How Much Does Your Insurance Company Know About You?

If you’ve applied for homeowner or car insurance lately, you probably learned quite quickly that actually applying for insurance involves answering a lot of questions about yourself.

But lest you are tempted to fudge facts and try to hide driving infractions or previous homeowner claims, you may want to be aware that your insurance company has ways of ferreting out details of your past you’d rather not divulge.

Claims Against Your Home or Auto

Insurers can obtain reports that inform them of previous claims on homeowner or auto insurance policies. The most common way they get this is through the “Comprehensive Loss Underwriting Exchange” or CLUE database, though another company, Verisk, also sells the A-PLUS Loss History Report. “You may not even realize how it affects you,” says Laura Adams, senior insurance analyst for InsuranceQuotes.com. “It sticks with the home and the car.”

Found a home you want to buy? Ask the owner to obtain and share the CLUE report for that home with you. It’s free, and may provide valuable information about previous problems as well as information that can affect your insurance premium, which in turn impacts how much home you can afford. Consumers can request their free CLUE report by calling 1-866-312-8076 or by visiting Personalreports.lexisnexis.com and you can request your A-PLUS consumer report by calling 1-800-627-3487.

Your Driving Record

Speeding tickets? A DUI or DWI? Insurance companies are typically able to get your driving records through state Departments of Motor Vehicles. They will certainly check when you apply but they may also review those records periodically. “They might check them more frequently with a young driver than with an older driver,” says Adams, who notes that an “older driver” often means someone age 25 or older. But if you’ve had traffic violations, be warned: “That may be a red flag and they may start checking it more frequently,” she notes.

In some states, these records include only “at fault” accidents, while in others they may include all accidents, whether you were at fault or not. And, of course, accidents, speeding tickets and other violations may mean higher rates.

The Condition of Your Property

A few years ago, I received a notice from our homeowners insurance company threatening to drop us unless we fixed several items right away. They listed what I thought were some minor issues: a loose flagstone, a downspout that was missing on one side of the house and a small tear in the screened enclosure around the pool. What disturbed me was the realization that someone must have come onto our property — including our backyard — to inspect our property, but I was never aware of their presence.

Homeowners insurance companies may want to inspect your home to note the condition of the property, contents, and to identify possible areas of concern. Sometimes it may involve a quick drive-by, and other times it may be more detailed. Hopefully they will notify you before they do, but if you are applying for this type of insurance you may want to ask.

More recently, our new insurance company inspected our home inside and out. But at least they made an appointment, and that seemed a little less creepy — despite the fact that they now have numerous pictures on file of every room in our home.

Your Credit Scores

In many states, the insurance company will obtain what’s called and “insurance-based credit score,” a customized version of a credit score designed to predict the likeliness you will file a claim. This score is usually used to determine whether you qualify for discounts. While this score may be somewhat different than the one you get when you request your score yourself, it’s still a good idea to get your free credit scores before you apply for insurance to see where you stand.

But rest assured that your insurance agent isn’t looking at the details of your credit report, and she probably has no idea that you didn’t pay your Banana Republic card four years ago. Moreover, the insurance company and/or the agent must, by law, notify you if you did not get the best rate based on information in your credit report. You’ll then be given instructions for getting a free copy of your credit report from the agency that supplied the information used in that decision. And even if you haven’t applied for insurance, you can get your free credit report once a year from all three bureaus.