Volume 10, Issue 2 - March/April 2008
From kindergarten on, most people start worrying about their “permanent records.” There’s the school record, of course, and, the criminal record—for some. But there’s another record out there that many don’t even know about it. It’s called the Comprehensive Loss Underwriting Exchange (CLUE, for short) Report—and a company called ChoicePoint in Alpharetta, Ga., maintains it. The report is available for all types of personal property—and, most importantly, for auto insurance.
The CLUE Personal Auto report will display detailed auto insurance loss information, including the insurance company that handled the loss, the policy number under which it was handled, the type of policy, the date of loss, the type of loss, the amount paid and the loss status (open or closed) for all auto insurance policyholders—past or present. This material normally stays on the report for five years—at which point it drops off, according to ChoicePoint.
Why Keep the Report?
“The insurance company will report the payment made to the insured,” she says.
While ChoicePoint holds that it is only the keeper of the information that insurance companies provide, a variety of information about the CLUE report is available all over the web.
“CLUE reports are one of the ways an insurer assesses how much of a risk it is assuming by selling you an insurance policy,” according to www.privacyrights.org. “The theory is that an individual’s history of filing insurance claims is a good indicator of how likely that person is to file future claims.”
While some insurers loosely maintain that only at-fault losses can affect future premiums—this isn’t written in stone and, because policies vary, it is difficult to tell whether or not a comprehensive loss, such as a glass claim, might affect a future a loss.
McCaul maintains that it varies by carrier—and by state.
“At-fault indicators when contributed by the insurance carriers are based on their guidelines or state-mandated guidelines,” she says.
CLUE reports are not only used to assess risk, but also are a factor in the rates insureds pay—the theory being that, if you’re a high risk and are likely to have an accident, you should pay more upfront for your policy. According to information from the Insurance Information Institute, “Insurers have been using loss histories as a primary underwriting and rating factor for decades.”
The Glass Part
For example, if your customer has a $250 deductible and the full amount of the work done is $350, then $100—the amount the insurance company paid out (on your behalf)—should show up on the report. Other details included would be the date of the loss, whether the claim was closed, what vehicle was involved, what policy it fell under and what type of loss it was (comprehensive or collision). The report wouldn’t tell that it was a glass claim, though.
It would say, for example:
If a loss was reported and a claim was set up, but the company did not issue any payments, it likely would read “$0 – COMPREHENSIVE”—but could nonetheless appear on the report, depending on the insurer’s reporting practices.
So, what’s the big deal? First, if there was no payout, some wonder why this should show up at all—the loss didn’t cost the insurance company any money. Many experts maintain that the fact that you had a loss at all still increases your risk factor.
But, when a payout is made, in the instance of a glass claim, for example, controversy can arise. If an insurer uses a third-party administrator, the amount reported on the CLUE report can be higher than the glass shop’s actual invoice.
AGRR magazine/glassBYTEs.com™, for example, traced one example where a hidden fee for processing the claim also appeared on the report—as part of the lump sum included on the payout line. Of course, the consumer wouldn’t know about this unless he pulled the report and put this together.
In the case of this consumer, whom we’ll call Jack Lorenson*, the original invoice from the glass shop showed a total of $350.66. Lorenson had paid his $250 deductible, so his insurance company had to pay $100.66 cents. The math is pretty simple.
But what was showing up on the CLUE report for this claim? “$118 – COMPREHENSIVE.”
Lorenson contacted Safelite, which had processed the claim for his insurance company, and requested a copy of the invoice on file there. When he saw this invoice, it was obvious where the $18 had come from; it was there in black and white: “1 PROGRAM FEE - $18.00.”
When Lorenson questioned a Safelite customer service representative (CSR) on this, he received an answer that was clearly disturbing to him as a consumer.
“That’s our processing fee,” the Safelite CSR advised Lorenson, when questioned about the charge. “We don’t work for free.”
