Claim inquiries and your rate – The Unfortunate truth

June 17, 2021
In 2021 the majority of us know that having Insurance is the law. And for good reason! But many us are also still very uninformed in regards to some of the finer points of our policies. One of these areas we are the least informed on is the claims process and how it affects us.
All insurance companies use CLUE reports (Comprehensive Loss Underwriting Exchange) to track your claims and your claim inquiries. These reports can go back up to 7 years. Most of us know that they track our claims. We can all wrap our heads around the fact that if an Insurer pays out 10’s of thousands of dollars to us to fix something like a roof or a floor, whether its our fault or not, that the next insurance company we go to should know about these things and that it could understandably affect our rates. What most of us don’t know is that even calling to ask a hypothetical question can make your rate go up!
While some Insures do a good job differentiating between inquiries and actual claims, many do not. For example, if you were to call your Insurance Companies claims hotline and speak to a claims rep that call could automatically be given a claim number and therefor be added to your CLUE. It could have a zero dollar pay out and a description of a loss that never actually occurred depending on how your phrase your questions. The next company will have no way to tell the difference between what was actually an inquiry and what could also have been a denied claim. I believe that many of us also don’t understand that just because there wasn’t a payout doesn’t mean you aren’t now a higher risk to insure and therefore receive a higher rate. But that is a discussion for another day.
The unfortunate truth is these companies do this and they do it often and once it’s on your report its very difficult to have it removed. So now you have possibly lost your “Claims free history discount” and might be getting charged the same way a person who actually has had a substantial loss in the last 5 years! All because you called and asked “If my refrigerator is leaking and ruined my cabinets and floors is that something that would be covered by my policy. Some companies do this more then others and there aren’t any lists or ways to figure out who does this and who doesn’t. The one way to combat having these issue is to simply calling your broker and ask them your questions. While they aren’t a claims expert, they will have general knowledge and can at the very least find the answers to your questions without the possibility of you being charged or losing a discount.
Fear not my friends! Although the pitfalls in the Insurance world are many, we here at BGA can happily help you navigate them all! With Veteran Brokers and GA’s here to help you, together we can protect you and your family, assets, employees, wealth and future. Best Guys Around!
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