Arizona Insurance companies rely on CLUE reports to assess risk. When you get your quotes and comparisons, the information appearing on that report plays a large part in what you find on the proposal from your insurance agent.
Don’t have a clue about your CLUE Report?
Have you EVER had a conversation with your insurance agent about CLUE reports that are a part of assessing your insurance needs and rates?
Most homeowners are aware that credit reports are a part of that process, but far too many clients I speak with don’t have a clue! about the CLUE report. The level of knowledge about this report can go a long way in helping you best manage how much you will be paying long term for your coverage. Let’s look into this topic and cover at least the most salient points.
- The CLUE insurance report is a record of all homeowners’ insurance claims for the past seven years.
- It is the acronym for Comprehensive Loss Underwriting Exchange; a claims history database that is accessed whenever you renew, apply for a new policy, or submit a claim.
- It is a tool used to assess your risk… how likely you are to make a claim against your policy – for homes or vehicles. Each and every claim you make to your insurance provider is recorded in this database, and widely used in the industry for risk assessment.
- The data is attached to the property, not just the current insured.
Thus, claims made prior to your ownership can also affect your premiums, and in some instances, prevent owners from obtaining coverage. This is one of those double-edge sword kind of things. If you were buying a new home, you would want the value/benefit of the report to protect you from knowledge a seller may be trying not to reveal.
The CLUE report is broken down into two parts: A) The amount of personal claims made, and B) the total claims made on the property, which collectively determine whether or not you can obtain coverage and how much your premiums will run.
- The good news… if you are rejected – the company is required to let you know what was found on the report that impacted that decision.
- The report claims history, because it is in this huge database, follows you from one insurer to another. However, the information is limited to actual claims. If you have ever made an inquiry to your agent, the probe about whether or not your policy will cover a particular loss is not supposed to be reported.
- More good news… even though the database holds all the information, every carrier has its own formula for calculating just how that claim will impact premiums. If you are claim free, don’t be shy… ask your insurance company if they offer claim-free discounts.
- Just as you are responsible for maintaining and having an awareness of what is on your credit report, it is likewise important to secure a copy of the CLUE report on occasion to check it for accuracy. Under the Fair Credit Reporting Act, it is your right to request a copy from LexisNexis at 1-866-312-8076 or Personalreports.lexisnexis.com. If you discover an error on your CLUE report such as an invalid claim or an incorrect loss amount, you should work with your insurance agent, claims adjuster and LexisNexis to convey the error and have the report corrected. You can get one free CLUE report per year.
- Being aware of the impact of any claim on your policy, you can better make decisions about filing a claim; sometimes you are better off paying for low-dollar losses out of pocket.
As always, as an independent insurance agent, my task is to be a champion for my clients’ insurance needs, premiums and coverage. If you have questions about this topic, call me today.
Champions are not the ones who always win races –
champions are the ones who get out there and try.
And try harder the next time. And even harder the next time.
‘Champion’ is a state of mind.
They are devoted.
They compete to best themselves as much if not more
than they compete to best others.
Champions are not just athletes.
~ Simon Sinek