Almost everyone has heard of the term FICO scoresand how they impact one’s ability to get a home loan. But, did you know that there is an almost equally important scoring/rating system called a C.L.U.E. (Comprehensive Loss Underwriting Exchange) report that can dramatically impact your ability to buy and sell a home, get homeowners insurance as well as such things as automobile insurance rates?
I learned about them years ago, the hard way, when my homeowners insurance renewal was denied because of one small claim which I didn’t even need to file! I couldn’t believe that my insurance broker didn’t warn me not to make such a small claim! I ended up having to use Lloyd’s of London coverage for several years.
So, here are a few facts I gathered from Privacy Rights Clearinghouse which should motivate you to learn more about your C.L.U.E report:
- Insurance scores are also based largely on credit history, but the characteristics fed into the insurance scores are supposed to predict how likely you are to file an insurance claim.
- After you file a claim, your homeowner’s policy may not be renewed and you may not find another company to insure you. (And, as in my case, you may not be told this by your insurance company when you make the claim!)
- Your automobile insurance premium may be raised because you file for bankruptcy.
- Information stays on your C.L.U.E report for 5 years!
- Your credit history can play an important part in an insurance company’s judgement about your risk potential.
- Inaccurate information can be included in the report including information about someone else or another property.
- A report may use information other than claims data to rate you as a risk.
- Your phone calls to inquire about a possible claim may be reported and lower your score.
- Even when repairs are made and the property is restored to the original condition, the C.L.U.E. report can include information about the claim.
- The report can affect the premium you pay as well as whether you are insured at all.
- Your history as a long-time customer with your prior company is NOT a factor of the C.L.U.E. report.
- Annual privacy notices from financial institutions and insurance companies do not have to explain that the company shares your information with the C.L.U.E. database.
- The insurer assigns you a score based largely upon your credit history.
- You are entitled to get a copy of your C.L.U.E. report and your insurance score and may dispute errors in the C.L.U.E report
I recommend to all of my sellers that they get a C.L.U.E. report when we list their property. If they have had any claims in the past 5 years, this may impact the future buyer’s ability to get insurance so it is best to know this up front. Prior water/moisture related claims as simple as a broken pipe that led to flooding and has since been repaired may make obtaining insurance on that property either very expensive or impossible! In California, getting a C.L.U.E. report was a mandatory part of our listing process.
It is also very important that buyers apply for homeowners insurance as soon as possible after the purchase contract is signed. Think of it as a part of your loan process like getting a credit report.
To get a C.L.U.E report, go to ChoiceTrust. Choice Trust will provide a C.L.U.E Personal Property Report with a 5-year history of losses associated with an individual and his/her personal property as well as a Home Seller’s Disclosure Report which provides loss information about a given address which can be given to potential buyers.
If you have any questions please email or “comment” and I will either provide the answers or refer you to someone who can do so!