Vehicle insurance companies use consumer reporting agencies to report a new claim, settlement and denial. And other companies contributing to this database can see and read the details of accidents, incidents, communications and decisions about it. Also, companies can read police reports about accidents, access Motor Vehicle Reports from DMVs and check credit scores. Carriers use all these details when considering and pricing an auto insurance quote or coverage request.
The Comprehensive Loss Underwriting Exchange (CLUE) is an accident and claim information report generated by LexisNexis. They keep claim details for both drivers and vehicles. Insurers contribute to it and use it themselves to price risks.
Nearly all vehicle insurance companies are part of the CLUE reporting system which makes sure everyone has access to the same accurate and complete information so that they provide accurate quotes and don’t lose money on bad information.
Usually, the records are kept up to 5 – 7 years depending on state rules but most automobile insurers only look at and consider the last 3 years.
So, this is their way of sharing information among themselves. They don’t need to contact each other but check the CLUE reports to find out if there is any adverse record about the car or listed drivers. Normally, there won’t be a record to act on, if a car or driver isn’t involved in an accident or a policyholder didn’t make any claim. Other companies won’t be able to see the quotes, renewal notices or non-renewals as they are not part of reports.
Motorists may not be aware of such reports until they face higher premiums or car insurance non-renewal and receive “adverse action” notice which explains why the insurer took such an action, details of the claim or accident and agency provided the information and their contact details.
In such cases, motorists can contact this agency mentioned in the adverse action report and ask for a free report. Then, they may be able to correct misleading information or enter their own input, which will be recorded and seen by companies checking it in the future.
Usually, these reports are very detailed and contain the name of the policyholder, policy number, date of the incident, amount of loss, nearly all communications about a claim including responses from the policyholders and any repairs carried out on vehicles. Normally, a vehicle owner would be able to get the CLUE report free of charge.
For example, a vehicle may cause an increase in insurance premiums because it has been involved in an accident or suffered flood damage in the past and was totaled so it has a rebuilt title. Companies like Carfax would be able to find out about these problems. So, it usually makes sense to order a report before you buy a used car.
Car insurance companies gather information through reporting agencies and look at every bit of information available to them about the drivers, vehicles and zip codes and use them when they are pricing risks. Not only is past claim data influential but also details of it are important too. For example, a weather-related damage claim isn’t the same as an at fault collision claim.
All these finer details are all considered and taken into account by companies. Motorists are required to answer many questions relating to their past driving and claim histories, credit scores, vehicles and many other details while getting auto insurance quotes. They are required to answer questions to the best of their knowledge.
They should know that insurers can and will check and verify these details and find out most things through other sources. So, hiding anything can come back and hurt them, especially when they have a claim. The best ways of saving money on car insurance is finding out about discounts and shopping around for the best prices.