CLUE-ing in to your home’s ‘rap sheet’
There’s an insidious little beast out there, something like the malevolent little monsters in the movie Gremlins who tear up the Norman Rockwell-esque town of Kingston Falls. But this one’s worse than a mere Mogwai. This one’s (gasp!) known simply as a CLUE. At first blush, it sounds harmless enough, benevolent, in fact. Who wouldn’t want a CLUE, or worse yet, to be CLUE-less? Well, a little background first.CLUE, you might have guessed is a acronym. It stands for Comprehensive Loss Underwriting Exchange. Yep, that’s right, insurance stuff. You see now why I gasped. CLUE is a comprehensive database (as is, “Big Brother is watching” in this case, Big Brother being the insurance industry) relating to insurance claims pertaining mainly to residential property. Typically, a CLUE report contains information about an insured or a particular property. It includes information such as the name, sex, birth date, social security number and current and previous addresses of the insured. The “good stuff” though, like the plot point of Gremlins where all the mischief first begins, lies in the claims history of the individual or the property. This section includes a list or compilation of all claims made in the last seven years.This claims history is identified on the report as “Reported Claim History for Risk.” If your short hairs bristled when reading this last sentence, it’s not without cause. More on that in just a sec.The claim history includes the date of each claim, the name of the insurance company involved, various policy information, amounts paid and the name of the insured and of the claimant. One of the keys here is that the CLUE report details the “claims history” of both a given consumer and of a given property (which may have been owned, over time, by several unrelated persons).Most consumer’s – even those who have heard of CLUE – are unaware that the claim history usually includes any call made to an insurance representative regarding a loss, whether or not a claim for compensation is ever actually filed. Read that last part again. Yep, that’s right, just calling the insurance company and making an inquiry even if a claim is never made – adds to your and to the property’s “rap sheet.” It’s like going to a priest for absolution only to find the verbatim text of your confession printed in the next week’s church newsletter.Let’s take a quick example. I’m contemplating one dull evening whether, if my washing machine were to one day overflow and wreck havoc on my flooring, if my insurance company would foot the bill for my new floors. Thinking about it is a burr under my saddle and I pick up to phone to find the Always-Friendly-Customer-Service-Representative from my insurance company eager, ready and willing to help. I lay out the scenario, underscoring that this is just hypothetical, mind you, that my washing machine, in fact, is a marvel of modern engineering and has never in ten years’ faithful service, given me a moment’s pause to doubt that it will function without a hitch likely longer than my own lifetime. The Always-Friendly-Customer-Service-Representative gives me the good news, if, in fact, one day Old Faithful should fail, spilling sudsy effluvia onto my floors, I’m covered. I thank The Always-Friendly-Customer-Service-Representative. I can rest easy now.But wait. My curiosity, like the old saw says, may have killed the cat of my heretofore spotless insurance rap sheet. Just by asking, I have earned demerits. The old Socratic lessons you have learned in school – that the eager and curious student earns rewards – is turned on its head here. The insolence of merely inquiring in punished.Here’s now where the truly evil stuff begins.When faced with a prospective insured, insurance providers use the CLUE database to find out information not only about the potential customer, but also about the residence to be covered. Often this will cause problems for homeowners who have recently purchased a property. If they blithely assume that they will easily be able to obtain insurance, resting on the logic that they always have had coverage and have never made a claim, they may be horrified to learn that they have been turned down, based not on any act or wrongdoing of their own but based, instead, on claims made on their new property by the previous owner or owners. That’s right, guilt by mere association. Tainted with a broad brush of fault based on the property’s poor rap sheet. This is America?Because of CLUE, you should always request a CLUE report as a condition of closing on a new property. This will give you a head’s up as to whether you will be able to obtain insurance at a reasonable rate (or at all!) on the property. But what about the seller? Well, the best advise, so long as CLUE exists, is “don’t ask, don’t tell.” Think twice, or three times, before making a claim or even asking about coverage. You should make claims only for true catastrophes floods, fires and the like and foot the little stuff yourself. This, in part, is the chilling intent of CLUE.CLUE is evil and pernicious but, because insurance is a private contract between the insurer and the potential insured, insurers can largely pick and choose to whom they wish to offer coverage. At least until regulators determine that CLUE, as used, is often unfair and abusive.
CLUE reports can be obtained only by the current owner of a property. They can be obtained for $9.00 ($12.95 for an electronic copy) by contacting ChoicePoint on the web at [ http://www.choicetrust.com./ ]www.choicetrust.com. Residents of Colorado are entitled to one free CLUE report per year. You can obtain one by calling 866/527.2600.Rohn K. Robbins is an attorney licensed before the Bars of Colorado and California who practices in the Vail Valley. He is a member of the Colorado State Bar Association Legal Ethics Committee and is a formeradjunct professor of law. Robbins lectures for Continuing Legal Education for attorneys in the areas of real estate, business law and legal ethics. He can be heard on Wednesdays at 7 p.m. on KZYR radio (97.7 FM) as host of “Community Focus.” Robbins can be reached at 926-4461 or at firstname.lastname@example.org.Vail, Colorado
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