s beginning to change. As advanced driver assistance systems (ADAS) become more prevalent, carriers are becoming more interested in the policy pricing implications related to vehicles that can prevent or significantly mitigate major accidents. In addition, we believe there’s a goldmine of actionable data in the vehicle history reports that are available today.

Vehicle history can tell an important story

Vehicle history provides a chronological accounting of the events in a vehicle’s lifetime, including information such as:

  • The number of owners it’s had, and the duration of each ownership
  • Details about accidents it’s been involved in
  • Whether it was ever part of a rental fleet
  • Whether it was ever salvaged due to an accident, flood or fire

All of these elements can be predictive of future loss. This means carriers can’t afford to ignore this information. Not only that, many specific vehicle history events provide multiple valuable data points. For example, it may be predictive that a vehicle routinely fails emissions tests and with emissions tests come odometer readings, which can provide additional insights about annual mileage.

Vehicle history data provides value in many ways

There are carriers in the market today who are using vehicle history data to calculate risk scores and apply discounts and surcharges accordingly. However, there are other workflow benefits beyond modeling, including when it comes to working across departments. Take branded titles. If a vehicle is underwritten without recognizing it has a salvage title and is involved in an accident, the claims department is left to explain to an unhappy customer that their vehicle is only worth a fraction of what they thought it was worth.

Mileage is another revealing attribute and an important part of creating a complete view of vehicle’s history. The best mileage data the market has had access to may have been an odometer reading from an oil change seven months ago, and the other reading from an emissions test six months prior to that, and both were hand-keyed and prone to error. Therefore, what’s been available to the market has just been “good enough,” but we’re excited to move to a world where these readings are more prevalent and verified from the connected vehicles themselves.

Connected car data is taking vehicle history to the next level by providing real-time information leading to more accurate risk assessment and pricing. For example, with odometer readings coming directly the from connected car, you can combine yesterday’s mileage and the mileage from two weeks ago and the mileage from two weeks before that to quickly build a mileage curve to more precisely represent the habits of the consumer or vehicle you’re underwriting. With the increase in connected car adoption, mileage data will continue to be more accurate, recent and available. The time is now to begin ingesting and learning from available mileage data to build pricing curves and start taking advantage of the addition of new OEMs, solution improvements, and increased mileage fill rates.

Accident information is very telling too. Our internal studies tell us that vehicles that have been involved in an accident are approximately 10% more likely to be involved in another accident. As the number of accidents a vehicle experiences climbs, so too does the likelihood of future loss. In fact, future claim frequency for vehicles that have been in four or more accidents is 23% higher than for vehicles that haven’t experienced an accident.

While we know ADAS are contributing to a substantial overall decrease in collisions, there is a downside too. There’s a scarcity of experienced technicians who can recalibrate some of these sophisticated systems following an incident. This could compromise their ability to perform correctly in the future. Discounts awarded solely on the inclusion of such a feature without factoring in the vehicle’s history can end up being costly to a carrier in more ways than one.

The number of owners a vehicle has had is also predictive of risk. Our internal analysis shows that vehicles that have had four or more owners have a 30% higher accident frequency than their less frequently bought and sold counterparts. Approximately 10% of the vehicles on the road meet that description.

We’ve also found that vehicles sold at auction correlate with higher future claim frequency than those that aren’t. We estimate that one auction event warrants about a 7% indicated surcharge, while two auction events expand that number to 10%.

Make vehicle history a strategic underwriting element

The varying use cases point to the predictive power of the attributes mentioned above and how, coupled with the workflow advantages these data insights bring, vehicle history is a critical tool for accurate underwriting and pricing. To learn more about how you can develop a three-part strategy combining vehicle build, vehicle history, and connected car data to give you a more complete picture of risk, contact your account manager, call 800.458.9197 or email