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Blog: Paper Doll, Tackling The Stacks And Piles
Who Knows Your Secrets? Part 3: Get A CLUE About Insurance Reports



The final mystery is oneself.

~  Oscar Wilde



Oscar Wilde may not have known it, but his statement is applicable to how much of a mystery our own financial "secrets" can be, even to ourselves. Sure, you may be skilled at sussing out that Colonel Mustard did it in the library with the candlestick. But what if Mrs. Peacock, the agent from your insurance company, Mustard Mutual, canceled your homeowner's policy with a pen stroke? Would you know why, or what it meant?

As we've been discussing over the past few weeks, just by going through our daily lives, someone gets to collect a paper trail of information about our activities. Consumers tend to know about credit reports and FICO scores, but are less likely to know about the various Big Brother agencies (TeleCheck, Checks Systems and EWS) keeping tabs on banking and checking habits

We tend to worrying about dumpster-diving identity thieves, but it turns out that there are many others out there legitimately (if inaccurately) gathering and disseminating information about us. Indeed, the more Paper Doll digs, the more it seems that when it comes to consumer awareness of insurance paper trails, nobody has a clue!



CLUE is the Comprehensive Loss Underwriting Exchange, operated by ChoicePoint, a division of ChoiceTrust. CLUE maintains a huge claims history database of basic policy information, including name, date of birth, policy number(s), plus various claim information, including the date of loss/damage, type of loss incurred, the amounts paid to the policy holder (or, occasionally, to another party), and a description of the property covered. Claims information generally goes back anywhere from three to seven years.

No mystery, right? All this data enables insurance companies to access past claims information when they're risk-rating, underwriting or renewing an insurance policy. Unfortunately, as with most of the reports developed by third parties, information about us is not always accurate or complete. 

TAKING THE FALL FOR SOMEBODY ELSE

Take, for example, Jim Deck of Nashville, TN. He was notified of a huge increase in his renter's insurance due to adverse information in his CLUE report, which included a reference to a car accident where an insurance company paid out a significant amount on a policy. The only problem? The car in the reported accident wasn't Mr. Deck's, but his mother's, and he hadn't resided at the same address as his mom in 13 years. The record of an accident claim by someone at the same address can end up on the wrong person's report. 

Not worried? You might want to reconsider that. Even if your parents, your post-college roommates, or your current spouse all have blemish-free insurance records, if people who lived in your apartment before you rented, or bought your home after you moved, total strangers (because they reside or resided at the same address as listed on your CLUE report--even if you never lived there at the same time) could prevent you from getting insurance or cost you an arm, leg or other beloved body parts in increased interest rates.

THE CLAIM THAT NEVER WAS!

The CLUE report may also include negative information resulting from claims you decided not to make! Let's say you call your insurance company to make an inquiry as to whether something would be covered--perhaps water or smoke damage--but then never make a claim. Maybe the cost of repairs would be less than the cost of your deductible; maybe you were just worried about what that ice storm brewing outside might do to your roof.

If your little call is reported by your insurance company to the Comprehensive Loss Underwriting Exchange, unless you reside in a state that forbids such practice, your policy could be canceled, failed to be renewed or have rates increase...all because of an inquiry that never even led to a claim!

It's not just the little guy who suffers; distribution of inaccurate information is an equal opportunity experience. According to the Privacy Rights Clearinghouse, at an August 4, 2003 press conference on unfair insurance practices, the California Insurance Commissioner reported that the Chief of the Consumer Services Division of California's Department of Insurance was turned down when he tried to insure his new home. A seriously flawed CLUE report showed five claims: two were for properties the seller owned in a different city, two were coverage inquiries that never resulted in actual claims, and the final claim was resolved and shouldn't have been used to determine his eligibility in the first place.

(Paper Doll imagines, though, that the Chief of the Consumer Services Division of the California Department of Insurance probably got expedited assistance. I don't envision the Chief listening to The Girl from Ipanema on ChoicePoint's on-hold Muzak for hours on end.)

YOUR DREAM HOME BECOMES A NIGHTMARE

If you're considering buying a home, you'd want to know what kinds of homeowner insurance claims have been made against it. First, you'd want to know if there are any recurring problems (flooding, roof damage from neighboring trees, etc.) that make the home less attractive or will cost you higher insurance premiums.

Beyond that, even if you've never, personally, made an insurance claim, if a property comes with its own history of repeated claims, such as for water damage, the property itself could be blacklisted, preventing you (as new owner) from getting insurance coverage at any cost!

The U.S. Fair Credit Reporting Act only allows CLUE reports to be accessed by the owner, insurer or mortgage institution for the property. However, before you buy the house, you can request that the current owners of the property order and provide you with the CLUE report for the house. (You might be doing them a favor; if they're like most consumers, they probably don't even have a clue...about their own CLUE report.)

