Ever Wonder How Your Auto & Home Insurance Is Priced? Get A C.L.U.E.
September 12, 2017Did you know that any insurance claims you have filed in the past 7 years for collision or comprehensive damage to your car or theft, fire, or storm damage to your home are factored in to any insurance quote you receive?
I learned this interesting fact a few years back when I noticed a clause on my homeowner’s insurance renewal that warned me that my insurance company could cancel or refuse to renew my policy if I had 3 or more weather-related claims within the past 3 years. Considering that I’m still waiting to find out if my condo in Florida sustained any damage from Hurricane Irma, this is important information and definitely had me thinking twice and doing more research.
Getting a C.L.U.E.
What I’ve learned is that insurance claims are actually reported to C.L.U.E. (the Comprehensive Loss Underwriting Exchange.) Kind of like your credit information is reported to the reporting bureaus, there’s also an insurance “reporting” bureau for insurance companies to consult when pricing your coverage. Too many claims on your C.L.U.E. report could even lead to being dropped by your insurance company.
Not just your claims
Even more interesting, it’s important to know that it’s not just claims that you’ve filed but also any claims that any previous owners of your home may have filed in the past 7 years. So you could file your first claim and unknowingly hit the 3-claim limit and lose coverage. That’s also important to know if you’ve owned your home for less than 7 years.
Getting my own C.L.U.E.
This got me curious about what might be showing on my report so I went to the website of LexisNexis Risk Solutions, which maintains the C.L.U.E. files. In compliance with the FACT Act, you can receive a free annual report of your C.L.U.E. file on your auto and property records. I had no claims showing on my property report but I did have 2 claims showing on my auto records and 4 “possible related claims” also were included.
This finally explained why my stepson had been excluded by my auto insurer from EVER driving one of my vehicles. The 4 possible related claims showing up on my report were actually collision claims that he had on his own auto policy over the past 7 years. But since we lived at the same address when he first got his licence, these claims also show up on my personal file as possibly linked. My insurance company flagged those related claims and issued an exclusion rider on my stepson a few years ago.
Checking your C.L.U.E.
Why should you care what’s in your C.L.U.E. file? Any inaccuracy on your report could be causing you to pay additional premiums or even keeping you from getting insurance coverage at all. By reviewing your report on an annual basis, you can dispute any errors before they negatively impact you.
An extra step in buying a home
You also want to order a C.L.U.E. report if you are buying a home that will be new to you but was previously occupied by another homeowner. In that case, you’ll need to ask the seller to order the property report for you to view, as it’s only available to current homeowners.
If you are uncomfortable filling out the online request form, you can also call LexisNexis at 1-866-312-8076 to request your C.L.U.E. report. Either way, be sure to get a clue.
Want more helpful financial guidance, delivered every day? Sign up to receive the Financial Finesse Tip of the Day, written by financial planners who work with people like you every day. No sales pitch EVER (being unbiased is the foundation of what we do), just the best our awesome planners have to offer. Click here to join.
