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After you file a claim, your homeowner's policy is not renewed and you cannot find another company to insure you.
Your automobile insurance premium is raised because you filed for bankruptcy.

Does this sound implausible? Think again. A claim on your homeowner's policy or information that seems to have no bearing on your driving ability can make your premiums skyrocket. Worse, your insurance might even be cancelled.
Claims you file - sometimes even inquiries about your coverage that do not result in a claim - can appear in a little-known database called CLUE or its smaller competitor A-PLUS. And your insurance "score," which is largely based on your credit rating, can determine how much you pay for homeowner's or automobile insurance.

If you've seen your CLUE report and know your insurance score, chances are you've already been turned down for automobile or homeowner's insurance. But probably you, like most others, are clueless about CLUE.

The CLUE report and the insurance scoring system are tools insurers use to decide your risk profile, that is, how likely you are to file a claim against your policy. Insurers feed information about paid claims - perhaps even your inquiries about coverage that do not result in a claim - into a national database for use by insurers. Information included in the database, along with your insurance score, makes up your risk profile. Insurers use the profile to decide whether you get new insurance. At renewal time, your current insurer will probably review your claims history as well as your current insurance score to set your premiums - even to decide if you get to keep the insurance you have. When you shop for new insurance, the company may order a CLUE report. If information is inaccurate, you can be left without insurance while you work to correct the errors.

Many states have recently passed laws to address consumer concerns about CLUE reports and use of insurance scores. Some laws prohibit use of inquiries that do not result in a claim. And some states now require notice when an insurer provides information to a claims database. The subject has become so controversial that the National Association of Insurance Commissioners, as of this writing, is considering a model state code. To learn more, see www.naic.org/committees_d_claims_history.htm. For information on your state's laws, connect to your state insurance commissioner at www.naic.org/state_web_map.htm.

This guide describes property loss databases, insurance scores, how insurers use these predictive tools, your consumer rights, and how you can get a copy of your CLUE report and scores. We also explain your new rights to free reports.

Insurance companies feed information about property loss claims, perhaps even inquiries about coverage, into a central database.
If you file a claim for loss against your homeowner policy, the insurance company adds this information to the national database.
The CLUE database is maintained by an information vendor, not another insurance company.
If you apply for homeowner's insurance with another company - say, you move to another part of the country - the new insurance company can access the CLUE database and learn of your past claims.

The CLUE report also shows the new insurer information about claims you filed under your previous insurer's policy, although nothing filed more than five years ago. CLUE might also include information about inquiries you make, even if a claim was never submitted or paid. To find out if this practice is prohibited in your state, contact your state insurance agency. You can find contact information at www.naic.org/state_web_map.htm

Are CLUE reports only for homeowner's insurance?
No. CLUE reports can cover property loss claims made against automobile insurance policies as well as homeowner's insurance. Automobile and homeowner's claims are maintained in separate databases, and CLUE reports are issued separately based on the type of insurance.

Problems experienced by consumers in the homeowner's insurance market because of errors in CLUE reports have received media attention lately, contributing to the perception that CLUE reports only pertain to homeowner's insurance. In addition, many consumers who are taking advantage of the booming real estate market of late have discovered, often at the eleventh hour, that the property they want to buy or sell comes with its own CLUE report. Reports of water damage included on a home's CLUE report, for example, could blacklist the property, even if the owner never filed a claim and even if the real estate market is hot. Worse, the seller or buyer is not likely to know about errors in the report until the deal falls through.

What does a CLUE report say about me?
The CLUE report includes personal information such as your name, date of birth, and Social Security number. Tied to your identifying information is a record of any auto or homeowner property loss claims you have submitted to an insurance company for the past five years, including:

The CLUE database may also include notations of property "damage" - even if the insurance company didn't pay out a cent. Any hint of water damage to a property, for example, is likely to trigger a negative mark on the property's CLUE report. Well-intentioned consumers who call an insurer to merely inquire about coverage for water damage have been shocked to have their insurance cancelled. Your chance to get new insurance at a good rate could be affected. (Note: Your state may not allow reports to include inquires that did not result in a paid claim. California has such a restrictions (CA Insurance Code 791.13(c). Contact your state insurance commissioner to find out what applies in your state. www.naic.org/state_web_map.htm)

How long does information stay on the CLUE report?
Five years from the date the loss is reported. This may include losses for a property before you owned it.

Is my credit history included in a CLUE report?
Only information about property loss claims made against homeowner's or automobile policies is included in the CLUE database. Information from the CLUE database plus your risk score make up the complete insurance risk profile. However, your credit history can play an important part in an insurance company's judgment about your risk potential.

Why do insurers use CLUE reports?
CLUE reports are a way for insurers to share information about your record of filing insurance claims. Insurance companies are by nature in the business of assuming risk. The more that a company pays in property claims, the less it profits. CLUE reports are one of the ways an insurer assesses how much of a risk it is assuming by selling you an insurance policy.

The theory is that an individual's history of filing insurance claims is a good indicator of how likely that person is to file future claims. Taken to the extreme, this process of risk analysis translates to "use it and lose it. " If you file a claim against your policy, report damage without filing a claim, or even inquire about your coverage, you may not get new insurance at a good rate - or at all.