We know our insurance rates are determined by a number of factors –driving record, vehicle, credit scores, discounts we may be eligible for and more. Some information provided by prospective customers is confirmed through state motor vehicle reports and credit agencies. But insurance companies are now using more sources for information.
One of these sources is CLUE – the acronym for Comprehensive Loss Underwriting Exchange. The exchange operates in much the same way that credit agencies work. Credit agencies accept information provided by creditors on credit customers. Details such as how much credit you have and your payment history then are made available to other creditors to help determine credit eligibility. Insurance companies report claims to the CLUE exchange. The date of a claim, amount paid, and details of the incident are then made available to other insurance companies to assist in evaluating insurance risks.
CLUE reports can include all types of claims. One of the most common is a multi-vehicle accident which has also been reported to police. However minor accidents or single vehicle accidents that have not been reported to law enforcement will also appear. So that time that you backed into a pole in a parking lot, did not call the police, but still filed a claim with your insurance company will be listed. Comprehensive claims such as animal collisions, weather damage like hail, fire, theft, and vandalism will all be listed and coded accordingly. Claims for glass repair and replacement and towing also appear. And even claims that were reported, but later determined no damage occurred will still appear on the CLUE report.
Each insurance company has different criteria for acceptance and rates for customers. Some charge extra only for at-fault accidents and violations. Others have tiers which offer better rates for those who have been accident, citation AND claim free. It can be easy for a prospective customer to forget about that rock that broke the windshield two years ago – or not be able to recall exactly how long ago that little scraped-the-fender- heading-into-the-garage incident was. CLUE gives companies access to information that might not otherwise be available, allowing them to fully review a risk and charge accordingly. It can also lead to coverage being declined – have you filed five towing claims in the last year? That benefit may not be available to you – until you replace the vehicle that repeatedly leaves you stranded.
Occasional coding errors can occur on CLUE – perhaps listing an accident as at fault when it was not. It is important that you retain all documentation for claims including police reports, letters, copies of checks and correspondence to correct such errors if they occur. Individuals may obtain a copy of their CLUE report by visiting the following website: https://personalreports.lexisnexis.com/. If you don’t have computer access, you may also call 866-312-8076. However, if you have documentation confirming your version of the facts, you can usually submit it to your agent, and your rates will be corrected – it is generally not necessary to correct them directly with the Comprehensive Loss Underwriting Exchange. Again, it is VITAL that you keep documentation on the smallest incident involving your driving record, car or insurance. Having this information handy could save you a lot of time and money.
With advancements in computer technology, several other reports are routinely used by insurance providers. These include:
Prior Insurance Report – many companies report to each other the basic history of their customers. This will include the dates of coverage, including lapses, the level of liability coverage, and length of time insured with the company. Insurance companies have long given “prior insurance discounts” to customers that maintain uninterrupted insurance protection. Many companies have expanded those discounts for customers that have been insured with the same company for many years, and for maintaining high levels of liability protection. Some even vary rates depending on the type of prior insurance company you had – preferred or high risk.
Possible Related Driver report – insurance companies use this report to discover if there are other drivers in your household which may operate the insured vehicles. Since risk and rates are partially determined by the driving record and experience of the drivers, companies require that all licensed drivers in the home be disclosed on the application. For motorcycle customers, this usually means all drivers that have a motorcycle license or permit must be listed. Once a driver is disclosed, you may have the choice to list them as “rated” – meaning they regularly drive the vehicles, “excluded” meaning they do not ever drive the vehicles and are excluded from doing so, or “non-rated”. Non rated drivers are usually insured on their own vehicles under a separate auto policy and proof must be shown to this effect. If on occasion they do operate your vehicles, they are covered to do so. The Non rated classification used to be widely available, but more and more insurers are clamping down and requiring that drivers be either rated or excluded. This clamp down is due in part to the large number of non-married people living together and children of driving age splitting time between their divorced Mom and Dad’s homes and a large number of customers failing to notify their insurers of this additional resident driver.
Residence Verification – The US Postal Service offers programs to enable companies to confirm the addresses listed for customers are accurate. This means not only is the address valid, but that the person listed at the residence actually lives there. This can be an important issue, as rates are in part based on the home garaging address of the vehicle. In states that allow taxation on insurance premiums, local municipalities also require use of this program to ensure that drivers that live or garage vehicles there pay the appropriate taxes. If you have not updated your driver’s license or your address with the Postal Service after a move, you may need to show proof of residence for a policy at your new location.
Mileage Report – some insurers are now using mileage reported when you take your car in for service to confirm your yearly driving habits. Companies don’t tend to surcharge for extra mileage on bike policies, but auto rates can be impacted significantly by the number of miles you drive annually.
These reports are tools to give insurance companies more detail when quoting and reviewing potential customers. However errors can occur. As an agent, we review the reports to uncover possible issues and address them up front in the quoting process. No price is useful if further investigation uncovers details that negatively impact the price. In our eyes, the report is the starting point – a full review with you ensures we are offering the best rate for which you are eligible.
Karen Diehl operates Diehl Insurance with husband Eric. They agency specializes in motorcycle insurance for motorcycles and collector cars in Ohio, Kentucky and Indiana.
