There can be several answers to these questions, but one of them is based on your CLUE Report. A CLUE Report, or Comprehensive Loss Underwriting Exchange Report, is a report that shows all relevant claims and losses when an insurance company is determining the premium amount.

What is a CLUE Report?

Most people are aware that filing claims can have an effect on insurance rates in the future, but how will other insurance companies know about your claim history? Any time there is a claim filed, it is reported to a central entity that holds all claim information. When you shop your insurance with a different company, they will pull a CLUE Report to check the risk level of the person and the property to be insured. Typically, the CLUE Report will populate data for any claims or losses in the past three or five years depending on the company, and contrary to popular belief, the report will bring forth data about claims that the insured has filed as well as any claims that have filed on the property that is being insured. This means that someone buying a home can potentially be impacted by claims that happened in the home before them owning it.

Why Do Claims Affect Your Rate?

Insurance companies have tons of rating factors that lead them in their decisions when calculating premiums. Most of these factors are directly related to the insurance company’s perceived probability and severity of a potential claim. One thing that is typically an indicator of future claim activity is past claim activity. When comparing someone who has a clean history with no claims or losses, or a client who has multiple claims in the past 3 years, insurance companies will infer that the individual with the clean record will have a lower probability of filing claims, which could result in a lower premium. The same rings true for a home with no prior claims. A house with prior claims is usually more likely to have unknown damage that will cause more damage in the future. This is why it is important to consider claims from the insured as well as the property. CLUE report activity can have an impact on your rate, but it can also affect eligibility. Most insurance companies have a maximum number of claims that they will accept. If the CLUE report comes back with an ineligible number of claims, the insurance company will deny coverage altogether. These impacts are not limited only to new insurance policies. Typically, your current insurance company will run a CLUE report each year at renewal. This is why insurance tends to get more expensive on the renewal after a claim. If there are enough claims for the insurance company to deem them excessive, they may even decide not to offer a renewal policy.

Keeping Your CLUE Report Clean

It's crucial to keep your CLUE Report clean, but it doesn't mean that you should avoid filing an insurance claim entirely. Insurance is designed to support during emergencies, and it's necessary to use it when needed. However, the key is to keep your record free from unnecessary claims by only filing them when necessary. One mistake that homeowners often make is not assessing the situation themselves before contacting the insurance company. Here are a few claim scenarios to illustrate this point.

  • Claim Scenario 1: Jean is in his kitchen cooking dinner while his kids play outside. He hears a crashing sound coming from the other room when his kids hit a ball through a large window in the living room. Jean is frustrated and calls his current homeowners insurance company to start a claim immediately. Soon, Jean learns that his deductible is $2,000 and the window will only cost $300 to replace, so his insurance company will not pay out. While there is no payout, the claim was opened and will show on any CLUE Report pulled on him or his home for the next three to five years.
  • Claim Scenario 2: Jessica walks into her home and notices that there is a leak coming from behind the wall in her kitchen. She immediately turns off the water supply to the home and dries the water on the floor in the kitchen. After cleaning up, Jessica calls a plumber to get an estimate on the repairs. The estimate comes back to around $10,000. Jessica files a claim and her insurance company covers the damage.
  • Claim Scenario 3: Justin has a massive house fire that does extensive damage to his kitchen. After the fire is taken care of and Justin gets to safety, he calls his insurance company to get the claim started immediately,

Knowing your insurance coverage is crucial, as demonstrated in Scenario 1 where a simple understanding of Jean's $2000 deductible could have prevented an unnecessary claim. To avoid such scenarios, it's essential to review your policy with your agent before making a claim. Scenario 2 shows that in low-risk situations, seeking a time estimate from a professional is a good way to assess whether to file a claim. On the other hand, severe damage, like Justin's house fire in Scenario 3, requires immediate involvement of the insurance company. Therefore, it's prudent to contact your insurance provider as soon as possible in the event of significant damage. By understanding your policy beforehand, you can avoid unnecessary claims and keep your CLUE report clean.

As a homeowner, it's necessary to prepare yourself for various maintenance issues that come with owning a home. In the event of a sudden loss or claim, your CLUE report - which shows loss activity over three to five years - might be reviewed by your insurer. Therefore, it's crucial to exercise due diligence to avoid increased premiums or denied coverage. Familiarizing yourself with your coverage can prevent unnecessary claims, offering peace of mind in the present and future.

The contents of this article are for informational purposes only. You should not act or refrain from acting based on this information without first consulting a Goosehead licensed agent at We disclaim all liability for actions taken or not taken by you based on the contents of this article which is provided "as is." Goosehead makes no representation that this content is error-free.