Deductibles lower your auto insurance premiums by letting drivers share some of the risk with insurers. For example, a $500 deductible means that if your car is damaged, you’ll pay the first $500 in repairs while the insurer will pick up the rest — up to the limits on your coverage. The higher the deductible, the lower your premium.

Increased frequency of lifestyle changes, troubled economy add to the challenge of obtaining accurate policyholder information.

According to the latest report from Verisk’s Quality Planning, rating error reduced premium revenue for private passenger automobiles by $15.4 billion in 2010, 9.4 percent of the total $164 billion in written premium.

In 2010, rating error reduced private passenger auto insurance industry premium revenue by $15.4 billion. The reduced revenue was essentially a multi-billion-dollar industry donation handed directly to policyholders — although no charitable tax deduction accompanied the effort.

In this report, Quality Planning has aggregated and summarized audit results of roughly 5 million policies from multiple carriers. The data includes substandard to preferred books of business, all distribution channels, and national and regional carriers. State-level data is then weighted to reflect the total national private passenger auto line.

Many auto insurers offer substantial farm-use discounts of up to 20 percent to people using their vehicles exclusively on a farm. But are all vehicles declared as farm use really used for farming?

Quality Planning reveals many consumers adjusted their insurance policies over the past few years. Dropping optional coverages and reducing the payout in the event of a claim enabled consumers to save money — but at significant financial risk.