Insurance Companies have always used annual mileage for determining car insurance premiums.  For many years, the amount was determine by the policyholder with guidance from the agent, and insurance companies complained that the mileage for their policyholders was less than how much people were driving.  They developed several ways of verifying mileage by requesting the policyholder’s work address in order to determine commute mileage.  Other verification methods included asking for service receipts and some even requested pictures of odometers!  The goal was to make sure the policyholder rates reflected the mileage driven.

The game has changed.  Artificial Intelligence is finding its way into everything these days and insurance is certainly jumping on that bandwagon.  Many insurance companies now use mileage verification vendors such as Carfax to help them zero in on the amount of miles that you drive.

What this means to you?  If your premium was based on lower miles than you actually drive, you are likely to see an increase in your premium.  If however, you drive less than what your policy shows, you could expect to see a decrease!  We find that it takes awhile for the adjustments but they do come through eventually.

The good and the bad – while it could be a short term increase in many policyholder rates, over time accurate underwriting for everyone should bring premiums to where they should be based on exposure.  Artificial intelligence is not going away, so be prepared to answer questions from your insurance company that you may have never heard in the past! 

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