SAN FRANCISCO, Calif. -- A new report concludes that premium-rating errors lowered the overall profits of auto insurance companies by $15.2 billion in 2003 due to inaccuracies in rating information. The research, conducted by Quality Planning Corporation (QPC), states that the $15.2 billion error represents about 9.7 percent of auto insurers’ revenues. It is not clear, though, how much of that loss is passed on to the consumer. QPC's Premium Rating Error reveals that not surprisingly, it is the rating factors over which insurance companies have little control that contribute the most to rating error: unrated drivers (1.6%) and commute/annual mileage (1.9%). Policies with unrated (that is, unknown to the insurance company) 16-year-old male drivers in the household exhibit total claim losses more than twice the national average. A similar problem exists with annual mileage -- the miles drivers state they will drive when they apply for coverage. Many carriers, aware of the high error in these mileage data, rate in only two categories such as zero to 7,500 miles, and over 7,500 miles. QPC's analysis of the loss-histories of vehicles driven more than 30,000 miles found loss frequencies that were 31 per cent higher than those vehicles driven 16,000 to 20,000 miles. Failure to identify these higher risk vehicles and rate them accordingly represents a major source of unmanaged loss costs, according to the report.