Just asking about an insurance claim can make your rate go up

By: Jonnelle Marte, The Washington PostMost people know that filing frequent insurance claims can lead to a spike in what they pay for coverage.But many probably don’t realize that just asking an insurance agent about a potential claim can also affect rates — even if the claim is never filed.That’s because claims and inquiries about claims for car and home insurance policies get tracked in a database that many consumers have never heard of: the Comprehensive Loss Underwriting Exchange report, also known as the CLUE report.Only 1 percent of people were very familiar with CLUE reports, according to a survey released Monday by insuranceQuotes.com, a Web site that helps consumers compare insurance quotes. Another 7 percent said they were somewhat familiar. The survey of 1,000 people was done in mid-November by Princeton Survey Research Associates International.Claims are stored for seven years in CLUE reports, which are reviewed by insurance companies that want to know more about the property and the people they’re covering. The reports include information such as a person’s name, birth date, the type of loss, the amount paid by the company and a description of the car or house.Insurance companies add information to the file when they pay out money, deny a claim and set up a file for a possible claim. By not knowing how the reports work or are used, many consumers can put themselves at risk of paying higher rates for insurance.For instance, only 17 percent of the people surveyed were aware that insurance claims filed by a previous homeowner could affect what the current owner has to pay for coverage, according to the report from insuranceQuotes.com. That’s because CLUE reports keep track of the claims filed on a particular home.It’s up to the insurance companies to use — or not use — the reports when setting rates, says Laura Adams, a senior analyst for insuranceQuotes.com. The reports can give them an idea of what condition the property is in and what risks they might face in covering it.Take a home that was damaged in an electrical fire, says Jeanne Salvatore, a consumer spokesperson for the Insurance Information Institute, an industry group. If the home’s wiring was replaced after the claim was filed, the insurance company may be able to offer a more affordable rate knowing that the home is in better condition, she says. But if the report shows that the issue wasn’t addressed, the new homeowner may have to make the repair or pay a higher price, she says.People looking to buy a home or car should check the CLUE report attached to the property and dispute any mistakes before signing up for insurance, Adams recommends. Home buyers should also ask the seller for a copy of their home claims report before making an offer, she adds, but only 10 percent have done so, the survey found.Consumers can request one free CLUE report every 12 months online through LexisNexis.