CLUE, or Comprehensive Loss Underwriting Exchange, is a database that car insurance and home owner’s insurance companies use to help them determine a potential client’s risk of filing a claim. If someone has filed one or more claims on a vehicle, the insurance company is more likely to charge a higher premium because they believe the driver poses a greater risk. Some drivers worry that the information in the CLUE reports infringes on their privacy rights because consumers have very little control over what is posted in the reports.
How CLUE Reports Work
Insurance companies included in the CLUE network report any auto insurance information about claims filed for a particular vehicle. When the driver of that vehicle attempts to purchase new car insurance, the new company can access the CLUE information to determine the driver’s risk potential. The only insurance companies that are allowed access to the database are the ones that actively participate in the program.
CLUE Reports Travel With the Vehicle or Home
When you file a claim with a CLUE reporting insurance company, that claim will continue to be listed in the CLUE report for several years. Some states maintain 7 years of claims reports, while others cap the reports at 5 years. The claims reports are linked to the individuals who filed claims, but they are also linked to the vehicle or property for which the claim was filed. This means you could buy a used car and discover that the insurance on that car is extremely high because the vehicle was damaged in an accident before you bought it. This might be beneficial if you could access a CLUE report on the car before you bought it, but only the car owner at the time of the accident would have a right to that information.
Possible Errors in CLUE can Influence Future Insurance Rates
Since the CLUE report is a key element for determining premiums, or even whether a policy will be rejected, it’s important that the information contained in the report be as accurate as possible. Unfortunately, mistakes can and do happen. The data is collected and posted to CLUE by each separate insurance company. Once it is in the database, it reflects your personal claim history. Even small details about a claim can make a huge difference in the impact the report has on future insurance coverage. The problem is that most people have no idea that their claims history is being stored and shared between insurance companies, so they don’t realise that they need to make sure that information is correct.
Most Consumers Don’t Have a Clue
The typical car owner has no idea that CLUE exists until an insurance company surprises them with a policy rejection or a sudden increase in premium. The insurance companies share this information between one another, but rarely disclose the information to customers unless the customer specifically requests a copy of the report. The almost secret nature of CLUE listings prevents customers from protecting themselves against false or incorrect claim information, even though the information has a direct bearing on their insurance costs.
Reports Include All Information about Any Claim Filed
When insurance companies file reports about claims, they include every detail of those claim from beginning to end. Phone conversations, police reports, repair invoices, and even conversations between agents and customers can be recorded for inclusion in the CLUE database. This practice could be considered a violation of privacy rights because consumers do not sign any documents giving the insurance company permission to share the information with other insurance companies. The information is collected and posted by the insurance company without any input from the customer whatsoever, without consumer knowledge or consent.
CLUE Information Nothing New
The information collected and stored in the CLUE database has always been available to insurance companies through public records and other research methods. The database simply puts all of that information together in one central location where it can be accessed quickly and easily by any participating insurance company. Previously, insurance companies might not have gone to the trouble to research every single policy application. With CLUE, the information is much easier to access, so the insurance companies are more likely to use it when making decisions about current or potential customers. CLUE is also a bit more detailed than public records because it includes phone conversations and other more personal elements of the claim process.
Consumers can Protect Themselves Through Awareness
The best way to protect yourself against erroneous CLUE listings is to request a copy of your file through your insurance company and request corrections or notations on the report. You have the right to view your CLUE file any time you wish. Another way to protect yourself would be to ask your insurance representative if the company participates in the CLUE database. Unfortunately, there is no easy way around CLUE. Companies use other databases as well, such as ISO’s A-Plus. You also have the right request your A-Plus report to find out what is in it.