THE COLOR OF MONEY
Insurance database tracks homeowners' claims
By Michelle Singletary
Do you have a CLUE?
Actually, that's not a fair question. It's unlikely you've seen or even heard about the type of report compiled from information in CLUE, which stands for Comprehensive Loss Underwriting Exchange.
CLUE is a computerized claims database used by the insurance industry. It was created and is maintained by ChoicePoint Inc. of Alpharetta, Ga. CLUE enables insurers to check the five-year claim history of both a homeowner and a particular property.
If you were hit bad by Hurricane Isabel, or any disaster for that matter, and you made a claim, the information will end up in the CLUE database.
Insurance companies send claim information on their customers to CLUE much the way creditors send information to the three major credit bureaus.
Your claims history can then be shared with other insurance companies when you shop for new insurance coverage. CLUE is not used for renewing coverage with your current insurance company because they know what claims you have made, according to James Lee, ChoicePoint's chief marketing officer.
CLUE has been in use for more than 10 years. There is another similar database operated by New Jersey-based Insurance Services Office Inc., which like ChoicePoint says 90 percent of insurers contribute claims data to it. However, I found ChoicePoint's Web site easier to navigate and the information about the claims database easier to understand and use.
Lee said most consumers haven't seen their CLUE report because the company only recently began to market the product directly to policyholders.
"In the past, the use of CLUE has been embedded in the home-buying process and was almost invisible to the consumer," Lee said. "But a couple of events have changed that. Because of the economic downturn, insurance companies have become more selective in who they insure. So now more consumers want to know when, why and who is using their (claim) information."
You can order your report online at www.choicetrust.com for $12.95 or by mail for $9 by writing to ChoicePoint Consumer Disclosure, P.O. Box 105108, Atlanta, Georgia 30348-510. You also can order by calling toll free (866) 527-2600.
Federal law gives consumers the right to review their own claims report at any time. If you find an error, you can dispute the item. The database company then has to contact the insurer that placed the item on your report to resolve the dispute within 30 days.
Under the Fair Credit Reporting Act, if you have been denied insurance, you are entitled to a free copy of your claims report within 60 days of the denial.
When you get your CLUE report, it will be divided into two areas. One section will list losses reported on the property in the last five years whether you owned it or not. A second section lists losses reported by you. The report will include the date of a claim, the type of claim and the amount paid by the insurance company.
Unlike a credit report, there is no reason to get your CLUE report every year. However, there are at least three major reasons to get your claims history, according to Lee.
If you're buying a home. Even though you must have homeowners insurance to get a mortgage, many buyers often wait until the last minute to secure a policy. Can't do that any more. Previous claims, especially for water damage, can impact your ability to insure the home you want to buy.
This report can also identify previous problems that don't appear on a seller's disclosure form, Lee said. So, ask for a CLUE report early in the negotiation process. Under the law, you can't order a CLUE report on a property you're interested in purchasing. You have to request it from the property owner or his real estate agent. However, you may not get one until you have a signed contract.
If you're selling your home. Previous claims can impact the insurance premium offered to a potential purchaser or his ability to insure your home, which in turn may make it difficult for you to sell it. On the other hand, a claim-free CLUE report may give you a competitive advantage.
If you want to change insurance companies. Check your CLUE report to make sure all of the information is correct. Double check to make sure claims older than five years have been removed.
You can also add information to your report to lower your risk profile. For example, if your dog mistook the pizza delivery man for his favorite chew toy and you put in a claim to have your insurer pay the medical bills, you can include a notation that you no longer own the pooch.
The good news about all this is that two-thirds of all CLUE reports show no claims at all. But if you're not sure about your claims history, it's worth getting a CLUE.
You can write to Michelle Singletary at the Washington Post Writer's Group, 1150 15th St. NW, Washington, D.C. 20071.
