Do Other Insurance Companies Know About Claims?
Understand if your insurance claim history is shared among companies and how this impacts your coverage and premiums.
When considering insurance, many people wonder if information about their past claims is shared among different companies. The insurance industry does operate with a degree of shared information, primarily to assess potential risks and prevent fraudulent activities. This sharing is not a direct conversation between individual companies, but rather occurs through specialized, centralized systems and databases designed to compile claims histories. Understanding these mechanisms helps clarify why and how insurers access this data.
Mechanisms for Sharing Information
Insurance companies rely on industry-wide databases to exchange claim information, which helps them make informed decisions. One prominent example is the Comprehensive Loss Underwriting Exchange (CLUE) report, generated by LexisNexis, a consumer reporting agency. This system collects data on personal auto and property claims. Insurers subscribe to these services and contribute their claims data, allowing them to access reports when evaluating new applications or considering policy renewals.
Another significant platform is ISO ClaimSearch, developed by Insurance Services Office (ISO), a subsidiary of Verisk Analytics. This database aggregates billions of claims across various lines, including auto, property, and casualty. These centralized systems facilitate the systematic exchange of information, serving as repositories of claims data for participating insurers. The primary reasons for this information flow are to accurately assess risk during the underwriting process and to detect patterns that might indicate fraudulent claims.
Types of Information Shared
The information shared through these industry databases is specific to past insurance claims. A CLUE report includes the policyholder’s name, date of birth, policy number, date of loss, claim type (such as auto accident or home damage), claim status (open or resolved), and amount paid, if applicable. It also contains a description of the covered property for home claims or vehicle information for auto claims. This data covers a history of up to seven years.
Similarly, ISO ClaimSearch reports detail the insured party, the involved insurance company, the location, date, and description of the loss or accident, claimed injuries, and the claim’s status. These reports focus on claims history and policy details, not broader personal information like credit or criminal records. For medical claims, access to personal health information is restricted and requires specific policyholder authorization, ensuring only relevant details are shared for claim assessment.
Implications for Policyholders
The shared claims information significantly influences various aspects of a policyholder’s insurance experience. When applying for new coverage or renewing an existing policy, insurers will often request a CLUE report or access other claims databases to review the applicant’s history. This past claims data is a significant factor in how insurers assess the likelihood of future claims, which directly impacts premium calculations. A history of frequent or high-cost claims can signal a higher risk profile to insurers, potentially leading to increased premiums.
Even claims for minor damages or those where the policyholder was not at fault can be recorded and considered, though their impact may vary. A history of multiple claims, especially within a short timeframe, can affect eligibility for new policies or result in coverage denial. Policyholders who maintain a claims-free record often receive discounts, and filing a claim may result in losing these benefits. Consumers can request a free copy of their CLUE report annually from LexisNexis to review their claims history and identify inaccuracies.