When you apply for home or condo insurance, claims are shared among insurance companies in the Comprehensive Loss Underwriting Exchange, or CLUE in the United States. Canada’s claims will fall into the AutoPlus reporting database that is controlled by CGI Group.
AutoPlus has over 60 million policy records, and the records do not include homeowner records.
Records are kept on all claims that you make, and being shared, these records will have a major impact on your overall rates.
Depending on the database, you’ll even be able to request a personal property report to find out your own claims history.
What CLUE and AutoPlus Means to You
CLUE and AutoPlus log all of your claims, and if you have a tendency to make a lot of claims, this means that you’re a higher risk for the insurer. Insurance companies want to minimize their risks, and a claims database does just that.
Past claims can harm you.
But these aren’t just your past claims. The previous owners’ claims can also cause you problems. Texas policyholders suffered this fate in 2002 and 2003 when insurers stopped issuing new policies. Mold and water-related claims led to insurers suffering severe financial burdens.
Homeowners were closing on homes and unable to secure an insurance policy because of the past homeowner’s claims.
Properties that are known to have a lot of past claims will cause your insurance to go up. Homeowners insurance isn’t the only insurance facing this problem. Condo insurance can also be higher if numerous claims have been made against the property.
“Condo insurance is not to be mistaken with home insurance. As opposed to homeowners, condo owners do not have a backyard, basement, or shed. Instead condo owners pay a building fee to the condominium association, where a portion of the money contributes to building insurance – anything outside of the unit. This includes hallways, common areas and any amenities such as gyms, pools, hot tubs, saunas or others,” states Insurance Hero.
What’s the issue with claims if you have insurance?
Let’s say that you called the insurance company to discuss a broken pipe issue. At the time the call is made, a claim is filed even if you’re merely inquiring about the deductible. You decide to make the $400 repair yourself, and the claim is marked as “closed, no payment.”
When going to get insurance, the no payment claim will be listed.
Claims that aren’t paid out will even go against the property. Insurers may also fear that the work was not done properly, so there may be a higher potential of mold in the home as a result.
Investing in real estate or buying your first home means doing your due diligence on the property before closing. It’s vital to request the history of claims on the property. Insurers may not insure you, but there’s also a risk that you’re purchasing a property that has severe issues, such as routine mold problems or bad piping that needs to be replaced.
Past insurance claims help you protect your investment as well as ensure that you’re able to acquire an insurance policy.