Denied Insurance or Hit with a Higher Premium?

What To Do After an Insurance Denial or Premium Increase

Getting a rejection letter from an insurance company, or renewing your policy only to find your premium jumped for no clear reason, is confusing and frustrating. You might assume it's just the cost of insurance going up everywhere, or that something you did caused it. But insurers don't set your rate or make coverage decisions based on guesswork. They pull a consumer report, often one you've never seen, and that report isn't always accurate.

These reports compile data such as your claims history, driving record, and credit-based insurance score, from sources you may never have interacted with directly. Because so much of this process is automated, errors can easily happen. If an insurance report error played any role in your denial or your premium increase, federal law gives you the right to see what's on that report and the right to fix it.

Why Was I Denied Insurance or Charged a Higher Premium?

AUTO INSURANCE REPORTS

Most reporting-related denials and rate increases we handle involve auto insurance, and they generally trace back to one of three sources:

• Credit-based Insurance Scores: Many auto insurers use a credit-based score, separate from your ordinary credit score, to help predict the likelihood and cost of future claims. Some states restrict or prohibit the use of credit-based insurance scores.

• Claims History Through LexisNexis: Most auto insurers review your LexisNexis C.L.U.E. (Comprehensive Loss Underwriting Exchange) report, which generally contains up to seven years of auto and property insurance claims history. Previous claims can affect both eligibility and premiums, and LexisNexis is, by a wide margin, the reporting agency most often involved in the insurance report disputes we handle.

• Driving Record: Traffic violations, at-fault accidents, license suspensions, and other driving history can all influence auto insurance rates and coverage decisions.

LIFE AND HEALTH INSURANCE REPORTS

Life and health insurance underwriting also relies on reporting agencies, although we deal with these claims less often:

• MIB Group: Life insurers, and some insurers offering individually underwritten health, disability, or long-term care policies, may review information maintained by MIB Group, a nationwide consumer reporting agency that contains information reported during previous insurance applications and underwriting.

• Milliman: Some life and health insurers also rely on reports and risk assessments prepared by Milliman as part of underwriting. Milliman-related disputes come up far less often than LexisNexis auto disputes, but the same FCRA rights apply if a Milliman report contains inaccurate information.

OTHER FACTORS

Beyond the specific reporting agency involved, a few other factors can affect the outcome regardless of policy type:

• Incomplete Applications: Missing information or inconsistencies between your application and third-party data can delay or derail approval.

• Reporting Errors: . Misattributed claims, mixed credit files, outdated information, or identity theft accounts can all inflate your perceived risk and cost you coverage or a good rate.

The only way to know which of these applies to you is to ask the insurer directly which report was used, request a copy, and review it before assuming the price or the denial is final.

What Should Have Happened Before You Were Denied or Charged More

1. You Should Have Received an Adverse Action Notice

Under the Fair Credit Reporting Act, if an insurer denies your application, charges you a higher premium, offers less favorable terms, or declines to renew your policy because of information in a consumer report, it must notify you in writing.  

2. You Should Have Been Told Which Company Prepared the Report

Whether the report came from LexisNexis, MIB Group, Milliman, or another consumer reporting agency, the notice should include that company's name so you can request a free copy.

3. You Should Have Been Told You Could Dispute It

You have the right to request a free copy of the report within 60 days of the adverse action and to dispute anything that isn't accurate.

4. The Agency Must Investigate Your Dispute

Once you dispute an error, the consumer reporting agency generally must investigate within 30 days and correct or remove information it cannot verify.

If you were denied insurance, charged a higher premium, or had your policy renewal declined, and were never told which report was used or never given a chance to see it, something may have gone wrong in the process itself.

What to Do After an Insurance Denial or Rate Increase: Step-by-Step

1. ASK THE INSURER DIRECTLY

‍Request the specific reason for the denial or the increase and ask which consumer reporting agency supplied the report.

2. REQUEST YOUR REPORTS

You're entitled to a free copy of your LexisNexis C.L.U.E. report once a year. You can complete the form here to request yours. You can also request free credit reports from the three nationwide bureaus at AnnualCreditReport.com.

Read the reports line by line and look for:

• Claims that aren't yours, or that belong to someone else.

• Duplicate entries for the same claim or incident

• Claims that should have aged off after the reporting period

• Coverage inquiries mistakenly logged as filed claims

• Credit accounts affected by identity theft or mixed files

3. DISPUTE ANYTHING INACCURATE

Send a written dispute to the agency that issued the report and keep copies of everything you submit.

What To Do If You Find a Mistake on Your Insurance Report

If an insurer used a consumer report to deny your application, raise your premium, or decline to renew your policy, the Fair Credit Reporting Act gives you important rights, including the right to:

• Be told which consumer reporting agency supplied the report

• Request a free copy of that report

• Dispute inaccurate information and have it investigated

• Have corrected information reflected going forward

• Seek compensation if the consumer reporting agency or the insurer violated the FCRA

These errors aren't rare, and they can follow you for years since claims history reports typically cover seven years of data. If an error cost you affordable coverage, you don't have to simply accept it. Federal law gives you a way to correct the information and, in some situations, hold the responsible company accountable.

Will This Affect My Next Policy or Renewal?

If your denial or rate increase had nothing to do with a reporting error, shopping with a different insurer may still get you a better result. But if inaccurate information is sitting in a C.L.U.E. report, an MIB file, or your credit report, that same error will likely follow you to the next insurer, and the one after that, until it's corrected.

Because claims history reports can carry information for roughly seven years, an uncorrected error doesn't just cost you one renewal. It can quietly inflate your premiums year after year without you ever knowing why.

When Should You Talk to an Insurance Report Error Lawyer?

Not every rate increase or denial involves a legal claim. Sometimes the report is accurate and the pricing reflects real risk. Other times, the report contains real errors that are costing you money or coverage you're entitled to.

It may be worth speaking with an attorney if:

• Your insurance report contains claims, credit, accident, or other data that is inaccurate or doesn't belong to you.

• You disputed an error, but the reporting agency refused to correct it or claimed the information was "verified."

• The error caused you to lose coverage, pay a higher premium, or accept worse terms than you should have.

Get Free Help with Your Insurance Reporting Issue

At Mistake.com, you don't have to know whether you have a legal case before reaching out. We'll review your insurance report and adverse action notice (if you got one), examine the errors you've spotted, and talk about the evidence you'll need. If it looks like your rights were violated, we'll walk you through your options, answer your questions, and explain what the next steps could look like.  

Your consultation is always free, and if we take your case, you won't pay out-of-pocket or upfront fees because the Fair Credit Reporting Act makes the insurance background check company pay.

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