Do You Have a C.L.U.E.? CLUE Report that is.

We all know that when we go to apply for credit or get a loan that one of the biggest (if not only) deciding factors is our credit report. It is our financial history in a nutshell and is used from everyone from banks to the local gas station to determine our creditworthiness. However, few of us are aware that a second report exists out there that deals with our insurance claim history.

The Comprehensive Loss Underwriting Exchange (C.L.U.E.) report is a detailed listing of any claims or losses we have filed against an insurance company in the previous five years. In this article we’ll explain to you why your C.L.U.E. report is as important as your credit report when getting insurance, how to obtain a copy of your report and how insurers use this data for underwriting your policy.

Your CLUE report is one of several factors that insurers use to decide how likely you are to file a claim against your auto or homeowners policy. Insurance companies provide data about past claims including amount paid, claim type and description to a centralized database currently maintained by ChoicePoint systems. For property claims the information follows the property, not the person. So, for example, you may have just moved into a new home and the CLUE report will show claims that the previous owners have filed against that property. For automobile claims, the data follows the individual and not the vehicle.

Insurers use the information in the report to determine several things: Will they issue you a policy? What rate category should you be in? What types of limits will they set on a policy? When it comes time to renew your insurance the insurance company may go back to the database to review your claim history with other insurers. In some cases the information contained in the CLUE report can result in your policy being non-renewed, or your rates going up significantly.

The CLUE report itself contains other information about you in addition to claims. Your personal information such as name, date of birth, social security number and previous addresses are also contained in the database. A startling trend that consumers are finding out is the database itself may contain information on items in which no claim was ever paid off for. Media reports have focused lately on homeowners who called their insurance company only to inquire about coverage for water damage finding their insurance non-renewed and the information showing up on their CLUE report!

It should come as no surprise to you then that as a consumer you should be very concerned about what shows up in your CLUE report. Furthermore, it is not only your report you have to worry about, but also the report on the property you may be thinking of buying. You don’t want to find out at the last minute the property you are buying has negative entries in the report to make it uninsurable or take away from its market value.

So how can you protect yourself from false information and see what is in your CLUE report? Luckily for us, CLUE reports fall under the Fair Credit Reporting Act (FCRA) and are subject to many of the same rules as credit reports. You are entitled, for example, one copy of both your automobile and personal property report every 12 months for free. You are also entitled to the right to dispute information within the report and have it investigated and removed if it proves to be inaccurate or incomplete.

ChoicePoint, the maintainer of the database, provides an easy way to obtain a copy of your report and view it online. To obtain a free copy of your CLUE report visit http://www.choicetrust.com and select the appropriate section for either personal property reports or automobile claims reports. Once you have obtained the report review it for accuracy and if you need to dispute an entry, there are instructions on how to do so.

Whereas once insurance premiums and underwriting decisions were made based on where you lived and what type of house you owned, or car you drove, today insurance companies are aggressively trying to find more and more ways to classify policyholders to get the maximum profit out of them. Much as an incorrect entry in your credit report can prevent you from getting a home loan, an incorrect entry in your CLUE report can prevent you from getting insurance or paying a much higher rate than you should. To protect yourself make regular monitoring of your CLUE report one of your yearly to-do tasks, and perhaps think twice about calling your insurance company to inquire about a possible claim – you never know where that phone call might end up.