Find out what a comprehensive loss underwriting exchange (CLUE) report is and why it's an important source for you and your homeowners insurance company.
what is a CLUE report?
The comprehensive loss underwriting exchange is a consumer-reporting database, containing up to 7 years of a person's insurance claims history. Most homeowners insurance companies use CLUE as a go-to source when looking up information regarding the past claims of a soon-to-be policyholder.
Essentially, your CLUE report breaks down in 2 ways: your own personal record of filing claims, and the claims you've filed at a specific address. Homeowners can request a free CLUE report online, but prospective buyers must request a copy of the home history report from the current property owner.
what information does a CLUE report contain?
A CLUE report includes basic information, like your name, date of birth, social security number, and policy number. Additionally, it provides information regarding any filed claims (for the last 7 years) — such as the date and type of loss (water, fire, hail, etc.), the amount reimbursed by the insurer for the loss (if any), the address of the home, and a description of the property.
So, if you filed a claim for the tree that fell through your roof a few years back, it's most likely logged in your CLUE report. Did an insurer pay for the medical costs of the mailman who tripped over the ice sculpture in your walkway? That's logged in your CLUE report too. These reports, however, don't divulge private information like credit reports or any criminal history.
Depending on the state in which you live, the report may contain any inquiries you've made about coverage or a loss, but those aren't necessarily factored in when your insurer is determining a policy rate. Moreover, insurance companies are prohibited by law from adding any notes to your CLUE report — only you can. If, for example, you filed a liability claim for a dog bite a while back, and you've since given the pooch a new home, you could add that update to your report.
how do insurers use CLUE reports?
The CLUE database helps homeowners insurance companies determine how risky a policyholder might be based on their claims history. Meaning, if a homeowner has a lengthy history of filing insurance claims, he or she may be perceived as a high-risk policyholder, and as a result, the insurer may require a higher policy premium. That's because studies show a strong correlation between past and future claims. What's more, the cost of the claim is usually a more important factor than how many claims have been filed.
If you're ever turned down for coverage because of the information on your CLUE report, the insurer is required by law to let you know the reason.
For the most part, however, home insurance companies use the information found in CLUE reports to calculate a coverage amount that's right for you — either when you apply for coverage or get a quick, free quote online.
the importance of obtaining a CLUE report
Whether you're in the market for a home or are putting your house on the market, it's always wise to request a CLUE report so that you're thoroughly aware of the conditions of your property. And under federal law, homeowners are legally entitled to free home history reports from LexisNexis by either calling them toll-free at 1-866-312-8076, or visiting their website.
For home buyers
Remember, a CLUE report can help clue you in (sorry, it was right there) on any serious damage or repairs sustained on the property in the past. With this vital information, you can inform your home inspector and ensure there are no existing frailties in the home that could either result in possible future claims or higher policy rates. As mentioned before, you wouldn't be able to obtain a copy of the report as a home buyer, but you could request the report from the current owner of the home.
For home sellers
If you're selling your home, going over your CLUE report allows you to be completely honest about the condition of your property to prospective buyers, thus preventing unwanted surprises like lawsuits, for instance, later on. This is also an opportunity to ensure that any past repairs made to the home have been properly carried out.
Disputing your CLUE report
Reviewing a CLUE report allows you to identify any inaccurate or erroneous information that could be costing you more on your homeowners policy. That could mean anything from listed damages that never happened or inquiries being misconstrued as claims. To obtain a copy of your report, or to dispute CLUE reports, contact LexisNexis® directly and they will reach out to your insurer for you.
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