Car Insurance Companies: How They Use Clue Reports
CLUE reports are something that drivers should know about, because car insurance companies can use them in ways that may affect auto insurance premiums. Being clueless about a CLUE report means that you could end up paying an arm and a leg for insurance or being denied coverage.
What Is a CLUE Report?
A CLUE report is a kind of “claims report” that keeps tabs on what kinds of payments a consumer may get from car insurance companies. Any time a consumer makes auto insurance claims or other kinds of property insurance claims, they get routed to a central database, sometimes without the knowledge of the claim filer. Then, when a new insurance company is looking at an existing policy or issuing a new one, they can call up this report and easily see an individual's claim history, including what company the claim was issued to, how much the company paid, and what the claim was related to.
Auto Insurance Companies and CLUE Report Use
Auto insurers get the CLUE report from the central database to find out about auto insurance claims history for a driver or household. These companies are in the business of risk assessment, and a CLUE report helps them to further limit their own risk when they calculate insurance rates. However, this often seems unfair to the policyholder: random information on a CLUE report, such as extraneous insurance data unrelated to claims, or inaccurate information, can cause an insurer to jack up insurance rates or deny continued coverage to the customer. Analysts have seen that this often happens: some wrong or misleading information makes a huge impact on how insurers view the CLUE report. This has some states working to limit the use of CLUE reports and reassessing auto insurance policies.
What Auto Insurance Companies Do with CLUE Reports
The auto insurance company receiving the CLUE report does not often have the driver's best interests in mind. Commonly, after reviewing a CLUE report that includes past claims, the auto insurance company will raise the insurance rating and risk assessment, and recalculate the premiums accordingly, pushing the drivers cost higher. Even a small item on a CLUE report may lead the company to deny coverage after a policy term has ended or when it is near its end.
What Drivers Can Do
Consumers have a right to know when someone is using their CLUE report against them: insurers must issue information on how to get this document. An individual is entitled to their own CLUE report from a credit bureau or related agency. Consumers can also appeal data on their CLUE reports that they feel is inaccurate.
All of the above will help you if you're in a situation where your CLUE report may be harming you without your knowledge. The first step is to get this document and look at it to make sure it accurately reflects your claims history. Then, negotiate any existing insurance problems with your insurer to avoid some of the bad results mentioned above. Remember, in the insurance world, you are your own advocate, and no one else can or will do for you.
