The past few years have seen a dramatic increase in both auto and homeowners insurance costs. Currently, the typical cost of homeowners insurance averages around $231 monthly, while drivers spend approximately $600 annually for basic auto insurance coverage—sometimes exceeding $2,000 yearly for more comprehensive plans. Despite the rising costs, it’s essential not to simply accept these premiums blindly. If insurance expenses are becoming a strain on finances, it’s vital to ensure that the calculations of your premiums are accurate. An excellent first step is to obtain a copy of your Comprehensive Loss Underwriting Exchange (CLUE) report.

What Exactly is a CLUE Report?

A CLUE report serves as a comprehensive record of all insurance claims filed on a particular property or vehicle over the past seven years, along with a calculated “risk score.” Produced by LexisNexis, this report is utilized by nearly all insurers to assess your risk profile and subsequently determine the rates for insuring your home or car. The report details each claim’s date, the involved insurance companies, the policyholder’s personal details, the nature of the loss, and the claim’s resolution (including any payouts).

Insurance providers utilize this data to evaluate the potential risks associated with covering that property. For instance, if multiple water damage claims have been previously filed for your home, your insurer may deem it a high-risk situation, leading to increased rates. Similarly, if your vehicle has experienced theft and damage in the past, your insurance costs for comprehensive coverage might rise due to the perceived likelihood of repeated incidents.

However, it’s worth noting that CLUE reports do not always lead to higher premiums. A claim for a new roof installation might suggest to your insurer that you are less likely to file additional claims soon, potentially resulting in a decrease in your rates. Therefore, if you find your insurance costs to be unexpectedly high or they have spiked recently, your CLUE report could hold the answers—much like credit reports, CLUE reports can contain errors.

How to Obtain Your CLUE Report

CLUE reports are also advantageous when exploring options for new cars or homes. Although obtaining a CLUE report for properties you don’t own isn’t possible, the current owner can provide you with a copy. You can analyze the report similarly to how insurance companies do, assessing the risks involved. For example, if a property you’re considering purchasing has had numerous mold remediation claims over the past seven years, you might regard it as too risky and decide to forgo that option.

While completely evading risk is impossible, and insurance is never free, examining your CLUE reports ensures you’re paying a justified rate for coverage and might keep you from acquiring an unsuitable vehicle or residence.