Get a Clue About Your CLUE Report

When purchasing your home, you probably had to familiarize yourself with credit reports and FICO scores to secure your mortgage loan. However, did you know there is a system similar to credit reporting for homeowners insurance claims? It’s the Comprehensive Loss Underwriting Exchange (also known as CLUE) and it may have an impact on your ability to insure your home. CLUE is owned and operated by a private agency called LexisNexis, which bases its reports on information provided by member insurance companies. The CLUE report can provide information about you as an insured individual, as well as details about your home’s history of insurance claims.

Insurance companies that utilize the CLUE database report all of their claims to CLUE. In turn, they can query the database when someone requests a quote for insurance. The individual’s claims history is then available to the insurance company for review as a factor in determining whether or not to offer insurance and at what premium. For example, if you filed several home insurance claims in the last few years and your insurance companies were members of CLUE, all of your claim information would be available to other CLUE insurance company members. If you are now looking to change insurance companies, your prospective insurer will likely order a CLUE report to determine how much of a risk you might be.

Like your credit reports, you also have the ability to request a copy of the CLUE report to know what information has been gathered about you. LexisNexis provides online access to your personal report and the ability to dispute any inaccuracies contained in it. Reports are also generated for a specific property, so your home may be negatively impacted by its loss history with previous owners, even if you were not the person filing the claims. If you are looking to purchase a house, you might ask the seller to provide you with the CLUE report since you cannot access it without being the homeowner. You should know about the home’s claims history and how it might impact your future ability to insure the house prior to purchasing it.

Each state has different laws governing the use of CLUE reports in the home insurance process. Some are stricter than others in what information is allowed to be utilized in the report and scoring, while others may be quite lax. You can go to the National Association of Insurance Commissioners (NAIC) website, which provides links to each state’s insurance department. Select your state from the map and then review the information governing your state’s use of CLUE reports.

It’s important to understand that most home insurance companies report claims information to CLUE, so you cannot avoid your loss history simply by changing insurance companies. Not caring for your home and causing lots of insured damage can have a significant negative impact on the cost of your insurance. Manage your insurance wisely and it will pay off in the long run.

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