Insurance Background Check Errors

Navigating the complexities of auto and health insurance can be overwhelming—especially when errors in background reports lead to unjust policy denials, sky-high premiums, or reduced coverage. Unfortunately, these background check mistakes are far more common than most people realize.

Understanding how these background checks work, where they go wrong, and what rights you have under the Fair Credit Reporting Act (FCRA) is the first step in protecting yourself — and holding insurance companies accountable when they get it wrong.

Background Checks & Your Insurance Rates

Insurance companies conduct background checks to evaluate your risk profile—which in turn determines whether you’re approved for a policy, how much you’ll pay in premiums, and what level of coverage you’ll receive.

Auto Insurance:

Insurers often pull:

• Driving records
• Traffic violations
• DUI history
• Accident reports
• Claims history

These checks help determine whether you're a “safe driver” or a higher-risk applicant—and that label can directly affect your insurance in several ways. If the report shows past accidents, violations, or other risk factors—even if they're inaccurate—you could end up paying higher premiums. Insurers may also offer you limited coverage or impose restrictive policy terms if you're flagged as high-risk. In more serious cases, you might even be denied coverage altogether or forced into a high-risk insurance pool. Even small errors can have major consequences, so it's crucial to make sure your background and driving records are accurate.

Health Insurance:

Health insurers may review:

• Medical history
• Prescription drug use
• Past claims
• Medical underwriting data

Health insurers may review your medical history, prescription drug use, past claims, and medical underwriting data to predict your future healthcare costs. While this information is used to assess risk, predict your future healthcare costs, and determine coverage options, errors in the data can have serious consequences. If the records are inaccurate, you could be unfairly labeled a high-risk applicant, leading to higher premiums, limited coverage, or even denial of insurance. That's why it's so important to review your health-related reports and correct any mistakes.

Common Errors in Insurance Background Checks

Despite how impactful these checks are, they’re not always accurate. Errors can occur at any stage in the reporting process — and even a small mistake can lead to a denied policy or inflated premium.

Here are the most common issues we see:

Incorrect Information

• Outdated data
• Clerical errors
• Misreported incidents

A traffic violation from another driver, or a prescription you never filled, could mistakenly appear on your report.

Mixed Files

If someone shares your name, birthdate, or similar identifying details, their information can end up on your report. This is especially common in cases involving:

• Common names
• Jr./Sr. designations
• Siblings or relatives with similar data

Sealed or Expunged Records

Certain records—like DUIs or other infractions—may have been sealed or expunged by a court, making them legally off-limits for reporting. But when screening companies use outdated or bulk-purchased datasets, they may still include these records, violating your privacy and your rights under the FCRA.

These kinds of errors can cause real harm—especially if the insurer never tells you the real reason your rate was increased or your application was denied.

Leading Insurance Background Check Companies

Several companies specialize in collecting and reporting background data used by insurance providers. Some of the most prominent include:

• LexisNexis Risk Solutions is heavily involved in auto insurance underwriting, especially through its C.L.U.E. (Comprehensive Loss Underwriting Exchange) reports.. LexisNexis manages information for over 276 million consumer identities and as standard compiles:
  • Driving histories
  • Claims records
  • Behavioral risk profiles

Because of the scale and automation in their systems, errors or outdated data can easily be propagated across multiple insurers. The amount of LexisNexis complaints we receive is so vast,  that we wrote a separate article about them - Read It Here

• Insurance Information Exchange (iiX)
  A division of Verisk Analytics, iiX supplies motor vehicle records and driving histories to auto insurers and employers.
• MIB Group, Inc.
  Formerly the Medical Information Bureau, MIB maintains one of the largest medical data repositories used by health insurers for risk analysis and eligibility screening.
• Milliman IntelliScript
  Specializes in providing prescription drug histories to health insurance companies, frequently used in underwriting decisions.

Your Rights Under the FCRA

As a consumer, you are protected by the Fair Credit Reporting Act, which governs how insurance-related background checks are conducted.

You have the right to:

• Know when a background check was used to make an insurance decision
• Receive a copy of your report
• Dispute any inaccurate, outdated, or unauthorized information
• Have errors corrected within 30 days

Seek damages and attorney’s fees if your rights are violated

What You Can Do If You’ve Been Affected

If you were:

• Denied insurance
• Charged a higher premium
• Given limited coverage …and you suspect a background check was involved, you may have a case.

Our legal team can help you:

• Obtain your report
• Identify inaccuracies
• Dispute bad data
• Pursue compensation under the FCRA

And here’s the best part: thanks to the FCRA’s fee-shifting provision, the companies that violated your rights - not you - pay our legal fees if we win. That means you get top-tier legal help with zero out-of-pocket cost.

Don’t Let a Data Error Define Your Risk

Whether it’s a sealed driving record, a medical issue that isn’t yours, or a prescription history mistake, you deserve to be evaluated fairly and legally.

Contact us today for a free case evaluation. We’ll help you hold background check companies accountable and fight for the coverage and justice you deserve.