What Insurers Know About You
Insurance Companies rely on many different means to determine if they will offer or continue your insurance coverage. They use your application and sometimes physically inspect your home or auto; all these things determine the terms, conditions and pricing. They also rely upon certain other reporting institutions that maintain large databases consisting of the following:
Motor Vehicle Reports
Subject to constraints that vary slightly from state to state, insurers have access to your driving record. They learn what accidents have been reported and what moving violation citations have been recorded.
Credit Reports
Provide insurers access to much the same information as is reviewed by a prospective lender. While not everyone agrees, underwriters insist there is a strong correlation between poor credit scores and frequency of claims for both home and auto. You can obtain copies of your credit reports and credit score from the three main credit-reporting agencies:
- Experian 1-888-524-3390 or www.experian.com
- TransUnion 1-800-888-4213 www.transunion.com
- Equifax 1-800-685-1111 www.equifax.com
Many insurers have minimum credit scores that are required before they will issue you a homeowner's policy, and other insurers use credit scores to determine what price tier to offer you for auto insurance.
CLUE Reports
The ChoicePoint Asset Company maintains a huge database supplied with information from most U.S. insurers known as the Comprehensive Loss Underwriting Exchange. You can obtain a copy of your own CLUE report:
- ChoicePoint 1-800-456-6004 www.consumerdisclosure.com
ChoicePoint collects and correlates personal insurance claims data for both homes and autos by name, drivers license number, and location. In some cases, you may have a clean record but the house you are planning to buy might have a long history of claims; that may be a problem when you attempt to secure insurance to close escrow.
These records typically are maintained for five years although many insurers disregard activity more than three years old, and some particularly adverse activity, such as a drunk driving conviction, may be retained and used even beyond five years.
Although insurance companies collect a lot of data about you, remember federal legislation requires insurance companies to protect your information and publish their privacy policies. It's a good idea to periodically review privacy policies of companies you use.