If you are a non-life insurance professional, you are undoubtedly aware of the harsh reality that the difficulties of a non-life event are rarely resolved quickly for a policyholder once the flames have been extinguished. Instead, this marks the beginning of the claims management process that can take months or years, with its own challenges. But for some, the end of the claim process may not be the finish line either.
Damage reports made after a loss can have a negative effect on a homeowner’s ability to maintain comparable coverage. The effect can range from a small increase in premiums to the inability to find coverage in the occupied market (this is a more widespread risk in states like California, where some insurance companies have been reluctant to insure homes previously affected by forest fires). As a policyholder or advocate, awareness of this reporting process and knowing how to correct any inaccuracies can be a valuable tool in addition to reporting claims.
Insurance claims are usually reported to one of two databases, LexisNexis CLUE (Comprehensive Loss Underwriting Exchange) or Verisk A-PLUS (Automated Property Loss Underwriting System). Because CLUE is prominent, it has been used as a descriptor for the reports, just as Plaster is used for bandages or Kleenex for tissues. CLUE reports provide a streamlined way for insurers to share claims history and are used to help take out or rate insurance. Reports are used by insurance companies to assess the risk of future losses for a property, and past losses are a key indicator. The reports usually include the policyholder̵7;s name, date of birth, insurance number and claims information up to seven years earlier. The damage information can include the date of loss, type of loss, amount paid for a claim and type of property covered.
Only the insurance companies that subscribe to CLUE may submit and have access to reports. Since few policyholders are aware that CLUE reports exist, it is more likely that errors in the report will be discovered only after premiums have increased or a carrier has not renewed insurance. In states where it is becoming increasingly difficult to find insurance in high-risk areas, this can mean the difference of thousands of dollars per year in premiums, or insurances that do not provide as robust coverage (for examplea FAIR Plan fire policy).
However, policyholders can also access reports on their own properties. Under the Fair Credit Reporting Act, policyholders can request a copy of their CLUE report from LexisNexis by calling (866) 312-8076 or visiting https://personalreports.lexisnexis.com. Together with a free copy every year, policyholders are also entitled to a report if an insurance company makes a negative decision based on information contained in a report. Consumers do not have access to reports for other people’s property.
If you find any inaccuracies when reviewing a report, the Fair Credit Reporting Act offers a formal litigation process. Once a dispute has been received, the reporting authority must:
- Investigate within 30 days (this time may be extended by an additional 15 days if additional information is provided within this initial time period)
- Delete disputed information if the information after review can not be verified, and
- Send a written notice within five days after the investigation is completed.
Alternatively, if there is information that negatively affects a consumer, but the information itself is not incorrect, consumers can make a note to their individual CLUE reports. This can be very beneficial, for example, to inform insurers that the brush that contributed to a previous fire has since been cleared, or when a policyholder settles a dispute with his insurance company, including both contractual and non-contractual damages. do not directly relate to policy benefits. Keep this in mind when signing a release claim, including any form of confidentiality or confidentiality clause. In particular, insurers may not make opinions about your file.
Finally, be aware that state laws may vary. For example, your state may add additional protections and set additional rules related to these reports.