Money Girl explains how little-known CLUE reports affect what you have to pay for insurance.
If you’re a regular Money Girl reader or podcast listener, you know that you have a credit report that shows how you handle your credit accounts. But if you’re like most consumers, you’ve probably never heard of your CLUE report.
While it sounds like something used by a private investigator, it actually plays a critical role in how much you have to pay for insurance.
In this episode I’ll take the mystery out of these little-known CLUE reports by telling you what they are, why insurers use them, and how to keep yours clean, so you pay less for insurance.
What Is a CLUE Report?
CLUE is short for Comprehensive Loss Underwriting Exchange, which is the most commonly used database of insurance claims in the industry. There’s one report for home insurance claims and another for your auto claims, filed in the past 7 years.
The reports also include general information about you, such as you name, gender, birth date, and address.
How Are CLUE Reports Used?
Insurance companies that contribute information to the CLUE database are allowed to use it to investigate your claims history and factor in the information to set your rate.
For instance, let’s say you apply for auto insurance with a new company. If they see that you made several claims over the past few years with your previous company, they may view you as a high risk for filing more claims in the future and charge you a higher premium.
How much more do you have to pay? Each insurer weighs information on your CLUE report differently. However, a study by insuranceQuotes.com shows that filing even one home insurance claim can raise your rate 21%, depending on where you live. Click here to see the average rate increases in your state.