If you’ve ever applied for car insurance, you know there is a boundless list of questions – many of them that might seem unrelated to your coverage. However, car insurance agencies have their reasons for asking them. Insurers use a lot of data, including your claims history, to determine coverage eligibility and more. They also have ways of verifying the truth in your answers since it might be easy to forget or omit important details when applying for coverage. Continue reading to find out more about how car insurance companies stay in the know. (We’ll give you a hint: Get a C.L.U.E.)
What is the C.L.U.E. Report?
CLUE is an acronym for Claims Loss Underwriting Exchange. It is a report generated by a database managed by a consumer reporting agency called LexisNexis®.
In the same way that financial institutions report your credit and debt repayment practices to the same major credit bureaus, insurance companies report your claims history to LexisNexis®. In fact, they tend to report all claims activity, including files that were set up for potential claims, as well as claims that were denied payment from the insured. It does not matter if you received a ticket for the accident or not – claims for the accident will still appear in your report.
Insurance companies understand the relationship between past claims history and the increased risk of future claims. Because of this, many of them pull CLUE reports on drivers when they first apply for coverage.
CLUE Reports allow them to view claims information from competitors and use that data along with driving record and credit report information to determine eligibility for coverage, as well as how much the driver will pay in premiums.
CLUE is the reason it is virtually impossible to file a claim with one insurance company and then switch to another company to avoid a rate increase. After pulling the initial report, insurers tend to maintain their own records about driver behavior and claims activity.
How Your C.L.U.E. Report Affects Your Coverage
Each insurance company uses the data in a CLUE report differently. Some may deny coverage altogether if you have had too many claims in the past few years. Others may take a closer look at the claims within the report and evaluate your risk based on factors such as:
- The amount of the claim
- Whether there were payments for physical damages or bodily injuries
- How long ago the claim occurred
Is Your C.L.U.E. Report Accurate?
If you’ve never looked at your CLUE report, the Fair Credit Reporting Act entitles you to a free copy. Reviewing your report could bring inaccuracies to your attention that could otherwise contribute to higher rates. You can request your free CLUE report online or by calling 866-312-8076. There, you can add a personal statement to your report and examine it for errors. If you do find mistakes, contact the LexisNexis Consumer Center at 888-497-0011 to begin a review, and then contact the insurance company that made the error.
It is worth mentioning that there is also a competing, but less widely used consumer claims report called A-PLUS from Verisk. You can request a copy of that report online or by calling 800-627-3487.
