The vast majority of consumers are unaware about something called the Comprehensive Loss Underwriting Exchange (C.L.U.E) database, which plays a major role in the cost of their home and auto insurance premiums, according to a new study by insuranceQuotes.
The survey found that an astonishing 86 percent of Americans are unaware that insurance companies typically use their clients’ history of payments and claims when it comes to setting premiums on new policies, and insuranceQuotes warns that this lack of knowledge is impacting consumers.
The C.L.U.E. database is maintained by LexisNexis Risk Solutions, and is used by the vast majority of American insurers to check on the claims history of both homeowners and drivers, the report says. It further warns that even asking your insurer a few simple questions could well lead to higher premiums.
“Consumers of all ages, from Millennials to seniors, are almost entirely unaware of how the C.L.U.E. database affects their insurance rates,” said Laura Adams, senior insurance analyst at insuranceQuotes. “In most states, an inquiry about property damage can be added to your C.L.U.E. report and used against you, even if you never file a claim.”
Despite this, the C.L.U.E. database does have some uses for home buyers, who are also entitled to access it. By asking for a report on a property they’re interested in purchasing, they can see the entire claims history for that property, and gain insights into its state of repair.
Unfortunately, the survey found that just five percent of homeowners are familiar with the C.L.U.E. database and how it works. Furthermore, just 12 percent of homeowners said they had asked for a copy of their C.L.U.E. report before purchasing their homes.
“The C.L.U.E. report, which maintains data up to seven years, is a valuable tool for home buyers because it reveals prior claims and potential risks. It also helps home sellers provide full disclosure about their property’s condition,” added Adams.
insuranceQuotes adds that only property owners can ask for a C.L.U.E. report. However, potential buyers can ask sellers to obtain a copy of the report, which is available for free once every 12 months, prior to placing a bid.