HomeLatest NewsFeatured HomebuildersHome Buyer ResourcesBinding ArbitrationResource LinksSubmit ComplaintsView ComplaintsTake Action 101!Report Mortgage FraudMortgage Fraud NewsForeclosure NewsConstruction DefectsHome DefectsPhoto GalleryFoundation ProblemsHomeowner Website LinksHOA Reform

HUD FEATURE
1981 - 2015 HUD's
Legacy of Scandals

HOBB-Over 1M visits monthly
Daily Visitors Over 37,000
 Highest Daily 70,723

Main Menu
Home
Latest News
Featured Homebuilders
Home Buyer Resources
Binding Arbitration
Resource Links
Submit Complaints
View Complaints
Take Action 101!
Report Mortgage Fraud
Mortgage Fraud News
Foreclosure News
Construction Defects
Home Defects
Photo Gallery
Foundation Problems
Homeowner Website Links
HOA Reform
Featured Topics
Builder Death Spiral
Report Mortgage Fraud
Foreclosure Special Report
Mold & New Home Guide
Special News Reports
Centex & Habitability
How Fast Can They Build Them?
TRCC Editorial
Texas TRCC Scandal
Texas Watch - Tell Lawmakers
TRCC Recommendations
Sandra Bullock
People's Lawyer
Prevent Nightmare Homes
Choice Homes
Smart Money
Weekly Update Message
HOBB Archives
About HOBB
Contact Us
Fair Use Notice
Legislative Work
Your House

 HOBB News Alerts
and Updates

Click Here to Subscribe

Support HOBB - Become a Sustaining Member
Who's Online
ABC Special Report
Investigation: New Home Heartbreak
Trump - NAHB Homebuilders Shoddy Construction and Forced Arbitration

Property Rights Denied!
Protecting HOA Members' Rights is NOT The #1 Priority
of Managed Communities
The High Price of Managed Living, Books and Records Hidden
gives appearances of impropriety
Editorial Feature: Part One - Are Homeowners' Rights a Myth? 

Part Two: HOA Bureaucrats Overstep Their Authority

Insurance CLUE Reports
Thursday, 18 August 2005
MSN Money
Insurers Keep A Secret History Of Your Home
A huge database not only tracks claims, it also looks for risks such as toxic mold. That's why homeowners with even minor water damage are being canceled -- and are sometimes unable to sell.
  MSN Money
Insurers Keep A Secret History Of Your Home
A huge database not only tracks claims, it also looks for risks such as toxic mold. That's why homeowners with even minor water damage are being canceled -- and are sometimes unable to sell.
by Liz Pullam 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 making 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, either.
 
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.

“Until then, we didn’t know anything about the CLUE database,” she said. “We really didn’t have a clue.”

State Farm declined to comment on the Garders’ case, citing privacy concerns. Spokeswoman Lisa Wang said the insurer shares only claims information with CLUE, not damage reports.

But the company that operates CLUE, ChoicePoint of Alpharetta, Ga., said that the database collects damage reports as well as claims. The information stays in the database for up to five years, said James Lee, ChoicePoint’s chief marketing officer.

The Garders say they finally secured bare-bones fire coverage for about $1,000 a year, more than three times what they paid previously for full homeowners coverage.

What’s more, the problem is derailing their plans to sell their home. The Garders say they have been told by their real estate agent and others that they may have a tough time getting a good price for a home that’s already been rejected by many insurers.

“You are totally blackballed,” said Jan Garder, 49. “They should not be able to hold a consumer hostage like this.”

Insurance companies get aggressive

In previous years, insurers used the CLUE database in large part to watch for fraud and for consumers who had a history of filing numerous claims.

After losing billions of dollars on homeowners insurance in recent years, however, insurance companies have become more aggressive about screening for other risks -- including damaged homes that could spawn future claims.

State Farm has been among the most aggressive in weeding out unwanted risks. The nation’s largest property insurer has dropped thousands of policyholders from coast to coast and stopped writing homeowners insurance in several states.

So far, insurers’ increased use of the CLUE database has not caused serious problems for the booming real estate industry, said George Tribble, a member of the National Association of Mortgage Brokers’ board of directors.

But Tribble said he has heard a number of anecdotal reports of residential sales falling through at the last minute because of CLUE-related problems in securing insurance. He fears the problem could get worse if insurers begin to shy away from homes that have had even minor damage.

“Right now, it’s still a pretty isolated problem,” Tribble said, “but that could change if they (insurers) continue to do this. … If you’re not able to get insurance, you’re not able to close the deal.”

Tribble thinks it’s particularly unfair that a home could be blackballed because of one claim, let alone a single report of damage that didn’t lead to a claim.

“Insurance companies want to keep their costs down, which is understandable,” Tribble said, “but this is what you have insurance for -- to cover you for accidents.”

The insurance industry is notorious for its manic-depressive cycles. In profitable years, companies will slash premiums, boost coverage and take on big risks in hopes of gaining market share. When those risks start costing real money, the companies sound the full retreat -- hiking premiums, dropping customers and shunning risk.

What’s notable about their most recent mood swing was how quickly it happened, spurred in large part by last year’s losses and the massive increase in mold-related claims, especially in Texas and California.


How to protect yourself

While you can’t do much about insurers’ overreactions, you can do something to protect yourself in this particularly difficult time. Among them:
 
1. Keep your home in good repair. A solid, watertight roof, good plumbing and a decent paint job can protect your home from various water disasters -- the kind of damage that’s scaring insurers the most these days. It’s a good idea to regularly check the hoses on your clothes- and dish-washing machines, since cracked or burst hoses often lead to serious water damage.
 
2. Keep your deductible high. Pay for smaller expenses out of your own pocket. Homeowners insurance should be reserved for the big disasters, not the little problems you can easily pay for yourself.
 
