Get a CLUE: Insurance Report Facts Homeowners Need to Know
If you were having trouble getting a loan or a credit card with a low interest rate, you'd probably check your credit report to find out what was wrong. If your car insurance payment skyrocketed without explanation, you might look up your driving history report to check for errors. But do you know where to start looking for answers if you're paying too much for your homeowner's insurance? Many homeowners don't.
The report you need to look at is called your CLUE personal property report. CLUE stands for Comprehensive Loss Underwriting Exchange, and in your CLUE report, you'll find important information that affects your insurance rates. Here's what you need to know about the CLUE.
What's in a CLUE?
Your CLUE report contains your identifying information, a description of your property, and information about any loss claims that have been filed at your address. The report will describe what kind of loss it was, whether the claim was approved or denied, and if it was approved, how much money was paid out for the claim. Depending on how long you've lived at your property, your CLUE report may contain information about loss claims filed by the previous owners as well. Information can stay on the report for up to seven years.
The information in the CLUE is used to help insurance agencies set homeowners insurance rates. The more claims have been filed for your address, the higher your insurance rate is likely to be. The CLUE report can also reveal important information about your property. For example, if there are several claims for losses due to burglary, the insurance company could deduce that your home is located in a high crime area.
Insurance Inquiries Can Affect Your CLUE
Even if you don't file a claim, inquiring about a possible insurance claim can affect your CLUE report. If you call your insurance company to ask about whether or not a particular loss is covered, they can make a note of the inquiry and put it into your CLUE report. This can end up costing you more money in the long run.
For example, imagine that you're considering getting a dog, but worried about what would happen if your dog were to bite a neighbor. You might call the insurance company to find out if your homeowners insurance will cover the neighbor's visit to the doctor and any treatment for the bite. Of course, you wouldn't go forward with filing a claim, because the dog bite was only hypothetical. However, as far as the insurance company knows, you now have a dog at your property that bites. That increases the likelihood that they'll eventually have to pay a claim for a dog bite. So, your insurance premiums may increase accordingly. And because the information will be in your CLUE report, switching insurance companies won't help either. Any home insurance company can access the information in your CLUE report.
This doesn't mean that you shouldn't seek out information about possible claims. But if you're calling the insurance company about a hypothetical situation, make sure that you're absolutely clear that it's a hypothetical. And if you need information about a real potential claim, be aware that you may see a rate hike, even if you ultimately don't file the claim.
How to Get a CLUE
Under the Fair Credit Reporting Act, you're entitled to a free copy of your CLUE report annually, just like your credit report. You can request your CLUE personal property report online (along with a copy of your CLUE auto report, if you like) or you can order it by mail or phone. You can only request a CLUE report for a property that you own, so if you're considering buying a new home, ask the seller to request a copy of the CLUE report so that you can look at it. It's a good way to get a sense of anything that might be wrong with the property, or to at least get an idea of what kind of home insurance rates you might end up paying at that address.
If you notice errors on your CLUE report, you can dispute them over the phone or in writing. You'll need to provide the CLUE reference number on the report, the date of the claim, the insurance company, and a summary of the facts in the case as you see them. Once you do that, your dispute will be investigated. If the investigation supports your side of the story, your report will be amended. If the investigation concludes that the report is correct, you can still opt to have a statement explaining your side of the story attached to the CLUE report for future insurers to consider.
Your home insurance is a big expense, and your CLUE report is an important factor in determining just how big that expense is. Knowing the facts about CLUE can help you understand your insurance rate and keep your premiums under control. To get started click here to read more.