You were in an accident and filed a claim with your insurer.
Now, you worry that your rates are going to increase.
One question you may wonder is whether you could swap to a new insurer and skip the hassles of a higher premium.
While it makes sense to jump ship initially, the reality is that you cannot escape a claim once it is filed.
Insurance companies do share data, and the next insurance company will know about your claims history with previous insurers – which will only affect your new company rates.
Meet the CLUE Database – The Tell-All Software for Insurance Companies
How do insurers know your history?
The Comprehensive Loss Underwriting Exchange, also known as CLUE, is a national database used by insurance companies for tracking claims among their policyholders.
LexisNexis powers CLUE, and it covers all history of any automobile loss, inquiries, and disputes on your record. You can request a copy of your CLUE report through LexisNexis to see what past insurance companies have reported – and you should. Often some discrepancies and errors affect premium rates that you may not even be aware of.
How CLUE Reports Work
All major insurers access CLUE. Any insurance company considering you for a policy not only runs a history check of your driving record but also reviews your CLUE data. Consider CLUE the insurance credit bureau (don’t forget insurers often check your credit report too).
Within this vast database, the insurance company will have seven years of records that include:
- Your Personal Information for Verification: To ensure you are you, and they are not accidentally pulling files on the wrong driver, insurers will look at personal information on your application and compare it to the CLUE record. This includes your name, date of birth, full address, and your social security number. It often includes your driver’s license information and vehicle information.
- Claims History and Claims Paid: Any previous claims you have filed, and ones paid for by your insurer, are included in the report.
- Claims Denied by Insurer: You will also have a history of any claims your insurance company denied or did not pay. Therefore, do not assume that if you have a denied claim it will not come back to haunt you later. Instead, insurers see the past seven years of unpaid or denied claims too.
- Any Inquiries: Any inquiries to your insurance agent or a claim’s adjuster are also reported – similar to inquiries on your credit report.
Can an Insurance Company Raise Your Rates from CLUE Data after They Take You On?
Yes, they can.
When you sign up for insurance, all of your data might not have updated. Insurance companies pull a CLUE report, along with other various agency reports, to decide your rates. However, when you sign up, there are clauses in your agreement that allow them to monitor your driving history and possibly your CLUE record continually.
If your insurer pulls your CLUE record and finds a recent claim that you had not indicated in your initial application, they have the right to raise your rates – and possibly dismiss you as a policyholder entirely.
Therefore, if you have claims, disclose them. Never try to hide any claims or assume that if the insurer didn’t see it on the initial pull that they would not see it in the future.
Add a Personal Statement to Explain Bad Records
If you have claims filed in the past, you have the right to add personal statements to your report. When you pull a report through LexisNexis, request that you can add a personal statement. This allows you to explain claims filed in the past, such as why you had a claim for vandalism, or what happened in an accident. Doing so may help future insurers better understand the claim and possibly reduce the chances of a higher insurance rate.
Remember that CLUE is Only Part of the Equation
The CLUE report focuses on past claims and records with insurance companies, but it is by no means the only item used to measure your risk with a new insurance company or even your existing one.
Insurers use multiple factors and reports. A few other reports they will use to help assess your premium include:
- Driving Record: Your driving record has a significant impact on your rates – more than your CLUE. Therefore, you should obtain a free copy of your record from the DMV and make sure it is accurate. Too many citations or accidents will most likely increase your rates.
- Credit Report: Insurers see low credit scores as a high risk for their company; therefore, the lower your credit score, the higher your premium may be – even with a good driving record. Pull a copy of your credit report (which you are entitled to a free one each year) and make sure any errors are taken care of before requesting quotes. Alternatively, you can try and find an insurer that does not check your credit.
While insurance companies do share information, it does not mean they all offer the same rate. Once you know what is on your reports, compare insurance companies and see who can provide you with the coverage you need with the prices you can afford – regardless of what your CLUE report has to say about you.