Insurers keep a secret history of your home
A huge database not only tracks claims, it also looks for risks --
which could cause dropped coverage and other nightmares for
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IndexDiscuss in a Message BoardDigg This By Liz Pulliam Weston
You probably know that it's not a good idea to make too many claims on
your homeowners insurance policy, because your insurer could drop you.
What you might not know is that a claim could make selling your home
more difficult down the road. What's more, you could find your home's
value damaged or a sale jeopardized even if a previous owner, and not
you, made a claim.
Insurers increasingly are using a huge industry database, called the
Comprehensive Loss Underwriting Exchange, or CLUE, to drop or deny
coverage based on a home's history of claims or damage reports.
Insurance companies are terrified of rising losses from water and mold
damage. So a single report of water-related problems may be enough for
insurers to shun your home.
Jan and Kevin Garder of Bremerton, Wash., discovered this the hard
way. The Garders thought they were doing the right thing when they
told their insurance company, State Farm, about some minor water
damage caused by a rainstorm last year.
Consumers held hostage
The couple, who say they had been with their insurer for 30 years
without filing a claim, ultimately decided not to file one this time,
That didn't stop State Farm from dropping them as customers, they say.
Not only that, but they say State Farm also shared the damage
information with the CLUE database. When the Garders applied for
coverage elsewhere, the other insurers cited State Farm's damage
report as the reason they wouldn't write a policy, Jan Garder said.