CLUE Reports and How They Affect You

Moses Lake Real Estate Agent Heather Adkinson

Also known as a Comprehensive Loss Underwriting Exchange is a claims history database that enables all insurance companies to access consumers claims information when they are underwriting an insurance policy.

Here is how it works….even if you as a homeowner have never had any claims or problems getting home insurance this will still affect you.  If you happen to be purchasing a house that has had claims made against the home you may be unable to get homeowners insurance. 

Another flaw in the system is that the only one able to obtain a clue report on the house (besides the insurance agency) is the homeowner of the property.  Make sure when you are writing up a contract on a house that the insurance contingency paragraph is marked on the agreement.

If when a homeowner reviews the report and finds errors on that report they do have the ability to dispute the report at which point the owners insurance company will be contacted to try and determine if there is a valid claim or not.

Unfortunately these reports can also be used by insurance companies to determine what kind of risk you would be and can in turn affect if you get turned down for insurance.  Not only do the CLUE reports cover homeowners, there is also a database that shows strictly  automobile claims.  Claims will only stay on your report for 5 years however.

Be aware that any hint of water damage to a property, for example, is likely to trigger a negative mark on the property's CLUE report. Well-intentioned consumers who call an insurer to merely inquire about coverage for water damage have been shocked to have their insurance cancelled.

Here are some of the worst case scenarios that have come up as taken from http://www.privacyrights.org/fs/fs26-CLUE.htm

A former 21st Century Insurance fraud investigator and 32-year-old homeowner and mother was forced to get substandard homeowner's insurance at three times the normal price because the house she was purchasing was "blacklisted" on a national Comprehensive Loss Underwriting Exchange (CLUE) report.

A 79-year-old homeowner was turned down for a homeowner's policy because she made a $393 claim on her purse that had been stolen in Montreal while she was visiting her daughter.

A 75-year-old homeowner was "blacklisted" after she made a telephone inquiry about her policy coverage with Allstate, with whom she had continuous homeowner's coverage for 30 years.

The Chief of the Consumer Services Division, California Department of Insurance and Palm Springs homeowner was turned down when he attempted to get insurance for his new home. An inaccurate CLUE report showed five claims, two of which were for another property owned by the seller in a different city; two other "claims" were only for coverage inquiries and one claim was fully remedied and should not have had bearing on his eligibility.

Be aware that filing any type of claim with your insurance company may result in issues that you ought to not have to deal with.