Do Insurance Companies Share Information About Claims?

The insurance industry relies on data to assess risks and manage policies. Information sharing is a common practice among insurers, enabling them to understand a policyholder’s history. This exchange of data helps shape insurance coverage and pricing for individuals, supporting the industry’s operational framework.

Information Shared Among Insurers

Insurance companies routinely share claims information to inform their underwriting and risk assessment processes. This shared data includes details about past claims, such as the date of loss, incident type, amount paid for property damage or bodily injury, and whether a claim resulted in a payout. It also includes policyholder details directly related to the claim.

This information is exchanged through specialized databases and consumer reporting agencies. The Comprehensive Loss Underwriting Exchange (CLUE), maintained by LexisNexis, is a prominent example. Another similar system is the A-PLUS (Automated Property Loss Underwriting System) report. These systems compile a seven-year history of claims associated with individuals and properties, providing insurers with a standardized view of past incidents.

Reasons for Sharing Claims Data

Insurance companies share claims information primarily to prevent fraud and ensure accurate risk assessment. Sharing data helps identify and deter fraudulent activities, such as individuals attempting to file duplicate claims for the same incident with different carriers. This approach helps protect the insurance system by flagging suspicious patterns.

Data sharing also facilitates precise risk assessment during underwriting. By accessing a policyholder’s claims history, insurers evaluate a potential policyholder’s risk profile based on their past claim behavior. This allows them to make informed decisions about offering coverage and setting appropriate premiums. The shared data helps maintain consistent and reliable information across the industry.

Impact on Policyholders and Premiums

The sharing of claims information directly influences policyholders, impacting future insurance premiums, eligibility for new policies, and renewals. An individual’s claims history, once shared, becomes a significant factor in how insurers perceive their risk. Past claims can lead to higher rates, as they may indicate increased future risk.

A substantial or frequent claims history could result in the denial of coverage when applying for a new policy or during renewal. The type of claim also plays a role. While at-fault claims, where the policyholder is responsible for an incident, typically have a more significant negative effect on premiums and eligibility, not-at-fault claims can still influence rates. For instance, multiple not-at-fault claims may signal an increased risk. Insurers use this claims data to tailor their offerings, aligning coverage costs with the perceived risk of each policyholder.

Accessing Your Claims History

Policyholders have the right to access their personal claims history report. Individuals can request their CLUE report from LexisNexis, the consumer reporting agency that maintains this database. This report details any claims filed against a property or by an individual over the past seven years.

Reviewing these reports for accuracy is important, as errors could affect insurance rates or eligibility. If inaccuracies are found, individuals can dispute the information directly with LexisNexis. The Fair Credit Reporting Act (FCRA) grants consumers the right to dispute incorrect information, requiring the agency to investigate and correct verified errors within a reasonable timeframe.