Scoring a CLUE report might help you avoid nasty surprises with your homeowners coverage.
The majority of homeowners do not have a clue when it comes to the insurance industry database known as CLUE, despite the fact that this computerized tracking system can significantly impact their insurance premiums. If your property becomes red flagged within the system, for example, you may see your rates skyrocket for no apparent reason.
What is CLUE?
The Comprehensive Loss Underwriting Exchange is essentially a vast computer database that keeps track of insurance claims for properties all over the United States. Insurance companies who pay a fee to subscribe to CLUE are provided with up-to-date reports related to information about damage to properties or insurance claims to pay for repairs. Those insurers can then use that data to help them make decisions about who to insure, how much to charge for insurance, and so forth. CLUE also offers similar services to track auto insurance information.
Your Home’s Track Record
In a way, CLUE is kind of like a credit reporting agency. Each of us has a credit history, or should, and credit bureaus keep track of that history by filling our confidential files with information pertaining to things like income, our ability to repay loans on time, and how much debt we carry. When you apply for credit the lender will analyze your credit report and decide whether or not to lend to you. Similarly, insurance companies rely on CLUE to help them manage their risks when issuing homeowner’s or auto insurance policies. There are no laws that prohibit this kind of reporting and it is perfectly legal for insurers to use the data for underwriting or rating purposes.
What’s in a CLUE Property Report
Your home’s CLUE report will contain information like the name on your homeowner’s policy and a description of the home that’s insured. Beyond that basic data, however, it also shows claim information. If you filed a claim after a tree fell on your house during a hurricane, for instance, the CLUE report will probably show the date you filed your claim and how much the insurance company paid you to cover your losses. CLUE maintains those kinds of records for up to seven years. The insurance company will check your CLUE report when you apply for insurance and if they find you have multiple expensive claims, they may be reluctant to insure your home or even raise your premiums.
About 10 years ago, when the use of CLUE was gaining widespread acceptance and popularity within the insurance industry, several news outlets reported on some of the more harrowing CLUE-related homeowner experiences. One couple said they bought a home, for example, and two months later their homeowner’s insurance premiums rose by more than $200. The insurance company explained that, three years prior to purchasing the property, there was a claim against it, and based on that claim the premium had been adjusted upward. Before long, the insurance company dumped them and cancelled the policy.
Negative Impact Even without Filing Claims
Other consumers said they wound up in the database even though they never filed a claim. Some homeowners told their insurance agents that there was damage to their home after vandalism or an accident, but that they were going to pay for the repairs out of pocket instead of filing an official claim. Just because they shared that information with the insurer, however, the damage report went into their CLUE report. One homeowner said that after he paid for flood damage himself – but told his insurance company about the incident – they cancelled his policy. That was despite the fact that he never filed a claim in 30 years as a loyal customer.
Access to Your CLUE Report
The bottom line is that if you own a home, it’s a good idea to obtain a copy of your CLUE report and scan it for errors that could impact your insurance. If you are planning to buy a home, you may want to ask the seller to show you a copy of a recent CLUE report, just to make sure you aren’t buying a property that could have exceptionally high insurance costs. CLUE reports are, incidentally, protected by the Fair Credit Reporting Act and can only be accessed by the owner or lender for the property.
To receive your report, call toll free at 1-866-312-8076 or visit the website personalreports.lexisnexis.com, and request it. Should you discover any mistakes or discrepancies, you can report them directly to LexisNexis – the company that now operates CLUE. They will be obligated to get in touch with your insurance company, investigate your complaint, and notify you of the results of their inquiry within 30 days. You also have the right to submit an explanation in writing – basically telling your side of the story – so that LexisNexis can include that statement in future CLUE reports.