What Is Insurance Loss Reported and Why Does It Matter?
Unpack 'insurance loss reported': what it means, its impact on your rates and coverage, and how to view your own claims history.
“Insurance loss reported” refers to the formal notification provided to an insurance company regarding an incident that may be covered under an existing policy. This notification initiates the claims process, allowing the insurer to evaluate the event. Even if an incident does not result in a payout, the act of reporting it establishes a record that contributes to a policyholder’s history. The process of reporting a loss is a fundamental aspect of an insurance contract, obligating policyholders to inform their provider of covered events.
Reported Details
An insurance loss report typically contains specific information detailing the reported incident. This includes the date the loss occurred, the type of loss (such as property damage, auto accident, or theft), and a description of the incident. The report also notes the amount of the claim, if any, and whether the claim was paid, denied, or is still open. Details about the policyholder and the property or vehicle involved are also included.
Even inquiries or incidents that do not lead to a claim payout might be recorded in these reports. For example, if a policyholder contacts their insurer to ask about potential coverage for damage but does not formally file a claim, this inquiry could still be noted.
Reporting Mechanisms
Insurance companies utilize shared databases to report and exchange loss information across the industry. The Comprehensive Loss Underwriting Exchange, commonly known as CLUE, is a primary example of such a system. LexisNexis, a consumer reporting agency, generates and maintains CLUE reports. Insurers regularly submit claims data to these centralized repositories.
When an insurance company receives an application for a new policy or processes a claim, it can access this information to review a policyholder’s claims history. This industry-wide data sharing helps insurers gain a comprehensive view of past incidents, regardless of the previous insurance provider. CLUE reports typically contain up to seven years of personal auto and property claims history.
Application of Loss Information
Insurance companies use reported loss information to inform their business operations. This data is important for underwriting new policies, allowing insurers to accurately assess the risk associated with a potential policyholder. A history of reported losses directly influences an insurer’s decision to offer coverage and the terms of that coverage.
This information also plays a role in setting premiums. Insurers evaluate past claim frequency and severity to determine appropriate rates, as a higher number of past claims can signal increased risk and lead to higher premiums. The data also assists in processing future claims by providing context from previous incidents.
Obtaining Your Loss History
Individuals can obtain a copy of their own insurance loss history report, specifically the CLUE report, which is managed by LexisNexis. Under the Fair Credit Reporting Act (FCRA), consumers are entitled to one free copy of their CLUE report every 12 months. This report can be requested directly from LexisNexis, either online, by phone, or through mail.
When requesting the report, individuals need to provide personal identifying information to verify their identity. It is important to review the report for accuracy, as errors can negatively impact insurance rates. If inaccuracies are found, consumers have the right under the FCRA to dispute the information with LexisNexis, which will then investigate the claim with the reporting insurer.