Most consumers know that the credit bureaus maintain detailed information about their credit and loan activity. But did you know there is a report that includes detailed information about insurance losses, claims and inquiries involving you and/or the property you own?
The Early Show's resident money maven, Ray Martin, stressed Thursday that consumers need to know about these reports, and how the information in them is used. They also need to know how they can access and use these reports before they consider important transactions, such as buying or selling a home or changing home or auto insurance.
The reports, Martin explains, can make a big difference in what consumers pay for insurance.
Getting a CLUE
The C.L.U.E., or Comprehensive Loss Underwriting Exchange, is a database of insurance losses and claims that was created and is maintained by the Alpharetta, Ga.-based ChoicePoint Asset Company.
The CLUE database is one of the most comprehensive sources of insurance losses and claims information used by the insurance industry, businesses and the government. It includes over 40 million insurance claims reported over the past five years and is used by 90 percent of the property insurance market.
The information on a CLUE report includes claims and losses reported by insured individuals regarding their insured vehicles and property. CLUE reports include detailed information about each claim by you and/or on your property, including the insurance company name, policy number, claim number, the insured, the property address, your Social Security number, your mortgage company, mortgage loan number, and the amount and reason for each claim.
Beware of What You Inquire About, and How
Consumers also need to know that merely contacting their insurance company or agent to discuss an actual loss and how their insurance might cover it is often considered to be reporting a claim. The result is that this information will show up on your property's CLUE report, regardless of whether your carrier makes a claim payment. This is because policies require insurance companies to take specific actions within specific timeframes when a loss is reported.
However, when you make an inquiry only – to discuss generally how your coverage works on a specific loss, without disclosing that the loss has occurred – then the inquiry is not reported at that time. Consumers need to be specific as to whether they are filing a claim or only making an inquiry.
Considering the amount and detail of the information provided, a CLUE report can either be a good thing or a source of concern, depending on your situation.
Say you are shopping around to get a better deal on your property insurance, and you had a claim for damage to your roof from a fallen branch. Insurance companies who review your CLUE report will see the claim and ask if the peril – the tree from which the branch fell – still exists. If the tree has not been properly dealt with, then the carrier may feel future claims caused by this tree are a possibility and either charge you more for insurance or refuse the coverage until the tree is removed. In another example, say there are several claims for lost property, such as stolen computer, lost engagement ring, etc. An insurance company considering taking you on that sees these claims on your CLUE report may determine you are either careless when it comes to your personal property or, worse, you are a habitual claims filer, and refuse coverage altogether.
But a CLUE report can be helpful to home buyers. If you are buying a home, it would be invaluable to learn about the previous insurance losses and claims history of the property. This is important to know, since you will want to learn about the work performed to restore the property and about how the loss history can affect the cost to insure to insure the property.
Since these reports are only available to those with a "permissible purpose" home buyers cannot simply obtain a CLUE report on a home to satisfy their curiosity. For this reason, home buyers are advised to require the seller to provide a CLUE report as a contingency in their purchase offer or purchase and sale agreement.
A CLUE Home Seller's Disclosure Report can be purchased from ChoicePoint for $19.50. This report provides information about insurance losses at a property address and does not include the personal information that the home seller wants to keep private.
As is the case with CLUE Reports, these reports include losses and claims reported only within the past five years, so losses reported prior to that would not be included. But as is the case with many losses, collateral damage from the loss (such as mold caused by extensive water damage) would typically be evident within a short period after the initial loss.
Individuals selling their home are strongly advised to get a copy of this report in advance. If your home has not experienced a loss in the past five years, the report would indicate "no losses found for the address requested," which can provide a competitive edge and comfort to a potential buyer. Also, home sellers will want to make sure there are no errors or inquiries that create the "tainted house" scenario. Errors can be reported directly to ChoicePoint, which will ask for clarification from the insurance company involved. Home sellers should also have detailed records of any restoration and remediation work performed that was related to the loss and claim on the report.
Thanks to the Fair and Accurate Credit Transactions Act of 2003, you can now obtain a free CLUE report for your insured property online at Choicetrust.com, or by calling 866-527-2600. The report is free once per year, as required by the regulations that also require a free annual credit report at annualcreditreport.com.