Little-known insurance report keeps track of your claims: Internet Scambusters #555
You may not know it but if you've made an auto or property loss claim in the past 7 years, you've probably got a record -- in the form of an insurance report detailing your claim and available without your consent to most other insurers.
That could be a problem if the report contains errors or reflects a bogus claim by someone who stole your identity.
In this issue, we explain how the report system, known as CLUE, works, and how you can protect your record and, perhaps, your reputation.
CLUE Yourself in About This Insurance Report
From time to time we step outside the world of scams to look at the broader issue of data privacy and security, and the organizations that collect information about you, like credit scoring agencies and, this week, insurance report compilers.
In this issue, we're highlighting a little-known database called CLUE, which holds information about any auto or homeowners' insurance claims you make.
Just like your credit score, the information in these records, accessible by any subscribing insurance company -- which means most of them -- can be used to decide whether or not to do business with you.
That's fine, as long as the information is secure and accurate, an issue we'll get to in a moment.
It's important to stress that we're not making any judgment about CLUE. It provides a service that's undoubtedly useful to insurers.
But, in the interests of your privacy, it's important to know about it, what it does and the risks that the information could be used against you.
What is CLUE?
CLUE stands for Comprehensive Loss Underwriting Exchange. (There's also a similar, smaller database service called A-PLUS.)
Basically, it's part of the process that establishes whether you're a good insurance risk and the likelihood that you'll make a claim.
It's based on the assumption that people who've previously made a claim on their insurance policies are more likely to do so again.
So, the insurance companies submit information on any claim you make to the operators of the CLUE database, a public company called LexisNexis, which also compiles many other records.
Then, when you try to buy insurance again, perhaps from a different company, that firm will check your CLUE record via a specialist data broker.
The database holds records both about individuals and particular properties/vehicles that might have been the subject of an insurance claim, but many people may not even be aware of its existence.
It includes names, date of birth and, according to the non-profit Privacy Rights Clearinghouse (PRC), your Social Security number.
Critically, it also includes details of any auto or property loss claims made during the prior seven years and, if the insurer paid out, how much.
Insurers use this information, plus your credit score and other information, to compile what they call your insurance score.
Insurance scores may differ from one company to another. There is no standard way of calculating them.
Note that if you have not filed a claim in the past seven years, you likely won't have a CLUE record.
What Could Go Wrong?
We're not entering the debate about whether collecting and storing this kind of information is fair or not, but there are four potential issues that might concern you:
1. It's one more online record, with sensitive information about you that could be useful in the hands of crooks, hackers and scammers.
However, LexisNexis is itself involved in advising and helping others with their security and says it enforces high levels of security for its own records.
The firm says on its website: "Once we receive personally-identifiable information, we take steps to protect its security on our systems. In the event we request or transmit sensitive information, such as credit card information or Social Security numbers, we use industry standard, secure socket layer (SSL) encryption."
2. An identity thief could file a false insurance claim in your name, resulting in a CLUE report that has an adverse impact on your insurability.
3. The database may simply have inaccurate information.
4. It may contain useful information about, say, a property you're thinking of buying -- for example a claim for a major water leak -- which is not accessible to you unless, and until, you actually try to insure it.
How to Protect Yourself
If you're just renewing your insurance policy, it's unlikely your insurer will review your CLUE record, but if you're taking out a policy with a new company, they almost certainly will.
Either way, here are five key actions you could and should take:
1. As with the credit reporting agencies, you're entitled to at least one free copy of your CLUE record each year.
2. If you identify any errors or bogus claims, tell LexisNexis.
Your report will include an explanation of how to dispute the information.
3. If you're buying a property, you cannot directly find out if it has been the subject of an insurance claim -- but the seller can, for a small fee.
4. Get to know your state regulations.
To find out more, contact your state Insurance Commissioner.
5. Get CLUEd in.
It's worth spending a little more time on understanding how your insurance score is calculated and the role that the CLUE database and your credit score play in calculating it.
Ask your insurer or broker for more information.
As we've previously reported, for your own security, it's important to know who's collecting information about you and what records they hold.
Having that knowledge is a key defense weapon against scammers and other unscrupulous individuals and firms.
Knowing about your CLUE insurance report and keeping track of what it knows about you is an important element of that process. So get it.
That's it for today -- we hope you enjoy your week!