Homeowners Insurance - C.L.U.E
CLUE can magnify home woes
Kenneth Harney
Do you have the slightest clue about CLUE? Do you know that an innocent phone call to your insurance agent asking about the deductible on your homeowner’s policy can trigger an electronic loss report on your home to a national database, even if you never file a claim and pay for all repairs yourself?
Sound bizarre? Welcome to the emerging Alice-in-Wonderland world of homeowners insurance, where not only do you have a personal three digit risk score, but your house has its own separate electronic dossier accessible by insurance companies nationwide. Depending on what’s in that dossier, your house may already be stigmatized as high risk-rendering it more difficult to sell since insurance may be unavailable or extremely expensive to a prospective buyer.
Worse yet, your “homeowner’s insurance score” could be tainted by the scoring software’s heavy reliance on your personal credit file data-information which recent national studies have documented to be too-frequently riddled with errors and omissions.
What is CLUE and what does it do? The acronym stands for Comprehensive Loss Underwriting Exchange. It is a privately run national electronic database for the insurance industry, located in Alpharetta, Ga. Insurers who write more than 90% of America’s homeowner’s policies contribute information to it, covering more than 40 million claims records on homes.
Each house has it’s own discrete file that lists all claims or property-damage-related information supplied by local agents over the past five years. Even if the file indicates a zero-payout loss-where the agent learned of damage below the deductible threshold through an innocent inquiry by the homeowner-the file may contain a loss notation on the property record.
To the insurance industry the CLUE database is an invaluable source of risk-prediction information. In the words of Joe Annotti, vice president for public affairs of the National Association of Independent Insurers, CLUE “is just an automated loss history (database) that speeds up the process of underwriting and pricing insurance.” It is nothing more sinister than the 200 million-plus credit files maintained on Americans by the private, national credit repositories-Equifax, Experian, and TransUnion.
But CLUE reports and homeowner insurance scores can also be unseen, leaden weights on houses and their owners. Houses with just a couple of small claims listed on a CLUE Report can suddenly be more difficult to sell. A homeowner who filed a damage claim on her previous property in one state may find her score too low to qualify for insurance on a new house she wants to but in another state.
Both she and her former house may carry insurance stigmas-the new scarlet letters of American real estate- for years. To see a description of the CLUE system and obtain your own home’s current CLUE Report you can go to www.choicetrust.com. The cost online is $12.95. You can also obtain your homeowner’s insurance score for the same price.
Information obtained from: Denver Post 4/27/2003
