Do Insurance Companies Share Information With Each Other?

When getting quotes or filing claims with auto, home, or life insurers, a common question is – can they see your history with other providers? Do insurance companies share details on your past claims, policies, and premiums?

The short answer is yes, insurers do share certain policyholder information with each other. However, the extent of what they share and how it’s used varies between types of insurance.

Below we’ll provide an in-depth look at what types of data is shared between insurers, how it impacts you as a consumer, and your rights around the sharing of your personal information.

What Information Do Auto and Home Insurers Share?

For property and casualty insurance like auto, homeowners, and renters, insurers share details through:

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

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

• Information requests – Insurers will request policy and claims data from other providers when assessing new applicants.

Here are some examples of what may be shared:

• Claims filed – date, amount paid, type of claim, etc.
• Policy lapse or cancellation history
• Driver’s license suspensions or violations

This data helps insurers evaluate risk, detect potential fraud, and determine pricing. While largely claims-focused, some broader policy details may also be shared.

How Life Insurers Use Shared Information

For life insurance, detailed policy and claims data is not shared through reporting agencies as with P&C insurance. However, life insurers can and do request health and lifestyle data from other providers when evaluating applicants.

Shared information may include:

• Prescription drug history
• Lab test results
• Medical diagnosis history
• Family medical history

This helps life insurers assess the mortality risk of applicants and determine appropriate pricing. Access to full medical files provides a comprehensive picture of health.

Your Rights Around Insurance Information Sharing

While insurers do share various data, there are consumer rights and protections around the practice:

• Review reports – You can request copies of specialty consumer reports like CLUE auto histories on an annual basis.

• Dispute errors – If errors are found in shared data, you can dispute them directly with the reporting agency. They must investigate and correct confirmed errors.

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

• Authorize full access – Insurers need consent to access full medical records. You can decline but may not qualify for preferred pricing.

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

While insurers do exchange various data, being aware of what is shared and asserting your privacy rights can help you control the process.

Specific Details on Auto and Home Insurance Information Sharing

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

The largest such CRA is LexisNexis Risk Solutions through their CLUE auto insurance reports. Here is what is contained in a CLUE report:

• At-fault accidents and claims filed – dates, amounts paid, injuries, etc.

• Comprehensive claims – vandalism, weather events, animal collisions

• Policy lapse history

• Driver’s license suspensions

• Traffic violations

Insurers may access CLUE reports when assessing new applicants or renewing policies. Consumers can request their free annual CLUE report to review for accuracy.

Other CRAs like ISO ClaimSearch also compile similar specialty reports for property and casualty insurers. ISO aggregates industry data on losses reported by insurers into a centralized system.

Insurers may also directly request 5-7 years of historical claims data from other auto or homeowners insurance providers on new applicants. This paints a full picture of loss run history.

How Life Insurers Share Medical and Lifestyle Information

While not tracked in credit-report-like specialty reports, life insurers do exchange relevant health and medical data during the underwriting process in various ways:

• MIB Group database – Medical lab results, diagnoses, prescription drug history, and more are stored in this industry database that life insurers can access.

• Information release forms – Applicants sign these forms authorizing insurers to request medical records from doctors, hospitals, pharmacies, and other providers.

• Attending Physician Statements – Doctors complete these statements detailing the patient’s health history and submit them to the insurer.

• Motor vehicle reports – Driving records and violations may be requested as they can impact mortality risk.

All this data helps life insurers thoroughly evaluate applicants and classify risk levels. While strictly regulated, sharing of medical histories is an accepted practice in underwriting life, disability, and long-term care policies requiring detailed health knowledge.

The Purpose of Insurance Information Sharing

While this information sharing between insurers may seem intrusive, there are legitimate purposes behind the practice:

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

Fraud prevention – Inconsistencies between policies and claims at different insurers help identify potential fraud.

Faster underwriting – Data sharing reduces paperwork for applicants and streamlines the application process.

Industry loss metrics – Aggregated data helps insurers model loss trends and refine risk rating.

So the sharing ultimately helps promote a healthier and sustainable insurance system. But consumers should still be aware of what is shared and exercise their privacy rights when warranted.

Tips for Consumers on Insurance Information Sharing

While information sharing has upside for insurers, here are some tips for consumers around the practice:

• Review your specialty reports annually for accuracy. Dispute any errors immediately.

• Ask agents what data will be shared and only authorize what is absolutely necessary.

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

• Opt out of pre-screening offers if uncomfortable with medical data sharing.

• Weigh risk tolerance and privacy preferences when choosing enhanced policies requiring deeper access.

• Be cautious of simply allowing open access to all past medical history via broad authorization forms.

Exercising prudence around insurance data sharing will help protect your interests as a consumer.

The Bottom Line

While insurers do share certain policyholder information through various databases, reports, and direct requests, consumers have protections around the practice. Being aware of what is shared, reviewing for accuracy, and selectively authorizing access are keys to balancing privacy and your insurance needs. With some due diligence, insurance customers can make sure data sharing works for rather than against them.