CLUE Reports | The bank rate
Insurance companies use your claim history as a factor in determining how much you will pay for home and auto insurance. A Full Loss Guarantee Exchange (CLUE) report discloses all insurance claims made by a policyholder over the past several years on your home or potential vehicle. For example, a CLUE report will show if an insured has filed a damage claim after a storm or fire, or if the car has been involved in an accident.
What is a CLUE report and how does it work?
CLUE reports compile the insurance history of a location or vehicle. The report will contain details of all insurance claims made in the past 5-7 years, regardless of size. There are two types of CLUE reports: one for home insurance claims and one for auto insurance claims.
Asking for a CLUE report before buying a home can help you know what to expect when applying for home insurance. While claims from previous owners shouldn’t affect your premium, knowing what claims have already been filed on the home can help you, as a potential buyer, determine if there might be any hidden damage that needs to be addressed. before finalizing the purchase.
CLUE reports can be of benefit to buyers by helping to ensure that a particular home is the right choice. Claims with large payments or repeated claims can be a red flag to potential buyers that the property is prone to damage. However, CLUE reports can also provide positive news. If a claim payment has funded new roofing or new windows as a result of a natural disaster, the potential buyer can be reassured that those areas of the home are in good condition for years to come.
How is a CLUE report generated?
Only homeowners and insurers can officially request a CLUE report, but you can request a copy from the seller to learn more about a property’s history. Most home insurance companies provide claim history information to the CLUE database, which is maintained by the research company LexisNexis. When a homeowner files an insurance claim for incidents such as water damage, fire damage, or criminal activity on the property, for example, most reports from insurance companies have gone into the CLUE database.
Your insurance company uses the information from the CLUE report as a guide to setting insurance rates for your new home. While claims filed by previous home owners shouldn’t affect your insurance premium, claims you filed on your old homes could. This is because in the eyes of an insurer, if you have filed a claim in the past, you are more likely to do so again in the future.
What does a CLUE report contain?
Whether it’s set up by an insurer as part of the underwriting process or you request your own CLUE report from the landlord, it should include the following for all home and auto claims the person has filed:
- Name of insurance company
- Date of any loss and claim
- The type of loss – fire, wind damage, etc.
- Whether the request was refused or not
- If the claim was not denied, the amount the insurer paid
- Home insurance policy number and claim number
The report will not include details, such as which part of the house was damaged, but if you are buying a house, it will give you enough information to ask the owner to explain the details. CLUE reports also typically include the property’s address as well as some information about the policy owner, including their name and policy number.
What if a CLUE report is empty?
CLUE reports typically provide homebuyers with useful information regarding the condition of a property and the history of claims. However, you may find that a CLUE report is empty. While a blank report can be confusing or worrying, it actually indicates one of two things:
- The owner has not made any insurance claims in recent years.
- The single-family home was covered by an insurance company that does not report claims to LexisNexis, so claims will not appear on CLUE reports.
Claims listed in CLUE reports typically cover the last 5-7 years. From time to time, you will find that no claims have been made within this time frame. However, a blank CLUE report does not necessarily mean that no damage has occurred to the location, just that no insurance claims have been filed. The owner may have taken the damage out of pocket rather than filing a claim. Additionally, not all insurance companies use the required database for CLUE reports. In these cases, a requested CLUE report may return empty.
How to get a copy of a CLUE report
Thanks to the Fair Credit Reporting Act, you can get a free CLUE report for your home once a year from LexisNexis. To access a CLUE report, you can:
- Request a CLUE report online
- Call 888-497-0011
- Send an email to [email protected]
- Request a copy from an owner (if you are a potential buyer)
If you are selling your home, it may be beneficial to have a CLUE report available to show potential buyers, especially if it’s empty because you haven’t filed any insurance claims in the past. Even if you are not in the market to sell your home, you may want to get a CLUE report to check for any inaccuracies as the information can affect your insurance rate.
