If you file a claim on your home, the insurance industry will remember it. Every time an insurer handles a claim, it reports the case to the Comprehensive Loss Underwriting Exchange. CLUE isn't the only database that keeps track of your claims history, but it's famous enough that insurance histories are usually called CLUE reports. Once CLUE records your claim, it stays on file for five years.
Any time you want to take out a policy or switch insurance companies, the company you're talking to looks up your recent claims history. If you have a record of filing multiple claims, or a dog with a habit of biting the neighbors, the company can find out from CLUE. If your history makes you look like a money-loser, the company turns you down. In some cases, insurers take on home-buyers, don't check CLUE until it's almost time to close, and then reject the application, leaving the buyer scrambling.
CLUE does more than keep files on you personally -- the database also keeps records on your house. If you try to buy a home with a history of flooding or mold claims, you may not be able to find an insurer who'll give you a policy. If you do buy a house with a troubled past, the CLUE files don't disappear when it changes hands. You may find yourself unable to sell because the next buyer's insurer won't accept the home, even though you never filed a claim.
Without ever filing a claim, you can still end up in CLUE. Say a car crashes into your front door; you notify your agent, then learn the repair cost is lower than your deductible. Even though you don't file a claim, just reporting it to your agent or asking about coverage earns a record in the database. Some states have passed laws to prevent this, for example banning insurers from reporting queries that don't result in a claim.
Contesting the Record
You have a right to see a free copy of your CLUE report once a year, though the database agencies may charge to mail it to you. Any time an insurer turns you down because of your report, you're entitled to another free look. If you're looking to buy a house, ask the owner to provide you with a CLUE report so you can learn about potential problems.
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