Your
CLUE Insurance Report Matters
Your
CLUE insurance report keeps your homeowners insurance claims alive for seven
years—and that could cost you on your premiums.
A tree
falls on the roof of your house. You file an insurance claim with your agent,
collect a settlement from the insurer, and fix your roof. End of story, right?
Not quite. Every claim you make on your homeowners insurance is recorded in a
widely used insurance industry database called CLUE, short for Comprehensive
Loss Underwriting Exchange.
Almost
all insurance companies use CLUE to check on the claims history of prospective
policyholders. The CLUE insurance report also includes claims made on your home
before you even bought it. A-PLUS is another company that maintains a
loss-history database. What’s inside these reports can affect your insurance
premiums, or even prevent you from getting coverage.
Your
claims history lives on in CLUE
The
CLUE Personal Property report, which pertains to homeowners insurance, is
divided into two parts: your personal record of claims (“Claims for the
Subject”) and the claims on your home (“Claims History for Risk”). The number
of claims in either section will affect whether you can get insurance for your
home, how much coverage you can get, and how much you’ll pay in premiums. If
you’re turned down for homeowners insurance because of information in your CLUE
report, your insurance company is required to let you know why you were
rejected.
Since
the database is used by most insurance companies, your claims history follows
you from one insurer to another. Actual claims, as opposed to inquiries, remain
in the CLUE database for seven years from the date you filed them. Both
LexisNexis, the owner of CLUE, and A-PLUS advise insurance carriers not to
report loss information just because you called to ask a question about whether
your policy will cover a particular loss. Individual insurance companies may
keep a record of inquires, though.
How
insurers use CLUE
Insurance
companies rely on CLUE reports because statistics show that if you’ve filed a
claim in the past, you’re more likely to file one in the future, says Dick
Luedke, a spokesperson for State Farm Insurance. The amount of a claim is less
important than how often you’ve filed, he says. “We aren’t trying to make up
for past losses, but to predict the risk of future claims.”
Each
insurance company has its own formula for calculating how much a claim will
affect your premium, according to the Insurance Information Institute, a trade
group that provides information to consumers. Suffice it to say the fewer the
claims the less you’ll likely be charged. State Farm gives a 5% discount if you
haven’t filed a claim in the last five years, says Luedke. That’s $40 off an
average annual premium of $804 (this varies by company). Ask your agent if a
claim-free discount is available.
Claims
aren’t all that count
Knowing
what’s on your CLUE report will give you a sense of whether you’ll need to pay
extra for homeowners insurance, or even if you run the risk of rejection.
Unfortunately, even a pristine report doesn’t mean you can be sure of getting
homeowners insurance at a great price. That’s because the claims on your CLUE report
aren’t the only things that affect your overall insurance risk.
Insurance
companies also consider your credit score, which is based on such things as how
much debt you carry, whether you pay your bills on time, and so forth.
According to the Insurance Information Institute, studies show that how people
manage their finances is a good indicator of whether they’ll file an insurance
claim. The more likely you are to file a claim, the bigger risk you are to the
insurance company. And more risk means a higher premium or denial of coverage.
Other factors insurers consider include the location of your home and its type
of construction.
How to
review your CLUE report
If you
do decide to check you CLUE Personal Property report, it’s a relatively easy
process. Under federal law, you get one free CLUE report a year. The LexisNexis
order page has information on how to order the report online, by phone, or by
mail.
Request
a form to receive a Property Loss report from A-PLUS by calling. There’s a
charge of $19.95 to have the report mailed to you, according to the company’s
website. This fee will be waived if you’re ordering a report because an insurer
took an adverse action against you because of A-PLUS data.
Your
CLUE report will have:
·
Your name, home address, birth date, and Social Security number;
·
The number assigned to the report;
·
The name of your insurance company;
·
The type and number of the insurance policy;
·
The type of loss—fire, water, etc.—for each claim and the claim
number;
·
The date of the loss and the amount of each claim;
·
The status of each claim: closed, pending, etc.
·
The order page lets you view a sample report.
The
report also tells you how to dispute any errors you find. Because risk
calculations vary by insurance company, it’s impossible to say exactly how a
claim on your CLUE report will affect your premium. That makes it tough to
decide just how much value checking your CLUE yields. Still, taking less than
an hour once a year to order and review your report could pay off, especially
if you find an error.
This article was written by Mariwyn Evans who has spent 25
years writing about commercial and residential real estate. She’s the author of
several books, including Opportunities in Real Estate Careers, as well as too
many magazine articles to count. Ms. Evans writes for HouseLogic.com.
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