How Long Does a Claim Stay on Your Homeowners Insurance?
Understand how long your homeowners insurance claims affect your coverage and what steps to take to review and manage your insurance profile.
Homeowners often wonder about the long-term implications of filing an insurance claim. The decision to report property damage can feel significant, prompting questions about how such events might be recorded and affect future insurance coverage. Understanding the systems that track these incidents provides clarity for policyholders. This information helps individuals navigate their insurance standing with greater confidence.
Understanding the CLUE Report
A significant record for homeowners insurance is the Comprehensive Loss Underwriting Exchange (CLUE) report. This specialized report details an individual’s personal property claims history, acting as a centralized database for past insurance losses. LexisNexis, a consumer reporting agency, generates and maintains these reports, which include information compiled from insurance companies that subscribe to the service. The CLUE database typically retains up to seven years of personal property claims history. This means that most claims filed within this timeframe will appear on the report, regardless of whether they resulted in a payout.
The CLUE report contains specific details about past claims, including the date of loss, the type of loss (such as fire, water damage, or theft), and the amount paid by the insurer. It also includes policy information like the policyholder’s name, date of birth, policy number, and a description of the covered property, specifically its address for homeowners coverage. This comprehensive data provides a detailed history of property-related incidents.
It is important to distinguish between a mere inquiry and an actual claim. A general discussion with an agent about coverage or a potential loss is an inquiry, and insurers are instructed not to report such conversations to the CLUE database. However, if a homeowner discusses an actual loss with their company or agent, it could be considered reporting a claim, even if no payment is made. For instance, if damage is below the deductible or the policyholder covers the cost, the incident might still be recorded if a claim number was opened.
The report also indicates the claim status, showing if a claim is open or resolved. Only policy information, including loss history, is stored in the CLUE database. Some insurance companies may choose not to subscribe to CLUE, meaning losses filed with those non-participating companies would not appear on a CLUE report.
Obtaining Your CLUE Report
Homeowners are entitled to access their CLUE report to review their claims history. LexisNexis is the primary entity that compiles and provides these reports. The process for obtaining a CLUE report is straightforward and can be compared to requesting a credit report.
Under the Fair Credit Reporting Act (FCRA), individuals are entitled to one free copy of their CLUE report every 12 months. Homeowners can request their report online through the LexisNexis website.
Alternatively, reports can be requested by phone or mail. The LexisNexis Consumer Center can be reached at 1-888-497-0011 for phone requests. When submitting a request, individuals typically need to provide their first name, last name, street address, city, zip code, and date of birth to verify their identity. After an online request is submitted, a letter confirming access details is usually sent via U.S. Mail.
Disputing Inaccuracies on Your Report
Discovering incorrect information on a CLUE report can be concerning, but a formal dispute process exists. If an error is identified, contact LexisNexis directly by phone at 1-888-497-0011 or by mail to the LexisNexis Consumer Center.
When initiating a dispute, provide identifying information, the CLUE report reference number, the associated insurance company’s name, and the claim number. A detailed explanation of the disputed facts and any supporting evidence should also be provided. LexisNexis is obligated under the Fair Credit Reporting Act to investigate the dispute.
LexisNexis will contact the involved insurance company to verify information and obtain supporting documentation. This investigation is typically completed within 30 days. If the CLUE report contains incorrect information, the data will be updated or removed. If the dispute does not lead to a change, individuals can add a personal statement, up to 100 words, to their report. This statement will appear on all future versions of their CLUE report.
How Insurers Utilize Claim Information
Insurance companies use CLUE reports as a fundamental tool in their underwriting process. When an individual applies for new coverage or seeks a quote, insurers request these reports to gain insight into the claims history of the applicant and the property. This allows them to assess the potential risk associated with providing coverage.
Insurers evaluate risk based on the frequency and severity of past claims. Frequency refers to how often claims are filed, while severity relates to the financial cost. A history of frequent claims, even if low in cost, may indicate a higher risk for future claims. This pattern can influence an insurer’s decision to offer a policy or determine the premium.
Different types of claims might be weighed differently in the underwriting process. For example, weather-related claims may be assessed differently than liability claims. While a single, high-severity claim like a major fire might be insurable if rare, frequent smaller claims can be a greater concern. Insurers analyze historical claims data and recent trends to estimate future claim payments when setting rates. This assessment helps them manage financial risk and determine appropriate policy terms and pricing.