Today, we’re explaining how insurance companies share information, including what type of information is shared between insurance companies.
First, insurance companies do not directly share information about individual policyholders with other insurance companies.
Let’s say you currently have car insurance with GEICO and are considering a switch to State Farm. When you request an estimate from State Farm, State Farm will not call GEICO to verify information about your claims history. Insurance companies do not consult with one another or share information directly.
However, all insurance companies access centralized databases containing complete claim information for a driver.
Insurance Companies Use Centralized Databases to Access Driver Information
Car insurance companies don’t directly share information with one another. Instead, they subscribe to centralized data services – like specialty consumer reporting agencies. These companies sell information about your driving record to insurance companies.
In the example above, State Farm doesn’t get information about you directly from GEICO. Instead, GEICO reports information to a centralized insurance database. Then, when State Farm is underwriting your claim, State Farm will access your driver history from this centralized database.
Through this system, insurance companies access common information about individual drivers even though they aren’t directly sharing information with one another.
Two of the biggest consumer reporting databases are CLUE and A-PLUS. A company called LexisNexis runs CLUE, while Verisk Analytics runs A-PLUS. Some insurers request a copy of both reports prior to insuring a driver.
Insurance Companies Have Access to Your Entire Claims History
Your CLUE or A-PLUS report includes everything the insurance company needs to know about you. When you sign up for car or home insurance, you give the insurance company permission to access your CLUE or A-PLUS report.
- The information included on your CLUE or A-PLUS report includes:
- Your vehicle information (VIN, make, model, mileage, etc.)
- Your home address
- Claims you made that did not result in a settlement
- Claims that were denied
- Claims made by a previous policyholder if they increase the chance of further damage (say, if the person who previously owned your home filed a flood insurance claim two years ago)
- Inquiries about damage or claims (say, if you call your insurance company to determine whether or not it’s worth filing a claim over a cracked windshield)
How Long Do Claims Stay On My Record?
Fortunately, your CLUE and A-PLUS reports don’t track claims forever. Eventually, claims will fall of your record. An at-fault accident that’s 10 years old, for example, will no longer affect insurance premiums.
Claims remain in your report for:
CLUE: Seven years
A-PLUS: Five years
General inquiries may also appear on your report – say, if you call your insurance company to ask whether or not a broken windshield may be covered. Some insurance companies give you a claim number as soon as you make an inquiry. If your claim has a claim number, then it’s sure to appear on your report.
22 states, however, an insurance companies from treating inquiries like claims.
Hint: to avoid having an inquiry appear on your CLUE or A-PLUS report, pose a question as a hypothetical. If you confirm damage has occurred to your vehicle, then it’s more likely to appear in your CLUE or A-PLUS report.
How Do Insurance Companies Evaluate a New Driver?
When applying for car insurance quotes online, car insurance companies will initially take your information at face value. They don’t do a full background check when you request a free quote, for example. They’ll take your word for it.
If you are happy with that quote, then you can request a full policy from that insurance company. You fill out more detailed information, and the insurance company builds a rate plan for you.
At this point, the insurance company should begin the underwriting process. During this process, the car insurance company will verify your personal information, claims history, credit score, and other factors.
If you lied during the initial application, then your lie will be discovered during the underwriting process. At this point, your request for car insurance could be denied entirely. Or, the price you were initially quoted could rise.
What Kind of Information is Provided By Specialty Consumer Reporting Agencies?
State Farm doesn’t call up GEICO to investigate a policyholder. Instead, major insurance companies rely on different specialty consumer reporting agencies. GEICO reports this information to the agency, and State Farm accesses this information upon request.
Some of the information stored by a typical specialty consumer reporting agency can include:
- Car insurance claims, including the value, type, and number of claims made by a driver
- Insurance claims on your homeowners or renter’s insurance policies
- Employment history
- Number of new bank accounts opened
- Credit-based insurance score
- Other financial information
How to Request a Copy of your Personal Data from a Consumer Reporting Company
Curious about what’s on your consumer data report? If you frequently get denied for car insurance, or if you seem to be receiving weirdly high quotes, then it’s possible there’s an error on your consumer report.
There’s no universal report. Instead, you need to request a report from each of the major specialty consumer reporting agencies. The Consumer Financial Protection Bureau (CFPB) offers a list of major specialty consumer reporting agencies here, including how to request a quote from each agency.
Under the Fair Credit Reporting Act, you are entitled to receive one free copy of your CLUE and A-PLUS report every 12 months. Since the two reports could cover different things, it’s best to request a copy of both reports.
You can request an A-PLUS or CLUE report over the phone. Call LexisNexis at 866-312-8076 or call Verisk at 800-627-3487 to request a copy of either report.
Auto insurance companies do not share information directly with one another. However, they do share information about your driving record and claims history to centralized consumer reporting agencies.
During the underwriting process, a car insurance company may request a copy of your data from one of these agencies to verify your risk as a policyholder.