CLUE'S PARTNER IN CRIME

Insurance companies use two main tools to determine how likely you are to file a claim on your policy:

1)  Your CLUE report; and

2)  Your insurance score is based mostly on your credit score, along with other public records information. Yes, it may seem that the insurance companies are assuming inability to pay bills on time makes one more likely to have hail damage, but it's not always so simplistic.

Because credit scores include records of personal bankruptcies, tax liens, garnishments (for taxes, child support payments, etc.), foreclosures, and civil judgments, the insurance companies feel they can get a pretty good feel for a potential policy-holder's ability to honor the payment contract and deal honestly with regard to making claims.

Different insurance companies use different models to develop insurance scores, so it's a good idea to ask your agent (or prospective agent) about the model his or her company uses. Because the ways in which insurance companies use credit information can vary widely, a good resource for understanding all the issues is Consumer Brochure -- Alaska:  Understanding How Insurers Use Credit Information.

Paper Doll
leaves it to you readers to decide how predictive you think even accurate credit score information is in the development of a score to determine insurance risk. Nonetheless, various states have passed laws curtailing the use of credit report data in insurance scoring, and the Federal Trade Commission has ordered nine major insurance companies to submit information regarding their use of credit reports in determining insurance scores.

With these two factors determining how (and at what rates) you can get homeowner's and auto insurance coverage, it's time to get a clue...about your CLUE!  In fact, professional organizer and Daily Money Manager Nanette Duffey says, "Knowing and understanding the contents of your CLUE report provides useful and no-cost information to consumers. Reviewing your report, especially after experiencing a significant insurance claim, is empowering. I consider it one more step towards becoming a financially savvy and confidant consumer."



GET YOUR CLUE REPORT

Because ChoicePoint, the major provider of property loss reports, including those generated by CLUE, is considered a consumer reporting agency under the FACT amendment to the Federal Credit Reporting Act, you have some consumer protection. This means you can order a free copy of your CLUE report, annually. To obtain your report:
  • Go to ChoicePoint's ChoiceTrust.com page.
  • Click on "Review Your FACT Act Disclosure Reports" and register as a new member.
  • Once you've registered, click on the "Personal Insurance Reports" link at the top of the resulting page.
  • Select "Learn More" on either the CLUE Personal Property report or the CLUE Auto Report.  (Don't click on the lower level, where they combine the free CLUE report with an insurance report, as that option is not free).
  • Select "Both Reports" under Order Options and then provide multiple screens of personal information--including answers to an "Identity Information Quiz" to prove that you actually are who you say you are. (You didn't think they were going to make this easy, did you?)
  • Print your order confirmation...but DON'T CLOSE THE WINDOW. This report is designed to be viewed online, and you'll have access for only 30 days, so click the "Continue" button to view (and print) your reports.
You may also call 866-312-8076 or mail your request to:

C.L.U.E. Inc. Consumer Disclosure Center
Attn: FACT Act Request
P.O. Box 105295
Atlanta, GA 30348

ChoicePoint will then send you a form you can fill out and return by mail.

The Federal Credit Reporting Act also ensures that, over and above this free report, if you are ever denied homeowner's or auto insurance, your policy is canceled, your coverage is limited, or your premiums significantly increase, you are entitled to an additional free copy of your report.

If any of the above occur, your insurance company must provide you with an adverse action notice. You'll have 60 days from receiving the notice to request your free CLUE report. Upon receiving it, you can dispute any inaccurate or incomplete information and ChoicePoint must investigate and correct any errors; if you're dissatisfied with the results of the investigation, you have the right to file a statement to that end, which will appear in all future reports.



A-PLUS

Finally, while ChoicePoint's CLUE report is the major suspect in the mystery of your insurance paper trail, Insurance Services Office (ISO) does offer its own, lesser-known competing report, based on information reported by over 1,400 insurers to the Automobile-Property Loss Underwriting Service...also known as the A-PLUS. These reports are governed by the same Federal Credit Reporting Act FACT dispute policies as described above in the CLUE section, so it's definitely worth your time to obtain your report annually and if you ever receive an adverse action notice. 

A-PLUS reports can't be downloaded or viewed online; rather, they are mailed within 15 days of a request. To order your own A-PLUS report, call 800-627-3487. For more information, you can visit ISO's A-PLUS page.

Readers, please solve the mystery of your own insurance paper trail: get a CLUE and earn an A-PLUS.

posted on: 11/3/2009 10:30:00 AM by Julie Bestry
category: Paper


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Discuss This Post


by Sara on 11/3/2009 2:07:29 PM:

Yes amazing how confusing things can be. My ex husband's wife had the SAME first name as me - and we were always getting each other's information - frankly it isn't just a bother it is a PRIVACY issue that these companies don't get things right IMHO! Really really really annoying!

by Janet Barclay on 11/6/2009 10:46:57 AM:

This is scary, scary stuff! I wonder if it's the same here in Canada... sure hope not.


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Paper Doll, Tackling The Stacks And Piles


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