Get a 'CLUE' Report If Your Home and Car Insurance Rates Seem Too High

Both auto and homeowners insurance rates have soared in recent years. The average homeowners insurance policy costs $231 per month, and the average person is paying nearly $600 a year for minimum auto coverage (and more than $2,000 a year for full coverage). But just because insurance has gotten pretty expensive for everyone doesn’t mean you should just accept the premiums you’re paying. If your insurance costs are draining your bank account, you should make sure your rates are being calculated fairly. You can start by requesting a copy of your Comprehensive Loss Underwriting Exchange (CLUE) report.

What is a CLUE report?

A CLUE report is basically a record of all insurance claims made on a property or automobile in the last seven years, plus a “risk score.” The CLUE report is a product of LexisNexis and is used by almost all insurers to determine your rates to insure your home or car. The report will contain the date of any claim, the insurance companies involved, the policyholder’s personal info, the type of loss, and the outcome of the claim (as well as any amount paid out).

Insurers can use this information to decide how risky insuring that piece of property will be. If you (and/or previous owners) have filed several water damage claims for your house, for example, your insurer might decide the risk is too high and jack up your rates. If your car has been stolen and damaged several times, your insurer might charge more for full coverage because it’s more likely to happen again.

CLUE reports don’t always increase premiums. If there is a claim for a replaced roof on your house, for example, your insurer might conclude you’re less likely to file a claim in the near future, and lower your rates as a result. But if your insurance rates are higher than expected, or have risen sharply recently, your CLUE report might be the key—because just like credit reports, CLUE reports can be inaccurate.

How to get a CLUE report

You have a right to a copy of your CLUE reports—they’re covered by the same law that gives you access to your credit reports and checking account reports, the Fair Credit Reporting Act of 1970. You can request a free copy of the CLUE report for each property every year. Once you receive the report, you should review it carefully to ensure that all the information is accurate. While you may not be able to verify claims made by previous owners, you can at least make sure that anything listed since you took ownership is accurate. If it isn’t, you can ask LexisNexis to correct the report. You can also add notes to your CLUE reports that provide context or additional information to insurers. Both of these actions might result in lower rates, especially if you have erroneous claims removed from the report.

CLUE reports are also useful when you’re in the market for a new car or house. You can’t get a CLUE for stuff you don’t actually own yet, but you can ask the current owner to provide a copy. You can use the report the same way the insurance company does, by assessing your risk. If the house you’re considering has had multiple mold remediation claims in the last seven years, for example, you might decide the risk is too great and walk away.

You can’t avoid risk entirely, of course—or get insurance for free. But reviewing your CLUE reports can ensure you’re paying a fair rate for insurance, and it may protect you from buying the wrong car or house.