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Loss history reports - CLUE and APLUS
Why do insurance companies need to know my loss history or the loss history of my property?
Insurance companies conduct a risk assessment of each applicant and property requesting coverage. The risk assessment tells a company whether the risk presented by the applicant or property is acceptable to them based upon the company's underwriting guidelines and if acceptable what the premium should be for the risk presented. The guidelines and premiums charged are based generally upon historical statistical data. Statistically it has been documented over time that individuals that have losses tend to have more losses. Therefore, knowing the previous loss history of the applicant and property helps the company in determining the level of risk presented and the appropriate amount of premium to charge for that risk.
Does North Dakota law allow companies to use my loss history information?
Yes. It is generally recognized that insurance companies have a need to know about your previous loss history for underwriting and rating purposes. However, the law does restrict or prohibit the use by companies of some specific loss history information.
Does my loss history have any impact on my ability to get insurance? Or what I pay for insurance?
Yes. While all companies do not have the same underwriting guidelines or rating systems, generally most companies today consider your loss history in determining whether to offer you insurance or not, and in determining how much premium to charge you. Knowing the type and frequency of losses you have had is a part of their risk assessment of you.
How can an insurance company determine my loss history or the loss history of my property?
Insurance companies use several methods to gather your loss history:
How do I know if an insurance company is going to use my loss history information?
- All companies ask for your loss history information when making application.
- Some companies may ask you to have your previous carrier send them your previous loss history.
- Some companies may request that an investigative consumer report be done to obtain your background history.
- Most companies will request a search of industry loss history databases for information of previous claims or losses.
North Dakota law requires that a company inform you at the time of application that they will consider your loss history in determining whether to decline, cancel, non renew or surcharge a policy.
Does the law regarding personal insurance loss history information apply to all types insurance?
No. The law is specifically limited to "personal insurance," which is defined to mean private passenger automobile, homeowner, motorcycle, mobile homeowner and owner occupied dwelling fire policies.
What types of events do the law restrict or prohibit the companies from using?
Companies may not consider the following for purposes of surcharging, declining, non renewing or canceling personal insurance or a binder for personal insurance:
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- An inquiry to your company about the level of coverage or whether a policy will cover a loss
- An inquiry to your company regarding coverage for a loss if you never file a claim
- A claim if the company does not investigate the claim or does not initiate any other claim activity (unless the claim involves deceptive practices by you)
- A claim if the company does not make a payment to you or on your behalf (unless the claim involves deceptive practices by you)
- A first party property claim caused by wind or hail if you have not had any other wind or hail claims in the past five years (unless the company can show that you failed to maintain the property and the failure contributed to the loss). Note: if you have had more than one wind or hail claim in the past five years, the company can use the second and third claims, etc.
- Any claim that is more than 10 years old (unless the company can show that you failed to maintain the property and the failure contributed to the loss)
What is a CLUE report?
CLUE report stands for Comprehensive Loss Underwriting Experience. This is the acronym associated with the loss history database managed by Choicepoint. Another common loss history database used by companies is known as A Plus and is managed by the Insurance Services Office. The CLUE report is a loss history report. This report will show all losses (claims) made by you (by social security number), made on a specific vehicle (by Vehicle Identification Number) or made on a specific property (by address).
What rights do I have if I feel the information in the CLUE report is not correct?
Under the federal Fair Credit Reporting Act you are responsible for contacting the database manager of a contested loss history. You must then contact the company that made the erroneous entry and request that they have it corrected in the database. Once the correction is done, you may request the insurance company to reconsider your application.
Who is responsible for correcting any errors in my loss history report?
You must get the insurance company that provided the incorrect information to the loss history database to correct the entry.
Can I be penalized for the loss history of the previous owner of the home I am planning to buy?
Maybe. The law strictly prohibits a company from using the previous owner's loss history on a property as the sole reason for declining to write a policy but does allow the company to refuse to insure if it can show the previous owner did not repair the damage. In addition, if the company has other legitimate underwriting factors in addition to the loss history that support the declination they may then do so.
If I am purchasing a new home and make application to my company for coverage, how long does the company have to decide whether they will provide coverage or not?
North Dakota law allows companies 60 days to underwrite a risk. If a company finds within the 60 days that the risk does not met their underwriting eligibility criteria, it may terminate the policy and/or binder. If you are contemplating the purchase of a new home it is extremely important that you involve your agent as soon in the process as you can to avoid any unexpected problems with the insurance company providing coverage due to issues that may be discovered upon receipt of a loss history report.
Do insurance companies use weather-related loss history information in underwriting or rating?
Generally, companies use your previous loss history information in underwriting or rating your policy, including losses related to weather such as wind and hail. However, there are some provisions in state law which limit the use of this type of loss information in certain circumstances.
For example, companies can not use the first wind/hail loss in the previous five years to underwrite or rate auto and homeowners policies, but may use subsequent losses within the five-year period.
In addition, the law prohibits companies from surcharging your auto policy based upon a comprehensive loss of any kind. This restriction is specific to surcharging but does not prevent them from non renewing your account based on this information subject to the five-year rule for wind/hail losses.
Do insurance companies use automobile "no fault" losses in underwriting or rating my auto policy?
"No fault" coverage on your auto policy pays for accidental injury you might sustain in your moving auto regardless of who is at fault. Some companies do count a "no fault" claim payment as a loss on your account if it reaches a certain dollar threshold.
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How do I go about getting a copy of my loss history report (CLUE report or A-PLUS report)?
For a CLUE report, contact Choicepoint. Click here to access the site.
A-PLUS provides a report for both home and auto. If you have been declined insurance because of information contained on an A-PLUS report or for copies of the report, please use the contact information below:
- 1-800-709-8842--This number was established for A-PLUS customer use. The number should be reported on all declination letters to consumers when an A-PLUS member insurance company has performed searches on the A-PLUS databases and as a result made considerations not to write new or renewal insurance coverage for a consumer.
- 1-800-627-3487--This number was established in compliance with the FACT Act (FACTA) that became effective Dec. 1, 2004. A consumer may call this number to request a free copy of their A-PLUS auto or property loss history report. This number is also published on the ISO website.
- Consumers may also contact A-PLUS to request a loss history report by writing to:
A-PLUS Consumer Inquiry Center
545 Washington Boulevard 22-6
Jersey City, NJ 07310
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