How does a clue report affect insurance rates?

CLUE, short for Comprehensive Loss Underwriting Exchange, is to your insurance record what your driving history is to your driver license. It contains information about losses in your liability insurance policies, including auto, home, business and umbrella liability policies.

The report contains the type, amount, and reason for each loss reported, and contains a 7 year insurance history. Additional information in your CLUE report includes you name, the address where the claim was filed, and you Social Security Number for identity verification purposes. The report can be accessed by insurance companies and agents who are members of the CLUE exchange, and you can get one free copy per year for you own records.

Moneywatch reported that losses do not necessarily have to be claims that you file. For example, if your son broke a window and you chose to replace it rather than filing a claim. If you discuss this damage with your insurance company, the estimated loss amount can still be logged against your homeowner's policy. The argument is that even though the insurance company did not pay on a claim, the insured property suffered a documented loss.

When you apply for a car insurance policy, the prospective insurer will pull up your CLUE report. In an average report, you may be asked some cursory questions, such as whether a listed tree that caused damage has been removed, but the more likely scenario is that the report will not be mentioned at all. However, the number of people who have a high number of claims you have filed in the past 7 years and the amount paid out on them will help the insurer decide whether you are an insurable risk and what premiums would be appropriate for your situation.

Some CLUE entries are to be expected, such as damages caused in a multi-car accident, but insurers are wary of people whose file an excessive number of property claims, or multiple liability claims of any type because it could indicate that you are a potentially high risk customer.