What is CLUE? CLUE stands for Comprehensive Loss Underwriting Exchange. And there is a reason it’s important to understand.
There was a hail storm a few years back and our roof got pelted beyond recognition. When the opportunity presented itself to get it fixed, we took it. We filed our insurance claim, paid our deductible and that was it…or so I thought. Just like how the amount of debt you carry figures into your credit score, the insurance claims you’ve filed personally AND the claims filed on your home affect your CLUE score. In and of itself, this is not a big deal. But the fact that it is a precursor to what your insurance premiums will be is a big deal…or should be.
The CLUE Personal Property report has two parts: your personal record of claims (“Claims for the Subject”) and claims on your home (“Claims History for Risk”). The number of claims 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.
The CLUE database is used by most insurance companies. This means that your claims history will follow you from one insurer to another. Actual claims remain in the CLUE database for seven years from the date you filed them. Insurance companies rely on CLUE reports because statistics show that people, who have filed a claim in the past, are more likely to file one in the future. Insurance companies consider this, and their own proprietary formulas when calculating what your premiums will be. It goes without saying that the fewer the claims the less you’ll likely be charged.
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. Even a pristine report doesn’t mean you can be sure of getting homeowners insurance at a great price. The claims on your CLUE report aren’t the only things that affect your overall insurance risk. Your credit score, if you pay your bills on time and how much debt you carry are things insurance companies consider as well. Insurance companies believe that 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 even denial of coverage.
Review your CLUE report. Thankfully, federal law allows one free CLUE report a year. The owner of the CLUE report is a company called LexisNexis. To check you report, go to the LexisNexis order page at this address: https://personalreports.lexisnexis.com/fact_act_claims_bundle/landing.jsp. As well, you can review a sample report so you know what you are looking at. If there are errors, the report lays out how to dispute them.
Be proactive and find out why your insurance premiums are the way they are. If there are errors in your report, you may even end up saving yourself some money. So go ahead and get a CLUE!
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