Find out all about the Claims and Underwriting Exchange database (Cue) and how it could impact on your search for car insurance.
There has been some concern within the insurance industry that the Cue database is now being used for purposes that were never intended
No-one wants to be held in a queue, but when it comes to insurance the chances are that you - or at least your personal information - are held in Cue.
It stands for the Claims and Underwriting Exchange (Cue) which is an enormous database of 'incidents' reported to insurance companies.
Exactly what comprises an incident is a little harder to define. It will certainly include car accidents, break-ins and thefts from homes, or a substantial personal injury you may have suffered.
But it may also include what you might imagine to be very minor motoring stuff, such as a damaged indicator light.
You may have no intention of making a claim over such a matter - perhaps you don't want to affect your no-claims bonus, or the cost is below your excess figure - but you could discover that, once your insurer gets to know about it, it gets logged on Cue.
That could prove significant, as will be explained, but firstly a bit more data about the database.
Cue is managed by a not-for-profit company, Insurance Database Services Limited (IDSL), on behalf of its member organisations. These include most insurance companies as well as some local authorities and transport companies.
It was created in 1994 as a measure to prevent fraudulent or multiple insurance claims, and as of November 2013 it holds a significant history of over 32 million recorded claims.
When this article was researched (November 2013), 60 insurance companies and 39 other organisations were members of Cue and benefited from the knowledge that flows between them.
Data protection laws allow members of the public to view the information held on them, but you'll need to pay £10 for the privilege through a data access request.†
Insurers could be using Cue to calculate premium renewals on the basis of 'incidents' that the customer is obliged to report, even though they could be very minor
IDSL insist that the information held about someone will not be anything more than facts they've disclosed themselves, or relevant information relating to an incident or claim.
They add: "The information contained in the database will comprise that supplied by the policyholder or claimant on their application or claim form, together with other information relating to the incident or claim.
"It does not hold sensitive information or details relating to the amount of premium paid."
However, there has been some concern within the insurance industry that the Cue database is now being used for purposes that were never intended.
Instead of being merely a store of information to check against the possibility of a fraudulent claim, it could be used as a tool to help the insurer determine the price of a premium.
Lee Griffin, chief operating officer at Gocompare.com and a former business data manager, said: "There has been something of a change in how the database is now being used. It was meant purely to help insurers exchange claim information.
"If a customer made a claim, then the insurer would check against the database to make sure that previous information disclosed by the customer was correct.
"It meant that if something had not been disclosed, then the insurer would not pay out on the current claim.
"In some instances for the customer, there could be a genuine mistake which proved costly. The ombudsman looked at this and pointed out the unfairness.
"In recent times, though, there has been a move from just using the database at point of claim to using it at point of sale, or even at the point of quote."
This means that insurers could be using Cue to calculate premium renewals on the basis of 'incidents' that the customer is obliged to report, even though they could be very minor.
The Insurance Industry Access to Driver Data (IIADD), branded as MyLicence, gives insurers access to information held by the DVLA
So, if someone walking past your car at night decides to kick your headlight in, then this is an incident regardless of whether or not you intend to make a claim.
In theory, it should be disclosed to your insurance company who then add it to the database.
The upshot is that a reported minor 'incident' could result in a higher premium or quote - not just from your current insurer, but from all those using the database.
"Insurance is about risk," said Griffin. "The premium is calculated on the risk of the driver having to make a claim.
"Insurers aren't interested in whether or not you've made claims. They're only concerned about whether you've been involved in an incident."
The good news for the consumer is that a new database could result in fewer rejected claims on the grounds of wrongly disclosed information, and even some overall policy savings.
The Insurance Industry Access to Driver Data (IIADD), branded as MyLicence, gives insurers access to information held by the DVLA. It tells them what type of licence a customer holds, how long they've held it, and whether they have any driving convictions.
If and when the database is fully taken up by the industry, an insurer won't need to ask you what convictions you've had. They can just check the database and know.
On the one hand IIADD is seen as a fraud prevention measure, but also something that benefits the consumer because they'll no longer need to remember and recall all their driving details.
It's the first time a government database has been made accessible to a non-governmental group in the form of the insurance industry. It has also been estimated by the Association of British Insurers† that it will save an average customer £15 on the cost of their car insurance.
In the future it's hoped to bring Cue and the new database (IIADD) together to effectively create one huge database.
It's hoped that this could be open-ended, a portal that customers could access as easily as the insurers.
But, for the time being, if you do find your renewal premium rising as a result of a minor incident recorded on Cue, then you may still want to think about comparing prices across a range of insurance companies through a site such as Gocompare.com.
"Some insurers might be less concerned that you have suffered two attempted break-ins to your car than others," said Griffin. "That's why we say shop around and find the best deal."