The Ultimate Guide to Vehicle Data

How Vehicle Data is Shaping the Future of Auto Insurance

Chapter I



Smarter, safer, better vehicles should be less risky to operate and, when built with repair and resilience in mind, may also be cheaper and easier to fix when accidents do happen. The technologies car makers introduce to make vehicles “smarter, safer, better” may be optional equipment and can cause variations in initial value of the new vehicle and retained value as that vehicle hits used car years which in turn has lingering effects on insurance. Auto insurance companies are increasingly using vehicle data to improve their risk assessment and pricing models for vehicles, drivers, driving conditions, operator behavior, and surrounding traffic. The vehicle data we will discuss in this guide includes connected car data, driver data, and data as it relates to features on a vehicle. This data can be collected from a variety of sources, including in-car sensors, GPS data, and even social media. By analyzing this data, insurers can better understand how drivers behave and how likely they are to get into accidents. This information can then be used to offer more personalized insurance rates and to provide drivers with more accurate information about their risk.

There are several ways that vehicle data can be used to make auto insurance companies more competitive. For example, insurers can use this data to:

Chapter II

Becoming "Car Literate"

Continuous learning in a constantly changing and dynamic mobility ecosystem is needed now more than ever. Auto insurers who are "car literate" keep up with the latest trends in the auto insurance industry. They have a deep understanding of how specific aspects of a vehicle influence the auto insurance industry and the needs of customers. They are able to provide their customers with the information and resources needed to make informed decisions about their specific auto insurance coverage needs, while maintaining an edge over their competition. Auto insurers who are car literate don’t “guess” using a broad knowledge of vehicle information, they pre-fill knowable information from VIN-detailed data for all links in the insurance value chain over the life of the vehicle. Using the right vehicle data is key to this identity.

5 Key Ways Vehicle Data Elevates Your Car Literacy

Armed with vehicle data, a car literate auto insurer will be enabled to:

  • Expertly explain the different types of auto insurance coverage and how they work for a specific vehicle and customer.
  • Help their customers choose the right level of coverage for their specific needs.
  • Provide customers with more accurate, personalized discounts and other ways to save money on their auto insurance policies.
Chapter III

Getting Started with Vehicle Data

What is the right data? Where is the right data? What kinds of data should I be looking at? How do I use this data? These are all common questions facing auto insurers.

Perhaps the most important step in gaining a leg up on your competitors is learning how to leverage vehicle data once you have it. This begins by identifying the right data. The right vehicle data starts with VIN-specific data which includes both the old school “squish-VIN” decoder data items like make, model, trim, and drive train, and more advanced intelligence like the full 17-digit machine fingerprint that illustrates and documents precisely every important feature factory-installed on a vehicle. This latter opportunity often needs to be combined with an ‘auto feature key’ to detangle the complexity and combined marketing dialogues used across OEMs. On top of that, we layer in Vehicle Data in the Cloud which brings in insights into how well a given driver is driving, where they are driving, when they are driving, how much they are driving, etc.

Now that you know what data you need, how do you find it? The proper vehicle data can be found through the following methods:

  • Gain access to VIN-specific data gathered from the OEM and made available for analysis with a trusted third-party normalization effort (making internal teams become data librarians is uncommon).
  • Partner with other companies. There are several companies that collect and analyze vehicle data. By partnering with these companies, you gain access to valuable insights that you can use to improve your business.
  • Explore Vehicle Cloud Data sources.

Once ascertained, the vehicle data can be used in a myriad of ways. These are a few key steps that auto insurers can take to leverage vehicle data:

By taking these steps, auto insurers can leverage vehicle data to improve their businesses and provide better service to their customers. (An important note, however, is that there are ethical and legal implications for using vehicle data. It is important to be aware of these concerns before you start collecting and using data.)
Chapter IV

The Power of Pricing with Data

When it comes to pricing, ultimately there are two options: pricing with data and pricing without. We’re sure you can guess which option works better.

Auto insurance pricing is based on several factors, including the driver's age, gender, driving record, and the vehicle being insured. Vehicle data can be used to improve the accuracy of the latter two factors, which can lead to lower premiums for drivers who are at a lower risk. For example, vehicle data can be used to calculate a driver's risk score. This score considers multiple elements, such as how often the driver uses their car, how far they drive each day, and their driving habits. Drivers with a lower risk score will be charged lower premiums.

You can lose more money than ever by being wrong about the vehicle insurance to value gap – both by missing the opportunity to personalize a risk assessment and/or by not knowing the value of the vehicle you would need to replace.

It's worth noting that vehicle data can also be used to detect fraud. For example, if a driver claims to have been involved in an accident that never happened, vehicle data can be used to prove that the accident did not happen. This can help to prevent insurance fraud and keep premiums low for all drivers.

Overall, vehicle data can be a valuable tool for auto insurers. It can be used to improve the accuracy of risk assessments, avoid costly policy mispricing, detect fraud, and provide lower premiums for drivers, making your auto insurance solution the most attractive option on the market.
Chapter V

Vehicle Data and Claims: Better Data at the Moment of Truth

The results of auto insurance claims without using vehicle data can be inaccurate and costly. Without access to vehicle data, insurers are unable to accurately assess the risk of a claim and may be more likely to deny or underpay claims. This can lead to frustration for drivers and can also damage the reputation of the insurance company.

In addition, the lack of vehicle data can make it difficult to detect fraud. Without being able to track driving habits and patterns, insurers may be more likely to be taken advantage of by fraudulent claims. This can also lead to higher premiums for all drivers.

The use of vehicle data is essential for accurate and efficient auto insurance claims. By collecting and analyzing vehicle data, insurers can improve their risk assessment, detect fraud, and provide a better experience for their customers.

Chapter VI

The Final Result: From Factory to Scrapyard and Everything in Between

10 Reasons Why Insurance Carriers (as well as Auction Houses and Repair Networks) Need Vehicle Data

Download the 10 Reasons

Insurance carriers that integrate this data into their pricing, servicing, and claims processes are better positioned for profitable growth and better equipped to service their customers.

If you take one thing away from our Ultimate Guide to Vehicle Data for Auto Insurers, it should be this: Vehicle data is a critical tool for scoring more wins in the competitive auto insurance landscape. While a few years ago vehicle data might have been a “nice-to-have,” in the immediate and future automotive insurance industry, it has become a “must-have.” It’s time to get started. 



Marty Ellingsworth

Executive Managing Director, Insurance Intelligence

Ron Lawson

Ron Lawson

Vice President, Business Strategy, Valuation Services

Let's talk vehicle data.

With decades of experience in both insurance research and analytics and vehicle data and insights, our teams look forward to discussing the latest in vehicle data for insurers with you.

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