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What is CLUE and how does it affect my insurance?



CLUE is short for Comprehensive Loss Underwriting Exchange. What is it? It is a claims history database produced by the consumer reporting agency LexisNexis. In its simplest form, when an auto or property insurance claim occurs, the insurance company paying the claim provides the claim information to LexisNexis (note that the majority of insurance companies participate, but not all). This damage information is then accessed when underwriting and/or rating insurance policies. The following is an example when it is most commonly used.

This is how CLUE is used in insurance

Let̵

7;s say you want to get quotes for your vehicles and home. You contact an agent and provide the requested information. Within the quotation process, the CLUE reports are drawn for both vehicles and property. Entries that have been reported AND paid for are shown. Yes, even if there was no payout, if the claim has been reported to the insurance company, it will show up (good to know).

Claims generally stay on a LEAD for 5-7 years, although many insurance companies only look back 3-5 years.

The agent must then ask for details of what is displayed to determine eligibility, as insurance companies have guidelines for what is acceptable for their programs. Continue for an example of what each LEDT contains.

What you can expect to see in CLUE reports

Let’s start with auto. People are often surprised by the amount of information available, but remember that if an insurance company is trying to determine if you qualify for their car program and what fee they need to charge, they need details. An example follows below.

Claim type Status Paid amount
Collision Closed $5,257.00
Rent compensation Closed $472.00
Total loss amount $5,279.00
Deductible 250 USD

This table shows the type of coverage under which the claim was paid, whether the claim is open or closed, and the dollar payout. It also indicates that a deductible was paid by the insured as part of this claim. SUPER IMPORTANT INFORMATION ALERT: the status is critical here. Most insurance companies do NOT write new policies with an open claim. So if it shows as Open, this may prevent you from getting a new policy. ALSO SUPER IMPORTANT TO KNOW: I mentioned even if the payout was zero, if the clue shows two claims, one with zero payout and the other with one payout, that counts as TWO claims, not one. This can also negatively affect your ability to get insurance.

In addition to the above, the following are also listed: driver involved, type of loss (in this case accident), date of loss, whether or not it is at fault, vehicle involved (including VIN), vehicle operator name, vehicle owner name, policy holder name and a host of internal LexisNexis reference number.

Now for the CLUE property (also called CLUP).

Claim type Status Paid amount
Wind Closed $1,757.00
Total loss amount $1,757.00

The claimant’s name is also listed, along with the date of loss and an internal reference number assigned by LexisNexis. Like CLUE auto, status is critical here. Open claims are not viewed favorably by insurance companies and may prevent you from obtaining a new policy. Also as mentioned above, a zero payout claim still counts as a claim and can negatively affect the ability to get insurance.

What if there is a mistake or error in my CLUE reports?

Unfortunately, as an agent, we have ZERO opportunity to fix a report. Remember that the information comes directly from the insurance company and we have no authority to change it. You must dispute the incorrect information directly with LexisNexis by requesting a description of process letter. You can also see a general description of the dispute process. They will notify the final status as either correct, data correction notice or data deletion notice.

A LITTLE Property and buying a new home

So you’ve made an offer on a home you want, the offer has been accepted, and you’re now on your way to completing the purchase (i.e. closing). You contact your agent (or an agent if you don’t have one yet) and provide all the information about this property. As previously mentioned, the information is entered into the quote software and the CLUE report is run. A claim that occurred two years ago is shown for the property you are buying (often called a ‘risk’ claim as it is linked to a specific property). If insurance companies go back 3-5 years to be eligible, this requirement may be significant. Is the claim closed? If not, then again, it may present problems in purchasing a policy. If it was closed, what was the reason for the claim? Has the damage been repaired? Insurance companies do not want to inherit a problem that could lead to future claims. And you don’t want to take on a problem either. Homes must be well maintained and up to date to be considered.

What if you are not working with an agent, but want to know if a property has had any insurance claims? You can request that the property owner order a CLUP. Similar to a personal credit report, a CLUP can be ordered free of charge once a year.

Why would you want to see a CLUP for a property you want to buy? Simple – you can find out about potential hazards or problems with a property such as mold, water damage, roof damage, fire or sewer/septic issues. Of course, you want to know if the problem has been fixed, the likelihood of the problem occurring and how this changes the negotiations. As mentioned earlier, the number of claims, type of claim and claim status can negatively affect the ability to get insurance, so maybe the property is NOT a good choice.

Why you should care about CLUE reports

As you can see, CLUE reports are quite important in the insurance buying process, as they determine eligibility for a policy, the appropriate premium to charge, and can even influence a larger decision like buying a home.

We are here to help you! If you need help with your auto and home insurance, call us at (937) 592-4871 or fill out the form below.




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