Many drivers don't know exactly how their CLUE report affects their eligibility for car insurance coverage until it's too late and they've been denied coverage. To protect yourself against ending up in a situation where you can't get auto insurance coverage, you'll want to educate yourself about how insurance risk is determined.
What is a CLUE Report?
Your CLUE (Comprehensive Loss Underwriting Exchange) report is a database report of all insurance claims you have filed. Most drivers don't realize their CLUE report consists of both auto insurance claims and personal property insurance claims, meaning your homeowner's insurance claim you recently filed is probably affecting your car insurance coverage eligibility and rates.
What Exactly is in Your CLUE Report?
Your name, birth date, social security number and any insurance claims on personal property are recorded in the report. The name of the insurance company involved and the amount paid out is also included. Inquiries into claims may also be recorded, as well as claims filed but not paid out.
Why is This Information Recorded?
Many drivers are puzzled as to how their car insurance coverage is tied to their property insurance claims. This is because the CLUE report serves insurance companies in general, and your insurance claim record indicates how high of a risk you are over all. Insurance companies want to know how much their predecessors have had to pay out in claims to you in the past so they can estimate how much in claims they may have to pay out in exchange for providing car insurance coverage. Your risk rate determines how much they need to charge you in premiums to protect themselves from loss.
Why Should You Get a Copy of Your CLUE Report?
There are several things that can go wrong on a CLUE report. The biggest concern is if someone else's claims have been filed on your report. You will want to check your CLUE report to make sure all the claims are really yours, especially if you have a common name. You will also want to make sure the severity of the claims recorded jives with the claims you know you have filed. This counts even for claims you filed but were not paid for, since a large claim request (and denial) may send up a red flag for potential insurers. You can dispute claims that you believe have been added to your file erroneously, thereby cleaning up your report and improving your chances for lower auto insurance rates.
Now that you understand how your CLUE report affects your auto insurance coverage, you may want to take appropriate action to protect yourself.