About CLUE Reports
The Comprehensive Loss Underwriting Exchange, or CLUE, is a database that allows auto and homeowner insurers to exchange information about property loss claims. Unless your state specifically requires it, prior notification isn’t required before your information goes into the system. In Florida, CLUE reports are used for automobile homeowner’s insurance policies.
Here’s a simple example of how the exchange system works:
- Insurance companies feed information about property loss claims, perhaps even inquiries about coverage, into a central database.
- If you file a claim for loss against your homeowner policy, the insurance company adds this information to the national database.
- The CLUE database is maintained by an information vendor, not another insurance company.
- If you apply for homeowner’s insurance with another company – say, you move to another part of the country – the new insurance company can access the CLUE database and learn of your past claims and claims on your new home from the previous owners.
What does a CLUE report say about me?The CLUE report includes personal information such as your name and date of birth. Tied to your identifying information is a record of any homeowner property loss claims you have submitted to an insurance company for the past five years, including:
- Date of the loss
- Type of loss claimed
- Amount paid by the insurance company
The CLUE database may also include notations of property “damage” – even if the insurance company didn’t pay out a cent. Any hint of water damage to a property, for example, is likely to trigger a negative mark on the property’s CLUE report. Well intended consumers who call an insurer to merely inquire about coverage for water damage have been shocked to have their insurance cancelled. Your chance to get new insurance at a good rate could be affected.
Why do insurers use CLUE reports? CLUE reports are a way for insurers to share information about your record of filing insurance claims. Insurance companies are by nature in the business of assuming risk. The more that a company pays in property claims, the less it profits. CLUE reports are one of the ways an insurer assesses how much of a risk it is assuming by selling you an insurance policy.
The theory is that an individual’s history of filing insurance claims is a good indicator of how likely that person is to file future claims. Taken to the extreme, this process of risk analysis translates to “use it and lose it”. If you file a claim against your policy, report damage without filing a claim, or even inquire about your coverage, you may not get new insurance at a good rate – or at all.