Of course, Lorenson had no idea had the time of his glass claim that his insurance company, first of all, would be paying a processing fee. And he definitely had no idea it would show up on his own CLUE report—something that could affect how much he pays for future insurance policies (and something that could be a deciding factor in whether or not a company may insure him at all).
“I didn’t ask for my insurance company to contract somebody else to handle their glass claims,” Lorenson said. “And I definitely didn’t know they’d use the fee they pay against me.”
Safelite representative Jenny Cain advised AGRR that Safelite isn’t involved in the CLUE Report, and according to ChoicePoint, it’s the insurance company that ultimately reports a total payout for inclusion on the CLUE report.
So, Lorenson went to the source—the insurance company with whom this glass claim was filed: Progressive Insurance. The insurance company representative advised Lorenson that, first of all, it doesn’t keep records of claims older than three years, so this particular claim was no longer was in the system.
Lorenson questioned the representative generally about the charge, and the CSR advised he couldn’t speak to the charge without seeing the claim, but reminded him that Progressive considers a comprehensive claim a “zero-point loss”—meaning it wouldn’t be counted against Lorenson. The insurance company representative suggested Lorenson contact ChoicePoint.
“But, doesn’t ChoicePoint just record whatever you all report to them?” Lorenson asked.
“Well, that’s true, but they have older records,” the insurance company CSR advised.
“I’ll give it a try,” Lorenson replied, and hung up, without an answer.
So he called ChoicePoint. The ChoicePoint representative, as Lorenson suspected, advised that whatever appears on the report is what the insurance company provides. No breakdown is given. ChoicePoint offered for Lorenson to dispute the charge, but, after hearing many horror stories about the CLUE report, he was hesitant to anger the company that holds all of this powerful information.
AGRR was able to contact Progressive regarding Lorenson’s concern—without naming him, of course—and spokesperson Leah Knapp advised that the amount the company reports to ChoicePoint is the full amount provided by the third-party administrator.
“I can tell you that the full amount we're invoiced by our third-party administrator for a glass claim is the amount we send to CLUE,” she says.
She also reinforced what the Progressive CSR told Lorenson—that the company doesn’t raise rates based on glass-only claims.“At Progressive, the amount for glass-only claims on the CLUE report won’t cause you to get a higher rate, but it might preclude you from getting a better rate in the future,” Knapp adds.
What Does This Mean to You?
One Northeast shop owner, who wished to remain anonymous for fear of reprisal, had a close friend come to him with a broken windshield. He suggested she have the windshield repaired, so her deductible would be waived.
“But, won’t it affect my rates?” she asked. He told her he didn’t think it would.
A few weeks later she received a notice from her insurance company that she was being dropped for being too high a risk.
Is this common? It’s difficult to tell, but horror stories like these make the CLUE report something we’re probably going to be hearing more and more about.
Get a CLUE of Your Own
The easiest and most common way is to visit www.choicetrust.com. On the left side of the screen, click on “CLUE Reports.” Next, click “CLUE Reports in Compliance with FACT Act.”
inally, click the bullet next to “CLUE Auto Report” and click “Order Now.” Though it says “Order Now,” the report is free and you will not be charged to view this for the first time online.
This will take you to a log-in screen, where you create an account on the site, provide a bit of personal information, such as your name, address, social security number, driver’s license number, previous recent addresses, etc.
After you provide this information, the site will ask you a series of questions to verify that you are who you say you are—such as:
“Which of the following streets have you never lived on?”
If you get through this process (there are usually about three verification questions to answer), your report will appear on the screen for you to print—free of charge. The report will be available to you for 30 days, using the login information you set up previously. When applicable, it will also give you a list of any companies that have tried to access your information in the last two years, and provides information on how to dispute any claims with which you disagree.
If you prefer the old-fashioned phone route, call 866/312-8076 to order a report, though ChoicePoint will charge for a mailed report. The charge for the mailed report could not be confirmed.
Give Us a CLUE
Penny Stacey is the editor of AGRR magazine.