CLUE Report: What It is, How It Works, Obtaining a Copy

What Is a CLUE Report?

The Comprehensive Loss Underwriting Exchange (CLUE) report details a seven-year period of personal auto and property claims. Insurance companies use CLUE reports, generated by LexisNexis, in the underwriting process and to determine premiums. The report includes the insured's personal information, policy number, type and date of loss, claim status, amount paid, and insured property or vehicle information.

CLUE Report Explained

Insurance companies have specific guidelines for determining rates, and claims' history is one influencing factor. Some items appearing on a CLUE report can both positively or negatively affect the rating. For example, a roof replaced due to hail damage can adversely affect a rating because the claim serves as an indicator of an insurer's future liability. On the positive side, a new roof lessens the risk associated with underwriting insurance on the home. Whether the positive benefit supersedes or offsets the negative depends on the insurer.

Homebuyers use a property’s CLUE report to identify problems, which can compromise their ability to obtain insurance for the home or insure it for a reasonable cost. For example, the CLUE report could distinguish if the property had fire or flood damage or had been the victim of burglary. The information from a CLUE report empowers the buyer to make an informed decision about their purchase.

Obtaining a Copy of a CLUE Report

Only homeowners and insurers can order CLUE reports. Sellers can order a special version called a CLUE Home Seller’s Disclosure Report, which safeguards the owner's personal information and shows a five-year loss history for the property. A report with no losses offers potential buyers peace of mind and attributes credibility to the seller. Under the Fair Credit Reporting Act (FCRA), a free copy of the CLUE or CLUE Home Seller's Disclosure report can be requested annually. To contest information on the summary, consumers should file a dispute with LexisNexis. Incorrect information could negatively impact insurance rates.

A CLUE report contains both a home’s history of claims and the individual owner’s record of filed claims. Insurance providers use this information to set premiums, determine coverage levels, or, in some cases, deny insurance. If denied, the insurance company must explain the reason. Insurers use claims history to predict the risk of future claims, which tends to be higher when previous claims were filed. As an incentive to the insured and to reduce risk, some insurers offer claim-free discounts.

A homeowner’s credit score can also affect homeowners insurance premiums. Many studies show that people with compromised credit are more likely to file insurance claims than people with fair or good credit. Also, the home’s location, age, and construction type will affect premiums.