Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, March 28, 1990 TAG: 9003272155
SECTION: EXTRA PAGE: E-6 EDITION: METRO
SOURCE: DIANE LEVICK THE HARTFORD COURANT
DATELINE: LENGTH: Medium
After all, you really need coverage and want the lowest price. But you may get neither.
Lies and memory lapses are haunting consumers more these days because the insurance industry has a new weapon to get the truth.
Many insurers now are using a computer database to share information on customers' auto claims. The companies use the system to screen some or all applicants for auto insurance.
Few drivers know about the system - the Comprehensive Loss Underwriting Exchange - but it affects an increasing number of motorists.
The information the database turns up that isn't on a customer's application could cause a company to cancel a policy or raise premiums, depending on the company and the nature of the information.
A growing number of companies are joining the computer system or increasing their use of it. The system was created and is operated by Equifax Inc. of Atlanta, which also investigates some applicants for life or health insurance, and reports on consumers' credit.
Companies say the database will save them money and thus help restrain rising insurance premiums.
Database users still search states' motor vehicle records for traffic violations, but many states don't record accidents or their records are incomplete.
The database now has 280 insurance company members owned by 72 insurance groups and representing 60 percent of the U.S. market for personal auto insurance, said Joseph L. Cash, vice president of Equifax's property and casualty industry group.
When a company decides to cancel a policy or raise premiums because of a database report, a customer must be notified about the system, Cash said. The customer can obtain a free copy of his file and challenge it, forcing Equifax to verify information with the company that supplied it. If the company stands by its information, the customer can still enter his own statement into the file, Cash said.
Consumers who haven't been affected by a negative database report can order a copy of their file for $10.
But consumers may not know such reports exist if they haven't been hurt by them, and that troubles some authorities on privacy and civil liberties issues. Insurance applications don't specifically mention the database.
William Olds, executive director of the Connecticut Civil Liberties Union, says the files may contain information that people would want to correct even without being rejected for insurance. He also believes that the $10 fee is unreasonably high and would deter people from getting their files.
Consumers can obtain a copy of their database report by sending a $10 check or money order payable to Equifax to: C.L.U.E., National Consumer Service Center, P.O. Box 105094, Atlanta, Ga. 30348-5094.
by CNB