Much like a clean bill of health, an impressive or not-so-impressive Comprehensive Loss Underwriting Exchange (C.L.U.E.) report could spell a big difference in your insurance "score".
Unknown to many consumers, C.L.U.E. is a claims history database that can be accessed by homeowner and vehicle insurance companies for exchanging information when they are underwriting or rating policies. This means that claims that have been filed by policyholders may have a strong impact on their overall insurance score, which in turn can determine whether their homeowner's policy, for example, will be renewed or denied in the future.
How C.L.U.E. Works
C.L.U.E. holds vital information, including consumers' policy numbers, names and dates of birth, as well as claim details such as history of loss, its type and the amount paid. It may also have the property's address for homeowner's policies, and vehicle data for auto insurance.
Not all insurance companies, however, have access to C.L.U.E. Only those that contribute information to the database can acquire data in exchange. When allowed by the companies they represent, insurance agents may also withdraw data from the database.
These details typically span up to seven years in personal property claims history, and may only be accessed by the owner, insurer or lender for the property under the Fair Credit Reporting Act.
Consumer Rights and Free Access
The Fair Credit Reporting Act allows consumers to have a free copy of their C.L.U.E. report. Interested individuals may request a copy from computer-assisted legal research service providers such as LexisNexis by visiting https://personalreports.lexisnexis.com or calling toll free at 1-866-312-8076. A free report can be requested once every 12 months.
Because many consumers feel that their privacy and rights are somehow compromised by C.L.U.E. as insurers can use information from the database without their knowledge, some states have already passed laws to protect consumers. Several states have even begun requiring insurance companies to give proper notification when using the database. To learn what laws and restrictions apply to your state, browse www.naic.org/state_web_map.htm to contact your state insurance department.
Using Free Reports to Your Advantage
While C.L.U.E. reports have generally been viewed negatively by consumers, some experts believe that home and auto owners can actually use their free reports to their advantage.
In some states, for example, C.L.U.E. reports are being promoted as a convenient tool for consumers in finding out what the insurance companies will look at when they apply for insurance. With their own C.L.U.E. reports at hand, consumers can then assess if a particular insurer is giving them accurate and fair quotes. Moreover, they can see how accurate the information is stated in the database for other insurance companies to see, and rightfully take action to correct the information.
For people eyeing a property or home, they may also use the property's C.L.U.E. report in tracing its loss history - and be able to estimate insurance pricing or availability based on recent claims.
Avoid Having a Bad C.L.U.E. report
If it is not yet too late, home and auto owners who intend to keep their C.L.U.E. reports clean can avoid any reason for insurance companies to deny coverage.
- Raise your deductibles - It may cost you more initially, but increasing your deductible may save as much as 20 percent on your premiums. More importantly, it will give you a higher chance of renewing coverage.
- Avoid filing small claims - Reserve claims for bigger losses over minor ones such as a lost personal property as all claims will reflect on your C.L.U.E. report. Be extra cautious about filing minor claims within a short span of time because your policy may get cancelled altogether.
- Refrain from making unnecessary inquiries - As inquiries may be recorded on your C.L.U.E. report automatically as a loss whether or not you pursued a claim, it is wise to avoid making unnecessary inquiries. Call your insurance company only if you have a sizable claim that is likely to be covered by your policy.
- Take care of your property - Some home damages, such as mold infestation, may be caused by more minor unaddressed problems such as water leaks. Avoid escalating minor repairs, and you will avoid future refusals from insurance companies.