Mistakes on insurance reports lead to massive price increases

Channel 2 Investigates team examines use of CLUE reports

By Lauren Sweeney, Robert Arnold - Investigative Reporter

HOUSTON - In late April, Gwendolyn Jones starting shopping for a better rate on her auto insurance. When the first company she called came back with a higher premium than expected, Jones knew something was wrong.

"They said, 'You have an accident.' I said, 'Where?' They said, 'Mississippi. You have a Cadillac.' I said, 'I've never owned a Cadillac,'" Jones said.

Jones is a lifelong resident of Angleton and said she'd never even been to Mississippi.

State Farm had the accident listed with Jones' driver's license number, but she hadn't been insured with State Farm in decades.

When Jones called State Farm's claims department, she discovered the accident should have actually been on the record of another Gwen Jones, whose address was in Dallas.

"She lives in Dallas; I live in Angleton. We have the same birth date, the same name but our middle initial is different," said Jones.

The mistake, it turned out, was on a report from a database used by the insurance industry to determine claims history called the Comprehensive Loss Underwriting Exchange.

The database contains information on more than 300 million consumers and provides up to seven years of automobile loss history, according to LexisNexis the company that maintains C.L.U.E.

All that data helps auto and property insurance companies determine a customer's prior claim history within minutes.

A spokesperson for LexisNexis told Channel 2 Investigates via email that errors in reports are infrequent, and it only receives about five disputes per 10,000 customers.

But according to the consumer group Privacy Rights Clearinghouse, the existence of CLUE reports are unknown to many consumers, and errors are only discovered when someone is either turned down for insurance or asked to pay a much higher premium.

The Texas Department of Insurance has received 99 complaints from consumers concerned about errors and inaccuracies on CLUE reports in the past two years, according to records requested by Channel 2 Investigates.

A common complaint to TDI is that CLUE shows a driver incorrectly at fault. Other complaints show claims not being properly closed, resulting in a consumer not being able to get insurance on a property, and one complaint even details the presence of a claim for a changed tire.

"A consumer will have had some sort of adverse decision from an insurance policy. They find the premium was higher than they thought it would be, they ask, 'Why?' and they say, 'Well, we checked your CLUE and we see a certain number of claims or frequency of claims,'" said Jerry Hagins, a spokesperson for TDI.

Take Adam Gottlieb's complaint, for example. Gottlieb was involved in a minor fender-bender in the past year, resulting in around $500 of damage.

However, his insurance company somehow had record that the vehicle had been totaled and sent him a letter wanting to know why he was still carrying insurance on it.

"To them, the vehicle is totaled, but to me it's obviously still very drivable," Gottlieb said while standing in front of the vehicle in question.

He said the insurance company wanted to raise his premium by about $200 every six months as a result of the mix-up. He ended up switching insurance carriers.

Neither Gottlieb nor Jones had ever heard of CLUE reports prior to these issues. Both have yet to receive a copy of their reports.

However, TDI got in touch with Gottlieb's insurance company and received information back that the error and CLUE report had been corrected.

Jones was able to receive a letter of experience from her insurance company to show that she was not involved in the accident in Mississippi before purchasing a new policy.

LexisNexis said errors can be corrected if they are brought to the company's attention, and information is verified through insurance companies.

By law, consumers are entitled to a free copy of their CLUE reports for both auto and property insurance.

LexisNexis provides detailed instructions on how to request those reports online, by mail or by phone. A LexisNexis login is required to get the reports online.

Consumers who have issues with resolving any dispute with an insurance company can call TDI's complaint line at 800-252-3439 or use their online complaint form.

Watch Robert Arnold's tutorial of how to request a CLUE report and correct errors.

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