Insurance adjusters have a wide variety of tools available to them to make the process of settling claims an easy and smooth process. However, one of the most underutilized options are claims reports. But what are they and how can adjusters utilize this data?
What is a Claims Report?
In order to understand how you can utilize this information, it is important to first understand what it is. Typically, there are two types of reports adjusters use: CLUE reports and ISO reports.
Similar to a credit report you might order, a CLUE (Comprehensive Loss Underwriting Exchange) report is a document that features consumer claims information for the past seven years. Generally, the information is specific to personal auto and personal property losses associated with a particular individual. It does not contain any credit or financial information—only the details of the claim. The Lexis-Nexis group is responsible for gathering the information and compiling the report based on data from insurance carriers.
ISO Claims Services is a program run by Verisk Analytics. Similar to CLUE, the report contains detailed information about past claims that insurers can use to analyze risk and evaluate new situations. The biggest difference with an ISO report is that it provides much more data—including information on third parties who have received payments from insurers as part of claims in the past.
#1: Detecting Insurance Fraud Amongst Insureds and Claimants
Insurance fraud is usually easy to detect if you have a copy of an individual’s CLUE report or an ISO report. Why? The information gathered in this type of report includes any claims a person has had over the last seven years.
One telltale indicator of a fraud is seeing several claims on the report matching a similar description. For example, an insured may call in an incident where he or she is hit from behind and the other car flees the scene. They will then report the same scenario happening weeks, months, or even a year or two after the initial incident as a new claim—usually after the person has switched to a new insurance carrier. Injuries, care providers, and vehicle damage may even be identical in each situation.
In fact, many large insurance fraud rings across the country have been stopped thanks to claims adjusters who took the time to review an ISO or CLUE report before continuing on with a case.
#2: Finding Out About Existing Damage
As an insurance adjuster, another way you can utilize claims reports is to find out about any existing damage on a vehicle or property.
Often, a physical damage adjuster will notice something during their inspection that points to damage happening prior to the reported incident. In this circumstance, using an ISO or CLUE report to see if something was reported in the past is a good way to tell whether the damage is actually new or was incurred during a previous claim.
In some cases, adjusters are even able to see claims reports that happened before the insured purchased the vehicle or property. This is usually more common in terms of homes and other buildings than with automobiles, but these reports can indicate whether a vehicle has had significant comprehensive damage or been considered a total loss at any time in the past.
#3: Discovering More Information About a Third Party
Most insurance adjusters will encounter situations in their careers where a claimant or insured just won’t provide complete information or is incredibly difficult to get in touch with.
This is where utilizing claims reports can help. Often, if you have just a bit of information about a party, you can look up these specific reports to find out more information. In some cases, this can mean the difference between getting facts of a loss and not being able to discern anything at all.
#4: Catching Medical Claims Fraud
While we like to think that most medical practitioners are honest, statistics show that fraud is a big business amongst doctors and other healthcare providers. Another way that adjusters can utilize claims reports is by looking to see the types of payouts made to a particular medical practice in the past.
Why is this relevant? For certain practitioners that prey upon victims of car accidents or job related injuries, over charging for services or billing for treatments that never occurred is often common—costing insurers millions of dollars each year. If a claims adjuster notices a trend when he or she looks at a claims report, they can often spot this type of scheme and help put it to rest by contacting their special investigation unit (SIU), who then puts together a report for local authorities.
#5: To Help Underwriters Determine Risk
Another great way claims adjusters can utilize CLUE and ISO reports is to help the underwriting team effectively assess risk. If an insured appears to have much more going on than your company seems to know about—such as using a vehicle for business use on a regular basis or more claims than they initially let on when applying for coverage—forwarding the data to underwriting is a good way to make sure your firm is accurately rating for that policyholder’s individual risk.
While these two types of reports are both great tools to use while working on a claim, they aren’t the only think you should use if you need more information or simply feel there are multiple fraud indicators. Talk with your supervisor or claims manager to find out what other tools your department utilizes to make the claims process much smoother.