I was aware of this BUT I was under the impression that this was only suppost to be a stigma attached to a home that had experienced flood damage and that would have the possibility of lots of hidden wet spots where mold could grow undetected. At least this has been the slant in Houston, expecially after the massive flood of 2001. And, I was kinda under the impression that he may have already had a water damage claim in so much that he mentioned that the floor was installed after hurricane Ike, last September.
Anyway you do have a very valid point and one should procede with caution concwening a claim especially if the home has not had the water damage badge on it's "Permanent Record".
Except that you now have the branding by the insurance company of having a house that has suffered water damage, enough to put you on the C.L.U.E. list. As a restoration/remodel/repair guy, this is important to know. Your claim, the amount paid, the amount of damage, and the type of damage will all be dutifully recorded. This will affect your insurance premiums (as in increase) until the unforeseeable future.
Most people have no idea this system exists. It started as an information sharing device between insurance companies to make sure they didn't inherit a latent claim from one another. Specifically, mold damage. Many years ago before water and mold claims began to be excluded from policy protection, there were claims from latent defects in property due to improper repair. A flooded house may have the walls stain killed and painted and the carpet replaced, but he mold lives on. In a particularly humid climate, it is only a matter of time before the mold asserts itself in a very aggressive way. And we all know the prodigious amounts of money paid for mold and water claims from plumbing leaks, hurricane and tornado damage, roof leaks, etc.
I no longer deal directly with insurance companies due to their lack of integrity. But in advising my clients, some will listen and some will not. Without ANY exception, those reporting water damage have either be canceled outright or face higher (around 20% or their premium) rates or policy modifications to exclude any claims from water damage. I am sure there are those here that personally know exceptions, but that's my experience.
At this point, the CLUE system is used by a lot of different companies for a lot of different reasons. Imagine seeing it used to negotiate against you in a real estate transaction. It will follow you around for future underwriting of insurance of both home, and now with its expanded coverage, your auto.
DAGS "Insurance CLUE list" and check out what you find. You can even find out information yourself now with sites like this:
Just my thoughts as usual.
Robert