Do Insurance Companies Share Claims History?
Learn how insurers leverage shared claims data to inform underwriting decisions and policy pricing. Protect your insurance future.
Insurance companies share claims history information to assess risk and determine policy pricing. This data helps insurers understand a policyholder’s past claims, enabling informed decisions about coverage and premiums. This system helps ensure fairness in pricing by aligning premiums with an individual’s or property’s risk profile.
How Claims History Is Shared
Insurance companies primarily share claims history through specialized consumer reporting agencies that maintain extensive databases. The most prominent are LexisNexis, which compiles Comprehensive Loss Underwriting Exchange (CLUE) reports, and Verisk, responsible for A-PLUS reports. These entities act as central repositories where insurers contribute and access claims data.
CLUE reports are widely used for personal auto and property insurance, detailing claims history for up to seven years. When an insurance company receives a claim, even if it’s just an inquiry or a denied claim, that information is typically submitted to these databases. This ensures that when an individual applies for new coverage or renews an existing policy, the prospective insurer can access a comprehensive record of past losses.
A-PLUS reports, generated by Verisk, serve a similar function by providing loss history data for personal and commercial property as well as auto claims. These reports contain information from a vast network of insurers. The data aggregators facilitate the exchange of claims information, ensuring insurers have access to relevant historical data to evaluate potential risks.
Understanding the Information Shared
Claims history reports contain specific details that insurers use to evaluate risk and price policies. These reports typically include the date of loss, the type of loss (such as fire, theft, or weather-related damage), and the amount the insurance company paid out. They also record the policy number, claim status, and information about involved parties and property. Even claims reported but closed without payment or denied can appear.
Insurers analyze this information to understand the frequency and severity of past claims, which helps them predict the likelihood of future claims. For instance, a property with multiple water damage claims might indicate a higher risk for future water-related issues, influencing the premium or coverage decision. A history of auto accidents will appear on an auto CLUE report and can affect future rates.
Your Rights Regarding Claims Data
Consumers have specific rights concerning their claims history data under the Fair Credit Reporting Act (FCRA). This federal law ensures the accuracy, fairness, and privacy of information collected by consumer reporting agencies. The FCRA grants individuals the right to access their reports, review them for accuracy, and dispute any incorrect information.
You can obtain a free copy of your CLUE report from LexisNexis once every 12 months. This can typically be done by contacting LexisNexis directly via their website or phone. You can also request a free copy of your A-PLUS report from Verisk annually. It is advisable to review these reports regularly to ensure all information is accurate and complete.
If you discover any inaccuracies on your claims history report, you have the right to dispute them. Contact the reporting agency, such as LexisNexis or Verisk, and provide details of the error. The agency is then required to investigate the dispute by contacting the insurance company that furnished the information. If the information cannot be verified or is found to be incorrect, it must be removed from your report. You also have the option to add a personal statement to your report to explain any entries.