Do Insurance Companies Share Information With Each Other?

When applying for insurance, a common question is whether insurers share your personal details and claims history with one another. The short answer is yes – insurance companies do exchange certain policyholder information through various databases and reporting services. However, the extent and purpose of this data sharing depends on the type of insurance.

Below we’ll take a comprehensive look at what information is shared between insurers how this data is accessed and used and your rights as a consumer when it comes to insurance information sharing practices.

What Data Do Auto and Home Insurers Share?

For property and casualty insurance policies like auto homeowners and renters. insurers share data in a few key ways

• Specialty consumer reporting agencies – These collect claims data made on insurance policies. They may also compile motor vehicle records and other public data.

• Shared industry databases – Insurers report policyholder details like claims, accidents, underwriting factors, and more into shared systems like CLUE.

• Information requests – When evaluating new applicants, insurers will request policy and claims data from other insurance providers.

Here are some examples of what may be shared between auto and home insurers:

• Claims filed – date, amount paid, type of claim, injuries, etc.

• Policy cancellation or nonrenewal history

• Driver’s license suspensions or traffic violations

• At-fault accidents

• Vandalism or weather-related claims

This data exchange helps insurers accurately evaluate risks, detect potential fraud, and determine fair pricing for policies. While focused on claims history, some broader policy details may also be shared between property and casualty insurers as warranted.

How Life Insurers Use Shared Data

For life insurance, detailed policy and claims data is not shared through third-party reporting agencies as with auto insurance. However, life insurers can and do request health and medical data from other providers when underwriting new applicants.

Information shared may include:

• Prescription drug history

• Lab test results

• Medical diagnosis history

• Doctors’ notes and records

• Family medical history

This data helps life insurers adequately assess the mortality risk of applicants and determine appropriate premium pricing. Access to full medical records gives underwriters a comprehensive picture of an individual’s health.

Your Rights Around Insurance Information Sharing

While insurers do exchange various data, customers have certain rights when it comes to the sharing of their personal information:

• Review consumer reports – You can request copies of specialty reports like CLUE auto histories to review for accuracy.

• Dispute errors – If you find incorrect or incomplete shared data, you can dispute it with the reporting agency, who must then investigate and correct confirmed errors.

• Opt out of pre-screening – You can opt out of life insurers accessing your medical data for pre-approval offers. However, this may limit policy options.

• Selectively authorize access – Insurers need your active consent to access full medical records. You can decline but it may impact pricing.

• Limit sharing – Inform agents you only authorize the sharing of strictly necessary data required for underwriting.

While insurers do exchange various customer information, being aware of your rights helps you control the process.

Details on Auto and Home Insurance Data Sharing

For auto and homeowners insurance, specialty consumer reporting agencies (CRAs) are the primary method for insurers to exchange policyholder claims data.

The largest CRA is LexisNexis Risk Solutions, which produces CLUE auto insurance reports. Here are some details included in a CLUE report:

• At-fault accidents – dates, payout amounts, injuries or fatalities, property damage, etc.

• Comprehensive claims – vandalism, weather events, animal collisions, etc.

• Policy lapse or nonrenewal history

• Driver’s license suspensions

• Traffic violations

• Claims filed – date, amount paid, claim type, etc.

Insurers may access CLUE reports when evaluating new applicants or renewing policies. Consumers can request their complimentary annual CLUE report to verify accuracy.

Other CRAs like ISO ClaimSearch also produce similar specialty reports for property and casualty insurers using aggregated industry data.

How Life Insurers Exchange Medical Information

While not tracked in credit-report-like specialty reports, life insurers exchange relevant medical data during underwriting in a few ways:

• MIB Group database – Contains lab results, diagnoses, prescription history, and more that life insurers can access with authorization.

• Information release forms – Applicants sign these to authorize sharing of records between insurers and medical providers.

• Attending Physician Statements – Doctors complete these detailing the patient’s health background for the insurer.

• Motor vehicle reports – Driving records may be checked as they can indicate mortality risks.

This data sharing helps life insurers thoroughly evaluate applicants and classify policies based on health risks. It is a standard and regulated part of underwriting life, disability, and long-term care policies requiring health details.

The Purpose Behind Insurance Information Sharing

While this exchange of customer data may seem intrusive, there are legitimate purposes behind the practice:

• Accurate risk assessment – Comprehensive data ensures applicants are classified and priced correctly based on risk factors. This protects insurers financially.

• Fraud prevention – Identifying inconsistencies between policies and claims helps insurers detect potential fraud.

• Streamlined underwriting – Data sharing cuts down on paperwork and speeds up the application process for customers.

• Industry trends – Aggregated data helps insurers analyze loss patterns and refine policy pricing.

So ultimately, the responsible sharing of policyholder information enables a healthier insurance system. But consumers should still understand what is shared and exercise privacy rights when needed.

Tips for Insurance Customers

While information sharing provides benefits for insurers, here are some tips for consumers regarding the practice:

• Review specialty reports annually and dispute any inaccurate information immediately.

• Only authorize the sharing of strictly required medical data – do not just allow full access to all records.

• If declining full medical access, request alternatives like providing specific records only.

• Opt out of pre-screening if uncomfortable with life insurers accessing your health data.

• Weigh privacy preferences against potential savings when enhanced policies require deeper access.

Exercising caution around insurance data sharing helps protect your interests as a policyholder.

The Bottom Line

While insurers do share certain customer information through reports, databases, and requests, consumers have protections around the practice. Being aware of what is shared and selectively authorizing access are critical for balancing privacy and insurance needs. With prudent monitoring, policyholders can ensure responsible data exchange works for them.