Data-sharing by VIN protects repair facilities, insurers and owners

(Reproduced from story I wrote for Collision Management Magazine January 2011 Issue)

The vehicle identification number, or VIN, used on all cars and trucks today became a standardized 17-digit number in 1981.  The numbers and letters are codes for such things as the make and model, model year, and a final six-digit sequence that identifies the specific vehicle.  It’s the vehicle’s “fingerprint,” and when used on repairs and shared between collision facilities, insurance companies, police and the public, it can provide a level of protection for all of them.

Improving the accuracy

Insurance companies recorded VINs on their policies early on, but not with much accuracy or consistency, especially since VIN decoding and verification software wasn’t readily available twenty years ago.  But in the mid-1990’s, the insurance industry and Ontario’s Ministry of Transportation began work on the Uninsured Vehicles (UV) Project to verify that vehicles carried mandatory insurance.  Starting last fall, the project was phased in to alert vehicle owners of potential VIN issues prior to their license plate renewals.  It is expected to expand in future, allowing police to access the insurance database to verify insurance coverage at roadside.

What the UV project initially found was that many companies were entering VINs incorrectly, with some well below 50 percent accuracy.  This was usually due to it being manually entered, where characters could be missed or mixed up.  The UV initiative accelerated the process of insurers cleaning up their VINs, with a goal of better than 99 per cent accuracy.

CLEAR thinking

The timing coincided with other industry initiatives, including insurers moving to a new, experience-based vehicle rating system called Canadian Loss Experience Automobile Rating, or CLEAR.  Using historical insurance data by vehicle model, CLEAR bases each  model’s expected costs on such factors as theft rates, repair costs and frequency of injuries.  In conjunction with CLEAR, new products were being developed, including decoding software that would ensure VIN accuracy and let insurers know they were properly rating the vehicle.

An accurate VIN lets the industry better verify other information, such as if the vehicle had been previously branded as irreparable, salvage, rebuilt or stolen.

Data Sharing has enormous potential

Data sharing through the VIN has enormous potential for the industry.  Collision facility owners can access information that would identify areas of previous damage, which can potentially protect shops – and the car’s owner – when it comes to the vehicle’s structural integrity.  Claims fraud can potentially decrease as insurers are able to trace the vehicle’s history, and vehicle buyers can follow a car’s travels through any insurance claims or collision repairs, as well as check the accuracy of its odometer reading and any service records.

Vehicle history reports are now available to car buyers, and collision repair facilities maintaining accurate VIN records of their repairs will help make this information part of the package.  This may even help drive consumers to facilities prominently displayed on the report to ensure they maintain their vehicle’s value following a collision.  There’s a lot of value in those 17 digits at every step of a vehicle’s life.