How to Dispute a Background Check Error That Caused an Insurance Denial

Do you know that your insurance applications come with a side of background screening? Yep. Insurance product screenings are required to weed out potential fraud and lessen unnecessary risks to the insurance company, which makes sense from a business perspective.

But we bet you don’t know that being denied insurance due to a background check can actually mean being denied insurance due to a background check error. What seems like a straight-forward insurance denial based on accurate information can actually be a wildly unfair insurance denial or higher premiums based on false, inaccurate, or misleading information.

The good news? You have FCRA rights, including the right to accuracy, the right to dispute background check errors, and the right to seek compensation if you’ve been harmed.

What is an insurance background check?

An insurance background check is basically an insurance risk profile built with your data (or, what should be your data). It is pulled during the process of auto insurance underwriting or life insurance underwriting and looks at a few key things, like:

• Driving history (including traffic violations, license status, accidents, DUIs, etc.)
• Claims history
• Credit history
• Criminal background
• Identity verification
• Medical history
• Prescription history

How Background Check Errors Lead to Insurance Denials

Yes, insurance companies are in the business of risk, but it’s calculated risk. They aren’t reckless in handing out policies. They won’t, for instance, give a clean policy and the best rates to someone who seems to have a knack for submitting claims on a regular, rolling basis. And they won’t hand over a policy to someone who presents as a potential fraudster or appears to be deceitful.

So when any of the categories of information on your insurance background screening includes wrong negative information, your application gets a red warning flag instead of a green checkmark of approval. When this happens, the insurance application process ends with you being denied coverage due to errors, having limited coverage, or being subject to an insurance premium increase, and none of it is based on you!

Common Background Check Errors That Affect Insurance

Insurance background check errors can show up in all kinds of ways, but these are some of the most common ones:

• Incorrect driving record, including accidents, tickets, and DUIs
• Inaccurate medical history or prescription information
• Incorrect insurance claims history
• Mixed identity files (someone else’s info on your report)
• Outdated information
• Duplicate entries (even accurate info can look like a pattern if it gets reported repeatedly)
• False or misleading criminal history

Companies That Sell Insurance Background Check Reports

“Sell” is an important word here. Because these screening companies aren’t just gathering your data and handing it over to insurance companies out of the goodness of their own corporate hearts. They’re selling your data to insurance companies to make the maximum profit possible. There’s no shame in making money, but the frequency of insurance background check errors suggests that profits may be more important than ensuring accuracy.

Top Background Check Companies for Insurance

• LexisNexis Risk Solution- which produces a number of screening reports for the insurance industry, including the relatively well-known C.L.U.E. report (Comprehensive Loss Underwriting Exchange)
• Milliman Intelliscript
• MIB Group (formerly, Medical Information Bureau)

Your Consumer Rights: How to Fight Insurance Screening Errors

Despite what it may seem like at times, when it comes to insurance background check reports, you aren’t floating alone in a boat in the middle of the ocean. You’re on solid ground, surrounded by a support network and armed with the law.

The Fair Credit Reporting Act (FCRA) is a federal law that gives you the right to:

1. Have an accurate insurance background check, not one riddled with errors
2. Access reports when they’re run on you
3. Dispute errors and have the errors investigated by the background check company within 30 days
4. Get legal help and have it paid for by the background check company because of the FCRA’s fee-shifting provision, which includes the right to sue the background check company and have your attorney fees covered.
5. File for compensation for background check errors that cause financial or other harm. This means there are damages available for things like unfair insurance denials, unfair premiums, and mental and emotional distress.

Does the FCRA apply to background checks? Absolutely! Insurancebackground check reports are just one type of consumer report, all of which fall within the scope of the FCRA. So, in the world of buying and selling your insurance-related data, your consumer rights are very strong and the companies at fault for FCRA violations are held accountable.

How to Dispute Insurance Background Check Errors

The process for disputing errors is multi-step:

• Get a copy of your insurance report and carefully review it
• Identify errors and the types of evidence you have that proves the errors
• Draft strong dispute letters, explaining clearly which data is wrong and why, and which evidence confirms this fact
• Mail the dispute letter and documentation to the dispute address. Each background check company provides information about the location where disputes can be sent. Most of these companies also allow you to file disputes online but sending it certified mail is preferable.
• Contact a lawyer if you want personalized advice, help building and tracking your dispute, and the ability to escalate quickly if your dispute gets ignored or errors remain. Sometimes, you have to sue a background check company to get results.

How Mistake.com Helps Fix Insurance Background Check Errors

We aren’t just a credit or background check repair company; we’re a law firm with a cool name and an even cooler objective- helping our clients fight and fix mistakes in their consumer reports, including insurance reports. Whether you call us background check lawyers, insurance denial lawyers, or consumer protection lawyers, it’s all the same.

Our legal team helps you remove mistakes and move on, by:

• Listening to your story
• Asking the right questions
• Helping you spot and understand errors
• Helping you identify the right documentation for disputing the errors
• Assessing your financial harm and other harms
• Strategizing a plan for recovery if the errors are not fixed through the dispute process

When you work with Mistake.com, we make disputing their mistakes easy for you and hard on them, and it’s free!

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