According to QP, an individual driving 20,000 miles a year but reporting only 5,000 will, on average, have higher claim costs than drivers who honestly report driving 20,000 miles.

In addition to false report ratings causing honest policyholders to subsidize dishonest driver premiums, QP said that it puts honest agents at a competitive disadvantage against crooked ones who will inaccurately rate a policy "to obtain a cheaper quote and cause a sale."

The report said that in addition to many Web sites that provide information on how to commit rating fraud, insurers ratings can be impacted by marriages and divorces, new vehicle registration, drunk driving arrests, traffic fatalities, new drivers, and customers who move or change jobs.

"The risk profile of auto policies is constantly changing, making personal auto insurance risk management a rapidly moving target," the report said.

It reported that 52 percent of household auto policies experience a change of vehicles or drivers every year.

Policyholders, according to QP's analysis, are more than five times more likely to report midterm mileage changes that lower annual premium than to report mileage changes that raise premium.

Premium leakage in 2008 was 0.18 percent less than the year before probably because gas prices meant people drove less and loss of jobs meant they commuted fewer miles, the report noted.

QP advised that to reduce leakage, insurers should get the rating right at point of sale by verifying 16 different points of data, make checks when renewing, and they should develop a long-term plan to avoid lapses.

The report concluded that insurers are increasingly "losing contact with their policyholders. Internet-based communication and mass-mailing techniques have replaced the direct contact that builds healthy customer relationships. From high turnover rates to adversarial relationships, there are hidden costs to this ever-increasing depersonalization."

It warned, "In addition, the Internet itself is introducing policyholders to clever ways to commit fraud against carriers. Without detailed analytics and audits, this type of insurance leakage is virtually undetectable."

Quality Planning is part of Jersey City, N.J. -based Verisk Analytics company.