3. Think twice about water-related claims. This is especially true if you plan to sell within a few years. You could be better off paying to repair the problem yourself rather having your home be branded as high risk.
 
4. Don’t tell your insurer about problems unless you’re sure you’ll file a claim. This last piece of advice is unfortunate, because insurers and insurance agents can be a decent source of counsel on whether it’s worth filing a claim. Since any damage you report could get passed on to the CLUE database, however, it’s smart now to err on the side of caution.
 
5. Consider getting a copy of your CLUE report. If you’ve been denied insurance, you can get a copy of your home’s CLUE report for free; otherwise, you’ll pay about $9. You have a right under federal law to dispute any erroneous information on the report. To get a copy, contact ChoicePoint by visiting www.CoiceTrust.com.
 
< Prev   Next >

 Texas, First Home Lemon Law Debated in the Nation
Homebuyers Need a Home Lemon Law

Search HOBB.org

 Beware of HOA Payment Plan! 

HOA Foreclosures Big Business 
ON THE COMMONS with Shu Bartholomew
Dr. Evan McKenzie HOA Governments

Reckless Endangerment
BY: GRETCHEN MORGENSON
and JOSHUA ROSNER

Outsized Ambition, Greed and
Corruption Led to
Economic Armageddon


Amazon
Barnes & Noble

 Feature
Rise and Fall of Predatory Lending and Housing

NY Times: Building Flawed American Dreams 
Read CATO Institute: 
HUD Scandals

Listen to NPR:
Reckless Endangerman
by
Gretchen Morgenson : How 'Reckless' Greed Contributed
to Financial Crisis - Fannie Mae

ATTENTION TAXPAYERS:
 
Pulte-Centex $900 Million Grant
Bad Guys at Countrywide Profit on Mortgage Toxins

NPR Special Report
Part I Listen Now
Perry Home - No Warranty 
Part II Listen Now
Texas Favors Builders

Washington Post
The housing bubble, in four chapters
BusinessWeek Special Reports
Bonfire of the Builders
Homebuilders helped fuel the housing crisis
Housing: That Sinking Feeling

Arbitration Fairness Now!
Sen Feingold, Rep Johnson
Introduce Consumer Justice
 
Senate Passes Franken
Binding Arbitration Amendment
  
   
Public Citizen Report 
Home Court Advantage
 

 (See photos) & Latest News

Judiciary & Civil Jurisprudence
 Arbitration Hearing,
Video of Homeowners
Testimony Advance to 1:55

Arbitration Bill Passes Senate
Four years to fight to get in court is not a day in Court, Jamie Leigh Jones 

 


Legislative
Watch
TEXAS ABOLISHES BUILDERS
PROTECTION AGENCY TRCC
 


Texas Regulates Homebuyers
 
Texas Comptroller Condemns TRCC Builder Protection Agency
TRCC is the punishment phase of homeownership in Texas

HOBB Update Messages

Consumer Affairs Builder Complaints

 TRCC Implosion
 TRCC Shut Down
 Sunset Report

IS YOUR STATE NEXT?
As Goes Texas So Goes the Nation
Knowledge and Financial Responsibility are still Optional for Texas Home Builders

OUTSTANDING FOX4 REPORT
TRCC from Bad to Worse
Case of the Crooked House

Perry's Gifts Keep on Talking
Sun Never Sets On Politicians Taking Homebuilder Money

TRCC AN ARRESTING EXPERIENCE
The Pat and Bob Egert Building & TRCC Experience 

Homebuilder's Right-To-Repair Illusion

Builders Looking for Federal Handouts

How Texas Home Building Industry shaped the TRCC to regulate buyers 

SpotLight
LiveTalk Internet

Build it right the first time
An interview with Janet Ahmad

HUD's Broken System
From HUD's Deregulation to Disgrace
Did HUD Secretary Cisneros
 Mastermind Predatory Lending?

Take Action
Ban Binding Mandatory Arbitration

Send a message urging your Congressman to support all legislation banning this unfair practice

Voting Texas Style
What Lawmaker is Voting for you?

Most Read

 Give Me Back My Rights Campaign
Model State Arbitration Legislation
Fair Homebuyer Contract Model

Bad Binding Arbitration Experience?
This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
or call 1-210-402-6800

NCPIRG
Homebuyers' Bill of Rights
Tips for a Better Built Home and to Protect Your Investment

Drum Major Institute
for Public Policy

Tort Deform
Report Your Arbitration Experience

Homebuilding Texas Style
And the walls came
tumblin' down

 Texas Homebuilder
Bob Perry Political Contributions

  The Agency Bob Perry Built
 TRCC Connection News
Tort Reform

NPR Interview - Perry's
Political influence movement.
Click to listen 

Texas Homebuyers
Fight for Rights

TRCC Abolish or Fix
or Pass Home Lemon Law
or
Homebuyers Bill of Rights

POLICYHOLDERS OF AMERICA POLL
82% would not vote back in office any legislator, regardless of party, that is soft on bad homebuilders?

REWARD
MOST WANTED

ARIZONA REGISTRAR OF CONTRACTORS
Have you seen any of these individuals

Pulte Homeowner Survey
Warranty & Mortgage Experience
 Click to participate

Tort Reform Feature
Texas Monthly
 Hurt? Injured? Need a Lawyer? Too Bad!

Special Money Report
Big Money and Shoddy Construction:Texas Home Buyers Left Out in the Cold
Read More
Read Report: Big Money…
Home Builder Money Source of Influence

Letters to the Editor
Write your letters to the Editor

Homeowner Websites

top of page

© 2024 HomeOwners for Better Building
Joomla! is Free Software released under the GNU/GPL License.