When you apply for a loan, the lender will take a look at your credit history. But did you know that when you apply for auto insurance, your insurer probably will pull your CLUE report?
No clue about what a CLUE report might be? CLUE is the acronym for Comprehensive Loss Underwriting Exchange. It's an insurance industry database that helps your insurance company figure out how high your premium should be.
What's a CLUE report?
CLUE is a unit of LexisNexis. The database provides a seven-year insurance history that includes losses associated with someone's homes and cars.
Insurers use CLUE for underwriting -- the process used to determine the risk involved in insuring the policyholder. It's important for companies issuing car insurance policies to know just how much risk they are taking on. If, for example, a person has a long history of auto accidents and expensive claims, that person is a bigger risk -- and insurers probably will slap that person with a higher premium.
The CLUE database gets its information from insurers, which submit data about their policyholders to the system. So, if you have never had insurance, you won't have a CLUE report.
What's in my CLUE report?
Your CLUE report will provide information about your driving record and insurance claims, according to the Washington State Office of the Insurance Commissioner. The report commonly includes:
• Your full name. • Birth date and birthplace. • A current policy number. • Past auto insurance claims. • What kind of losses you've incurred. • How much the losses cost. • A description of the insured vehicle.
What if there is a mistake in my report?
You are entitled to a free copy of your clue report, thanks to the Fair Credit Reporting Act. This gives you a chance to review it for errors, just as you would a credit report. You can order your CLUE report on the LexisNexis website.
If you find a mistake in your CLUE report, you'll have to notify LexisNexis. Call 888-497-0011 for details.
In general, LexisNexis has 30 days to compare your dispute with the insurance company's records and report back to you. If you think some information on your CLUE report warrants further explanation, you can submit a personal statement that will be included on all future CLUE reports so that insurers get your side of the story.