Insurance scores? Yes, like credit scores (like it or not), they’re for real. Two controversial, secretive US based private companies little known by much of the general public are in fact playing an ever increasing role in the setting of insurance rates for homeowners, licensed drivers, and others.
Most people are unaware that virtually all claims they file with their insurance company (ies) now end up in vast, privately run databases that are routinely accessed by the insurance industry in order to assist them in setting the rates they will charge people (in some cases denying coverage entirely). In other words, if you file a claim with one insurance company, that fact may be used by another company to raise your premiums, even if your claim record with the new company is spotless.
Additionally, these databases don’t only contain claims categorized by a person’s name(s), they also store claims by the addresses of the homes on which the claim(s) were made. The result is that a new homeowner could find themselves paying higher rates because they bought a home where someone else had submitted one or more claims in the past.
While such past claims history can be an indicator of possible future claims and helps insurance companies make educated decisions about risks posed by potential customers and specific properties, one big drawback to such an approach is that repairs, improvements, upgrades, and remodeling; which often eliminate the cause of the past claim(s); and which are frequently undertaken by the new homeowner; are not reflected in the stored property history. The result is that a new homeowner could find themselves paying higher premiums due to one or more past property problems which no longer exist.
In addition to homeowners and specific properties, these databases also contain data for vehicle insurance claims.
The primary insurance database is called the Comprehensive Loss Underwriting Exchange, or CLUE for short, and is maintained by ChoicePoint, a Georgia-based company. They have approximately 40 million claims on file.
The other database is the Automobile Property Loss Underwriting Service, or A-PLUS, and is maintained by a New Jersey company called ISO. ISO will not reveal the number of claims it has on file.
Since 2006, California has required insurers to notify their customers that claims information may be shared with third parties. This disclosure is spelled out in the fine print accompanying policies and claims forms
Regardless of how you feel about these databases, given their importance and the fact that as much as seven years of a person’s and/or property’s claims history is kept, it’s a good idea for everyone to take advantage of the California state law (other state homeowners should check with their insurance company and/or state insurance office) which entitles you to a free copy of your CLUE and A-PLUS files once per year; in order to see what’s there and whether your report contains any erroneous information.
To order your free CLUE report, click: Free CLUE Report.
For your free A-PLUS report, click: Free A-PLUS Report, and look for the link under “Useful Features” in the lower right corner.