Q. What is a CLUE Report?
A. CLUE stands for Comprehensive Loss Underwriting
Exchange. It is a comprehensive database of personal property information
relating mainly to insurance claims on private property. CLUE was developed
by, and is currently operated by, ChoicePoint Asset Co., a Georgia firm.
Q. What type of information is found on a CLUE report?
A. The CLUE report contains information about either an insured or a
property. This includes general information about the insured such as name,
birth date, and sex, as well as current and previous addresses.
The key information on the report is the claims history of the individual or
the property.
This section includes a list of all claims made in the last 7 years.
The claim history report includes the date of the claim, the name of the
insurance company involved, policy number, claim number, address, cause of
loss, amounts paid, status of the claim, and the name of the insured and the
claimant.
The report also identifies parties that have received a copy of the
report, typically over the most recent 2 years.
It is important to note that the CLUE report details the "claim history" of
a given consumer.
Many consumers have been surprised to find that such history may include
virtually any call made to an insurance representative regarding a loss,
whether or not a claim for compensation is actually filed.
Thus, experts warn consumers to think twice seriously about their
deductible, coverage and other factors before calling an insurance
representative.
Adverse information that is more than seven years old generally may
not be reported. .
Q. Who determines what information is put on the report?
While ChoicePoint compiles the information from all the contributors and
maintains the database, the information on the report comes directly from
insurance providers who give information on claims to ChoicePoint.
ChoicePoint clearly states that "they do not change the substance of any
claims information unless directed to by the insurance company that
contributed the data."
Q. What is the mechanism for challenging incorrect information found
on the report?
ChoicePoint is considered a consumer reporting agency under the Federal
Fair Credit Reporting Act ("FCRA") and its state counterparts. Under the
terms of the FCRA, a consumer can dispute items on the report with the
source of the information.
ChoicePoint claims that it is "eager to help you clarify or amend your
CLUE report." However, it also notes that in regards to disputed claims it
will verify the consumer's claim of a mistake with the insurance company.
Thus, the ultimate decision on whether an item is a mistake may lie with the
insurance company that handled the claim. However, under the terms of the
FRCA, once a mistake is verified, ChoicePoint is legally obligated to remove
it from the report. ChoicePoint also offers a consumer a chance to offer a
personal statement explaining any items he or she feels deserve an
explanation.
Q. Who, besides the individual owner of a property, has access to CLUE
Reports?
A. Insurance companies. CLUE is used by insurance companies for
evaluating potential customers. Only insurance companies that provide
information to ChoicePoint on claims made by their current policy-holders
are allowed to access the CLUE database which contains the claims
information from all other participating providers. Currently, approximately
90 percent of American insurance companies participate in the service.
Under the FCRA, ChoicePoint may only furnish reports to entities it
believes will use the information for underwriting purposes related to the
individual consumer whose report was requested. Parties (other than owners)
requesting reports from ChoicePoint must certify that they intend to use the
information for permissible purposes such as insurance underwriting only.
Q. How can a CLUE report pose problems for homeowners or future
homeowners?
A. When faced with a prospective insured, insurance providers use the
CLUE database to find out information not only about the customer, but also
about the residence to be covered. Often this will cause problems for
homeowners who have recently purchased a property. If they assume they will
be able to get insurance easily because they always have had coverage and
have never made any claims, they may be surprised when they are turned down
based on claims made on their new property by the previous owners.
Therefore, many realtors are increasingly requiring a copy of the
seller's CLUE report as a condition for closing.
Experts suggest that filing 2 claims within 3 years will subject an
individual consumer or home to significant risk of being rejected by
insurance carriers. However, even more damaging to the ability to get
insurance for a given property is the presence of water-related claims.
Insurance companies have responded to a recent surge in water and mold
related claims by drastically cutting back on coverage for water damage and
increasing premiums for properties with past claims for water damage.
