Auto insurance companies now have a tool that lets them verify the garaging address of a vehicle, confirm the driver’s commuting mileage and obtain loss costs and premium differentials for the vehicle, all before binding the policy.

GarageConfirm, a new product from Verisk Insurance Solutions, taps into a vehicle location database of four billion license plate scans built by a company called Digital Recognition Network (DRN). This database was previously only available to law enforcement and auto lenders.

GarageConfirm measures the time, frequency and proximity of vehicle sightings relative to a given address. Insurers can use the data at point-of-sale or renewal—before binding—to help not only confirm the validity of garaging addresses and commute mileage provided by policyholders but also spot red flags that need further investigation or recover lost premium, according to Verisk.

The tool helps prevent garaging fraud, also known as “phantom garaging,” which Verisk said occurs when consumers register and insure a car in one place but keep and primarily operate it in another (typically in a location where insurance rates are higher) as a tactic to lower premiums. Verisk said insurers lose an estimated $2 billion in auto premium annually to garaging fraud.

“Rate evasion plagues the insurance industry, amounting to billions of lost dollars for insurance providers and higher insurance costs for the public,” said John Cantwell, vice president of auto underwriting at Verisk Insurance Solutions. “Garaging fraud often goes undetected, and until now, it hasn’t been easy to identify.”

Alex Young, vice president of risk solutions at DRN, said its database is the largest vehicle location database and covers every major metropolitan area. “While GarageConfirm is well-suited for high-cost, high-rate-evasion areas such as New York, many cases of fraud occur in low-cost or even rural settings where the customer claims to garage the vehicle,” Young said.

GarageConfirm is one in a suite of fraud prevention technologies offered by Verisk.

Verisk’s RISK:check Point of Sale screening technology provides data that insurers use to identify risks with a high likelihood of future claims fraud, find rating errors that could result in lost premium, and calculate loss ratio and other performance metrics.

MileageConfirm is a system to help insurers identify potentially inaccurate or fraudulent mileage information, while OdometerConfirm gives insurers access to actual odometer readings using a policyholder’s smartphone.