Clueless About CLUE

Professor Plum, in the lounge with the dagger.  Remember playing that detective game as a kid?  It's been around since 1949.

There's a newer version of CLUE that plays a vital role in determining the rate of your home or property insurance.  "CLUE" - "Comprehensive Loss Underwriting Exchange" has been around since the early 1980's and has really "taken off" in the last ten years.

Much like credit-scores, insurance companies run CLUE reports to properly assess the level of risk they will be insuring.  However, unlike credit scores, most consumers are not even aware of their CLUE report.

Did you know that anytime a potential property claim is submitted to an insurance company, that information is reported to an independent firm that compiles this info for the entire insurance world to access?  When you request a quote from any insurance company on your property, no matter what you tell them regarding claims, the CLUE report will reveal all....and more.

Remember when you called your agent to discuss how your absent-minded spouse let the sink overflow, again, damaging the ceiling below?  It was decided that you should not submit this second claim since the insurance company just paid $5000 for the first overflow.  Unbeknownst to you, your agent had a duty to tell the insurance company about the claim who in turn had a duty to report it to CLUE.  Now, all underwriters know about your propensity to have water damage claims.

Let's play this game a step further.  CLUE is a report on the property, not on you.  When purchasing a new home, you may be shocked to find that the insurance company wants to charge more premium than you expected.  The CLUE report reveals that there is a history of property claims on the home...before you even own it!

Finally, when you submit a claim and the actual payout is less than your policy deductible, it will still be on your CLUE and, believe it or not, has been known to be "held" against you.

This type of information or "misinformation" can have an adverse affect on your insurance premium.  In addition, CLUE reports have been known to trigger non-renewals of insurance from a current company and refusals to quote from prospective companies.

(By the way, similar CLUE reports exist for auto insurance claims as well.)

In the board game, Clue, players make "suggestions" as to who committed the crime. With that in mind, let me suggest some tips for handling your CLUE:

• Annually request your free copy of your CLUE report.
• Verify the information on your annual report.
• Think very carefully about reporting claims.  Your agent has a duty to report any potential claims.
• Before purchasing a new home, ask the Realtor to provide a CLUE report on the home.
• Visit Privacy Rights Clearinghouse for more information about "CLUE and You:  How Insurers Size You Up"
• Talk to your agent for specific information about your insurance situation.

Keep in mind that CLUE is only one of the tools that insurance companies use to adequately determine rates.   

Had no clue, did you, Colonel Mustard?