You’re about to buy a new home or new car and you believe you’ve found the perfect one for you. You need to insure your new treasure, but for some reason you can’t find a carrier to cover it. Is there any way you can find out why you seem to be uninsurable? The answer is simple, get clued in with CLUE.
CLUE, also known as Comprehensive Loss Underwriting Exchange, is a database of consumer claims compiled by a company called ChoicePoint that insurance companies access when they are underwriting or rating a Homeowners or Auto insurance policy. An insurer can request a report for a piece of personal property that it is underwriting and receive claims information provided by the insurance companies who previously insured the property. This report also includes details such as the policyholder name, policy number, date of loss, type of loss, amounts paid, and a description of the property covered. The database contains up to five years of personal property claims history.
Under the Fair Credit Reporting Act, ChoicePoint can produce a CLUE report when a person or company intends to use the information in connection with the underwriting of a consumer’s insurance policy. This includes situations where the consumer asks for an insurance quote or applies for insurance; or when the insurance company or agent requests the CLUE report.
Why would an insurance company investigate loss history? Actuarial studies have shown a high correlation exists between a consumer’s prior loss history and future loss potential. This history, along with other factors, can be considered when a company is deciding whether to issue a policy and what premium to charge. It is legal for a company to investigate a prior owner’s loss history in determining your eligibility for coverage.
As a consumer, you are not without rights when it comes to CLUE. Under the Fair Credit Reporting Act, you have a right to see and correct information on your claims history reports. If you have been denied insurance or charged a higher premium, contact ChoicePoint or ISO within 60 days of your denial to request a free report. Otherwise, you will be charged a small fee for your claims history report. You can find more information by logging on to ChoicePoint’s Website.