Just like creditors use credit scores, insurance companies will use them as well in order to learn more about the risks associated with providing insurance coverage for their applicants. There are quite a few factors that go into insurance scoring models and some of them include the number of claims you have on record and the number of claims the consumer files. Also, it’s important to know that a claim will show on a report between 5 to 7 years.
The large majority of insurance companies are subscribed to a national database service where they report consumer information. By doing so, they can get info related to the homeowners claims consumers file. This way, when a high risk consumer applies for homeowners insurance with any insurance company, that company will know the types of claims he filed, the filing frequency, the type of loss and the date when it occurred.
The FACT act is one of the best ways for consumers to access their insurance file every year. Insurance companies generally use databases that are carefully maintained by agencies such as CLUE in order to check if their applicants have filed any homeowners insurance claims in the past or not. This database though is just one of the many existing databases out there and it’s highly used by insurance companies in order to exchange consumer data that involves insurance claims histories. The good news is that any consumer has the right (under federal law) of accessing and disputing data in their CLUE report.
The info consumers provide the insurance companies is loaded into databases such as CLUE or similar ones. The address consumers input allows insurance companies to check their claims history so that they can eventually assess the risk of providing coverage to certain applicants. Besides the insurance claim info and property address, the report will also contain data such as the individual’s mortgage loan number, the name of his mortgage lender and his SSN. In general, personal property claims info stays on the Comprehensive Loss Underwriting Exchange report for 5 years from the date a loss is reported.
In the event your property sustains specific types of damage, your insurance company can limit your coverage or raise the rates for your homeowner insurance. Some examples of claims that have a negative impact on your premium include those that involve falls, dog bites or water damage. Because of that, you need to be cautious when planning to file an insurance claim, if you file too many of them, it’s going to be very hard to get homeowners insurance in the future.
Based on the policy you have, some may cap the payouts. In some cases, it’s best to pay of the damages out of pocket instead of filing a claim. Remember: always provide complete info on a claim form or insurance application. If you don’t, then your policy may be canceled by the insurance company before its expiration date. On top of that, the insurer can also refuse to insure you after your policy ends and in this case, they’ll notify you about it in advance.
View the Coastal Insurance Video Library to find helpful video’s explaining everything from, how to save money on Homeowners Insurance to an easy explanation of Flood Insurance. Call today (631-782-3175) to speak with one of our underwriting experts. Fast Quotes, A.M. Best Rates & Free Advice.