Long ago, applying for car insurance was a simple as filling out a short application. Today, the process is much more complicated, with car insurance companies using secret formulations to assess their risk in taking you on as a customer. To reach their conclusions, they must first research the background of the driver applying for coverage.
Although there are multiple sources of data, there are three primary reports they use to assess their risk. Continue reading to find out what types of information insurers have about you and how you can ensure it is accurate.
Your Driving Record
Your driving record is a complete history of your driving experience in the State of Minnesota and any other states you may have lived in during the previous 5 to 7 years. It includes your name, address, and date of birth, as well as information about the status of your driver’s license and whether it has previously been suspended or revoked. Your driving record will also include a list of traffic violations and citations, DUI reports, and any points you received for violations.
You can get a copy of your own Minnesota Driver and Vehicle Services record by filling out the application and submitting a small fee. It is rare to find errors on your driving record in comparison to certain types of consumer reports. However, it is possible. If you notice an inaccuracy, contact Driver Services at (651) 297-3298.
Your CLUE Report
Your comprehensive loss underwriting exchange report, also known as CLUE, is another important report that car insurance companies look at when calculating the cost of your car insurance. This report contains information about your claims history, from small chips in your car door paint to that time your car was broken into at a mall parking lot. Whether you were in a car accident, hit an animal, or were injured by an uninsured driver, any history of claims against your own insurance are listed on your CLUE report.
CLUE reports contain information about all claims you may have filed in the previous seven years. It can also include a list of claims you opened and never finished, as well as those that were completed and denied. Each insurance company places different emphasis on the data inside a CLUE report, with some counting the number of claims, and others paying attention to the actual cost or the types of claims.
You can request a CLUE report from LexisNexis® online or by calling (866) 312-8076. Thanks to the Fair Credit Reporting Act, you can acquire and review this report free of charge. If you notice any errors, contact the LexisNexis Consumer Center at (888) 497-0011 to begin a review.
Your Credit Report
Your credit report might have nothing to do with your driving or claims history, but insurers care very much about the details inside it. As the National Association of Insurance Commissioners states, credit reports are used by approximately 95 percent of all auto insurers during the underwriting process. Insurers look at information about your payment history, outstanding debts and pursuit of new credit to generate their own ‘insurance score’ and make predictions about your driving behavior and the likelihood of future claims.
There are three major credit bureaus from which insurance companies typically request a credit report. You are entitled to a free copy of your credit report from each bureau once every 12 months. You are encouraged to review the information in that report and check if for accuracy. If you find an error, follow the Federal Trade Commission’s instructions for disputing incorrect information.
Peter Cole, insurance agent and partner at Pentagon Insurance Agency in Elk River, MN, began his career in the industry more than 30 years ago. He prides himself on backing up every sale by personally providing service to his clients and by providing the coverage they need at the best possible price.
Contact Peter to discuss your situation today!