An Insurance Nightmare

(CBS)  When Kristen Angel's drains backed up, she called her insurer to see if they were covered. She fixed the problem without filing a claim. So imagine her shock when her insurance company dropped her just, she says, for asking that question.

"There was no damage, no claim, simply an inquiry," Angel told CBS News Correspondent Bill Whitaker.

Angel is one of an exploding number of homeowners who say they are trapped in a surreal insurance nightmare -- dropped, or having their premiums balloon for asking about services they've paid for and even blacklisted for filing one claim.

This is all thanks to an industry database called CLUE, the Claim Loss Underwriting Exchange, which collects information on every homeowner claim and question. Insurers claim it weeds out risky customers and keeps costs down.

"Insurance companies are indeed frightening people from legitimate claims," says California's Insurance Commissioner John Garamendi.

He says in the nation's number one housing market, home insurance is the number one complaint -- jumping from some 300 two years ago, to more than 4,000 so far this year.

"All of us are scared to death of filing a claim for fear we are going to lose our policy. That is wrong and we are not going to let that happen," says Garamendi.

Friday, Garamendi unveiled a Homeowners Bill of Rights. It lets homeowners contest their CLUE reports and stops insurers from dropping them for asking questions. Insurers call CLUE a beneficial tool.

"Companies use this information to determine the risk that they are assuming, so effectively it is good for both the consumer and the insurer to know," says Dan Dunmoyer, an insurance lobbyist.

Still, Kristen Angel is scared to use her insurance.

"If it's under $10,000, I won't even consider calling the insurance company," she says.

She learned the hard way that you don't always get what you pay for.