CLEAR System

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Vehicle Information

Working closely with manufacturers of vehicles for the Canadian market, IBC maintains the most up-to-date comprehensive database of vehicle information for all private passenger vehicles (including cars, and light trucks), motorcycles, all-terrain vehicles and snowmobiles. In addition to vehicle characteristics, the database contains vehicles codes, rate groups and vehicle identification number (VIN) information.

The information contained in the vehicle database is made available to authorized users via datasets and bulletins and, on an individual VIN basis, via a secure web product, VINlink Decoder. Through these products, users can verify the accuracy of a VIN, identify vehicle models at the vehicle code/model year level and correctly assign vehicle codes (a mandated data element in ASP) and rate groups. The VINlink decoder allows for the correction of a VIN interactively. The VIN datasets that support the decoder can be integrated directly into application systems, including insurer, agent and broker management systems. Bulletins advising users of new/changed vehicle codes are published as early as possible, before new vehicles are introduced to the market.

IBC assigns each new vehicle model introduced to the Canadian market a four-digit vehicle code that is used by insurers to report insurance transactions to statistical agencies. These codes are used to identify each model for which the claims experience will be analyzed.

Using these vehicle codes, IBC developed a system of rate groups that fairly matches premiums to the risk associated with each vehicle make and model, known as the Canadian Loss Experience Automobile Rating (CLEAR) system.

By analyzing the past claims experience of all vehicle models insured in Canada, IBC determines the relationship between claims and various vehicle characteristics such as weight-to-horsepower ratio, wheelbase, body style, price, restraint and theft deterrent systems and so on. Through statistical modeling, CLEAR calculates the expected relative claims cost for each model on the road (even new models) based on its characteristics. Each model’s predicted values are then adjusted each year using the most recent claims data available for that particular model.

The Canadian insurance market is quite varied from coast to coast. By working with insurers and insurance regulators from each region of the country, CLEAR has been adapted to meet the specific needs of the different markets.