Fact Sheet 26:
CLUE and You:
How Insurers Size You Up
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Privacy Rights Clearinghouse
Insurance claims you file can appear in a little-known database called the Comprehensive Loss Underwriting Exchange (CLUE) or its smaller competitor Verisk A-PLUS. These databases enable homeowner and automobile insurers to exchange information - without notice to you unless your state requires notice - about claims for loss of property.
LexisNexis, a Georgia company that is one of the country's biggest compilers and sellers of personal consumer data issues your CLUE report. A property loss database is also maintained by Verisk, which calls its database the Automated Property Loss Underwriting System, or A-PLUS. However, because LexisNexis dominates the insurance risk market, reports of property loss have come to be known generically as CLUE reports.
What does a CLUE report say about me?
The CLUE report includes personal information such as your name, date of birth, and Social Security number. Tied to your identifying information is a record of any auto or homeowner property loss claims you have submitted to an insurance company for the past 7 years, including:
- Date of the loss.
- Type of loss claimed.
- Amount paid by the insurance company.
The CLUE database may also include notations of property "damage" - even if the insurance company didn't pay out a cent. Your state may not allow reports to include inquires that did not result in a paid claim. You may contact your state insurance commissioner to find out what applies in your state.
How long does information stay on the CLUE report?
Seven years from the date the loss is reported. This may include losses for a property before you owned it.
Is my credit history included in a CLUE report?
Only information about property loss claims made against homeowner's or automobile policies is included in the CLUE database. Information from the CLUE database plus your risk score make up the complete insurance risk profile. However, your credit history can play an important part in an insurance company's judgment about your risk potential.
Why do insurers use CLUE reports?
CLUE reports are a way for insurers to share information about your record of filing insurance claims. Insurance companies are by nature in the business of assuming risk. The more that a company pays in property claims, the less it profits. CLUE reports are one of the ways an insurer assesses how much of a risk it is assuming by selling you an insurance policy.
What's wrong with CLUE?
Because CLUE is generally unknown to the public, consumers have little opportunity to prepare for an insurance review. Inaccurate or incomplete data included in a report is likely to surface only after you have been turned down for insurance or premiums for new insurance skyrocket. At this point, you, the consumer, assume the burden of proving the data wrong.
Here are some of the problems that lack of knowledge about CLUE reports can create for you:
- Inaccurate information can be included in the report.
- The report may contain information about someone else or another property.
- A report may use information other than claims data to rate you as a risk - even if the company doesn't pay a claim.
- Your phone calls to inquire about a possible claim may be reported.
- The loss may fall below your deductible and the claim is denied or you are advised not to submit a claim. Still, you can end up with a negative mark.
- Even when repairs are made and the property is restored to the original condition, the CLUE report can include information about the claim.
- The report can affect the premium you pay as well as whether you are insured at all.
- Your history as a long-time customer with your prior company is not a factor of the CLUE report.
The federal Gramm-Leach-Bliley Act (GLB) requires financial institutions, including insurance companies, to send you a privacy notice about how they collect information about you and how the company shares your data inside and outside the company's corporate structure.
Since the insurance industry is regulated by the states, the content of an insurer's privacy notice is mandated by your state's insurance commissioner. The National Association of Insurance Commissioners provides contact information for your state's insurance commissioner.
In California, any insurer who issues an insurance policy that covers residential property, which reports claims history or loss experience to a database such as CLUE must provide the insured with a disclosure. CA Insurance Code Section 791.28.
Does the Fair Credit Reporting Act (FCRA) give me any rights?
Yes. When it comes to your CLUE report, you have the same rights as you have for your credit report. You have the right to access your report and to dispute inaccurate or incomplete information. You are also entitled to notice about an adverse decision based on information in the report.
Do any other laws cover CLUE reports?
State laws that supplement the FCRA for consumer reports also apply to CLUE reports. California has such a law, the Investigative Consumer Reporting Agencies Act. (California Civil Code §1786 et seq.)
The California law goes beyond the FCRA in protecting consumers who are the subject of employment reports. However, for insurance customers, the protections only apply if the report is based on personal interviews. This is a shortcoming of the California law. (Civil Code §1786.2(c); Insurance Code §791.02(n)).
A dispute is a formal process outlined in the FCRA. The law requires a consumer reporting agency to investigate your claims of inaccurate information included in a consumer report.
How do I file a dispute?
Here's an example of how the dispute process works:
- You apply for automobile insurance, and the insurance company orders your automobile CLUE report.
- The insurer tells you it will not issue a policy because of claims paid by your current insurer.
- The insurance company that turned you down must give you an "adverse action" notice that includes the name and contact information for the consumer reporting agency that issued the CLUE report.
- The adverse action notice must also tell you about your right to get a free copy of the CLUE report as well as your right to dispute inaccurate or incomplete information in the report.
- You have 60 days after receiving the adverse action notice to request your free CLUE report.
- After reviewing the CLUE report, you find claims that were paid against someone else's policy, not yours. You file a written dispute with LexisNexis, the provider of the CLUE report, about the erroneous information at the address given in the adverse action notice.
Upon receiving your dispute, LexisNexis:
- Must investigate before the end of 30 days after the dispute is received.
- May extend the time for 15 more days if you provide additional information within the first 30-day period.
- Must remove the disputed information if, after investigating, the information cannot be verified.
- Must send you a written notice not later than five days after the investigation is completed.
You are entitled to free reports in one of two ways:
- If an insurance company makes an adverse decision based upon consumer report information, the insurance company must tell you how to obtain a free report.
- If you exercise your rights to a free insurance "specialty" report, the consumer reporting agency, that is LexisNexis or Verisk, must provide a free file disclosure every 12 months.
What does "adverse action" mean?
There are a number of situations where an insurance company might make an "adverse" decision, triggering your right to a notice and free copy of your report. Here are some examples:
- You apply for homeowner's insurance with a new insurer and you are denied insurance because of the claims reported in your CLUE report.
- Your existing insurer checks your credit report and increases your premiums because of late payments or public records such as a bankruptcy or tax lien. The weight to be given such negative factors is for the insurance company to decide, not the consumer reporting agency that prepares the report.
- You apply for automobile insurance but are turned down because your credit history is too "thin" to rank the insurer's level of risk in insuring you.
When can I get my free CLUE report?
Even if you have received a free report because of an adverse action, discussed above, you still have the right to receive a free annual report.
You can get your free claims history or CLUE report from LexisNexis online or call (866) 312-8076. To request a free Verisk A-Plus loss-history report, call their Consumer Report Request Line at 800-627-3487
Keep in mind that insurance decisions may also be based on your credit history. For this reason, it is a good idea to exercise your right to free credit reports as well. Consumers are also entitled to one free credit report from each of the three national credit bureaus.
Privacy Rights Clearinghouse, The 'Other' Consumer Reports: What You Should Know about Specialty Reports
Federal Trade Commission, Consumer Reports: What Insurers Should Know
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