How does a CLUE report impact your insurance premiums?
Insurance companies usually request a Comprehensive Loss Underwriting Exchange (CLUE) report when determining coverage and premiums for a property or vehicle.
Insurers primarily use CLUE reports, but consumers can request them to verify their accuracy or obtain information about a property they're interested in purchasing.
CLUE reports contain important information about your driving history and can affect your insurance rates.
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What is a CLUE report?
LexisNexis generates CLUE reports that detail insurance claims made on a specific property or vehicle over the past seven years to assist insurers in making decisions regarding coverage, the amount of coverage to provide, and the premiums to charge.
According to LexisNexis, over 95% of home insurance companies and more than 99% of auto insurers use CLUE reports.
The information in the files is diverse and pertinent to the policyholder's claims and basic data at the time of the claim.
- Insurance company
- Policyholder's personal information and policy number
- Date of losses and claims
- Type of loss (water damage, fire, etc.)
- If the claim was denied
- Amount paid on the claim if approved
The Wisconsin Office of the Commissioner of Insurance states that policyholders can add notations to their CLUE reports, such as if a homeowner gets rid of a dog after a dog-bite claim.
LexisNexis introduced C.L.U.E. Auto 360 in 2023, which includes data from police records and other vehicle-specific sources beyond insurance claims to show damage.
How to get a CLUE report
Individuals have the right to obtain a free CLUE report for their property or vehicle annually under the Fair Credit Reporting Act of 1970. Reports can be requested online, by phone, or by mail. To obtain a report, individuals must provide their full name, date of birth, address, city, state, and zip code, along with their Social Security number and driver's license number.
If you want to request a CLUE report for a property or vehicle, you must be the owner. However, if you're purchasing a house or used car, the current owner can provide you with the CLUE report.
LexisNexis allows consumers to challenge inaccurate information in their reports.
Although a CLUE report may not contain any claims, it doesn't necessarily mean that there have been no claims. It's possible that the policyholder paid out of pocket to repair problems with their car or house, or that some insurers don't report claims to LexisNexis.
How does a CLUE report affect your insurance rates?
CLUE reports are used by insurers to assess the likelihood of future claims being filed. A CLUE Property report includes prior losses from previous homeowners, while a CLUE Auto report does the same for used vehicles.
The Office of the Commissioner of Insurance allows companies to use a previous owner's loss history to determine coverage and rates. Lexis-Nexis suggests that a claim for theft may indicate a car is at risk of being stolen again, while a claim for fire damage may suggest a home is in a wildfire zone.
While more claims generally result in higher premiums, certain claims, such as those for a new roof or replacement tires, may suggest lower future repair costs and lead to reduced rates.
When contacting your insurer, make sure to specify whether you are filing a claim or simply making an inquiry to ensure an accurate report. Even a minor inquiry may be recorded in your CLUE report and affect your insurance rates.
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How to use your CLUE report
When shopping for insurance
Ensure the accuracy of your CLUE report before applying for insurance by disputing any errors with LexisNexis.
Before selling your home or car
A CLUE report can provide a prospective buyer with information about the condition of a property or vehicle, including any necessary insurance costs, as well as recent improvements such as a roof replacement or security system installation.
When buying a home
When determining how much house you can afford, it is important to factor in insurance costs. A CLUE report can provide information on any issues with a property and expected policy costs. Buyers cannot request a CLUE report from Lexis-Nexis but can ask the current owner for the CLUE Home Seller's Disclosure. PNC Bank offers adjustable- and fixed-rate conventional mortgages, as well as FHA, VA and USDA loans. Eligible homebuyers can put as little as 3% down without private mortgage insurance and qualify for grants of up to $5,000 to help cover closing costs.
When buying a used car
A preowned vehicle's CLUE report can reveal its repair history and potential insurance risks. If a car has no claims in the past seven years, it may lead to lower insurance rates for you.
Geico provides among the lowest auto insurance rates in the market and offers various discounts, including those for students, safe drivers, anti-theft devices, and a multi-car discount of up to 25%.
Nationwide is one of the few top insurers to offer a pay-per-mile policy and a safe-driving discount worth up to 40%, and it has a very low number of consumer complaints compared to similar carriers, according to the National Association of Insurance Commissioners.
Bottom line
CLUE reports not only offer valuable information for insurance companies, but they can also assist buyers in understanding more about a car or home. As CLUE reports can affect your insurance rates, it is crucial to review them regularly to ensure the accuracy of the information.
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