What to do with a CLUE report
Once you have a CLUE report in hand, the first thing to do is read it carefully. This goes for the CLUE report for your own home and the reports for the homes you are considering purchasing. Past claims, especially multiple claims, could indicate that a home has the potential for future claims. Claims can also be used to assess how the physical location of the property may affect premiums. For example, if the house is near water or known to be frequently flooded, insurance may cost more or indicate the need for additional flood insurance.
However, a recent claim on a home may not immediately be a dealbreaker. In fact, a property with a recent claim can have positive ramifications if the damage has been handled properly, said Michael Barry, senior vice president, head of media and public affairs, at the Insurance Information Institute.
Ultimately, it may pay off to review your CLUE report before shopping for insurance. If you find any inaccurate information, it would be beneficial to correct it. Incorrect information about a past claim can make you appear riskier in the eyes of insurers, thereby increasing your future insurance rates. If you find any inaccuracies in your home’s CLUE report, you can dispute the information with LexisNexis using the contact details provided above.
How CLUE Reports Affect Your Home Insurance
A CLUE report can have a positive or negative impact on your insurance premium. Since most insurance companies report to LexisNexis, you can be pretty sure the ratio is a good indicator of how healthy your home is.
Each insurer will have their own methodology for determining rates, so it can be helpful to know how different CLUE report results may affect your premium. If you’ve made a claim for damage from a hurricane or windstorm, for example, insurers may assume there’s a better-than-average chance that you’ll do it again. To account for this probability, they can increase your premium. Allegations of theft and vandalism that appear on your report can also negatively impact your rate.
CLUE reports can also bring good news. Indications that the losses have been properly managed, such as a new roof put in place after a hailstorm, can offer peace of mind to potential buyers. Additionally, a CLUE without a claim can be used as a positive marketing message if you are selling your home.
A CLUE report is not an inspection
With a CLUE report, domestic disasters or incidents in the past can be revealed, but this is not the only way to assess damage. Potential buyers should use the CLUE report to notify their home inspector of any repairs made, said Karl Newman, president of the NW Insurance Council in Seattle, so the inspector can make sure the job was done correctly.
It should be noted that a CLUE report is not a substitute for a home inspection, as it does not contain the details that allow you to determine exactly where issues might be occurring. A home inspection is considerably more in-depth and provides additional information beyond what a CLUE report offers.
A CLUE report doesn’t give a score or recommendations, Newman said. “It’s an additional tool to assess the home and the cost of home insurance,” he said. It simply indicates what insurance claims have been filed in the past few years. It does not take the place of inspection or disclosure by the seller.
Frequently Asked Questions
How long do complaints stay in a CLUE report?
Claims typically remain on a CLUE report 5-7 years from the date of filing.
Can a CLUE report help a seller?
A seller with a blank CLUE report indicates that no insurance claims have been filed and can give a buyer confidence in the quality of the property.
What are some things that are not in a CLUE report?
A CLUE report does not include credit reports, criminal records, criminal records, or eviction notices.
Can I dispute the contents of a CLUE report?
LexisNexis has a dispute resolution process if you need to dispute something on your CLUE report. To file a dispute, call 888-497-0011 or write to the LexisNexis Consumer Center, PO Box 105108, Atlanta, GA 30348.
Can I view my CLUE report online?
You can submit your CLUE report request electronically, but to view the report online you must wait for the letter from LexisNexis providing the access information.
How does a CLUE report differ for auto and home insurance?
A CLUE report for auto insurance provides information about the claims filed for a given vehicle, including the name of the driver and policyholder, the policy number, the date a claim was filed, from what date. type of claim it was (collision or liability, for example) and how much was paid under each coverage. It may also contain the VIN and the make and model of the vehicle involved in the accident. A home CLUE report contains the named insured and their date of birth, as well as any claims made against the property and the amount that was paid. Both reports will generally indicate whether the complaints listed are open or resolved.