Auto Insurers Found to be Undercharging by $15 Billion

A recent report put out by Quality Planning revealed that auto insurers have been undercharging their policyholders to the tune of about $15 billion. And the reason has little to do with internal accounting practices or goofball moves, and everything to do with customers who have been falsely reporting information about driving habits. While this bit of news may give some cause to rejoice, it may just mean that insurance companies will begin to put a lot more verification into effect when it comes time to finalize car insurance online quotes.

Some of the chief reasons for the massive undercharging of rates included:

• Low balled yearly mileage estimates provided by insured customers.

• Misrepresented usage—for example, many consumers claimed their vehicles were rarely used when in reality they were used for business purposes.

• Unreported drivers not included on insurance policies using insured vehicles regularly.

Experts believe this discovery will lead insurance providers to become more stringent in their requirements of proof for certain behavioral and usage discounts. As a result, those very same experts continue to underline the importance of customers comparing auto insurance quotes on a yearly basis to ensure their rates haven’t been increased unfairly or out of alignment with other providers. Car insurance online quotes are not binding, but are an excellent way of consumers getting ballpark figures to inform their coverage decisions.