“OK, Mrs. Thompson, your premium is going to be a very favorable…oh, wait a second…I am seeing an insurance claim you filed a few years back on your homeowners insurance. That’s going to significantly impact your premium.”
If you’ve heard this or anything like it, including “You still have an open claim with your other insurer, so I can’t issue a new policy for you,” you’re not alone.
Thousands of Americans hear these phrases cross the lips of their prospective insurance agents every day.
But what if the claim never occurred, you weren’t paid a dime (because the damage was less than your deductible) or was actually from the previous home or vehicle owner? Unfortunately, your agent can’t just take your word for it and move on at the lower, claim-free premium.
How Does This Happen?
Insurance companies, most of them anyway, subscribe to a service called C.L.U.E, which stands for Comprehensive Loss Underwriting Exchange.
The C.L.U.E. report can be thought of as a service insurers use to “trust but verify” our claims history other than just taking our word for it.
You see, all insurance companies report accidents to this “data dump,” which means they can all share the details of our collective claims history…and charge us accordingly.
Unfortunately, there is a lot of room for human error here. People forget to “close” claims, an address is entered incorrectly, or your name simply comes up as a “potential” match for a vehicle damage claim because you were the previous or subsequent owner.
Either way, unlike the justice system, you’re guilty until proven innocent here.
What Can You Do?
It’s not your fault, and it’s a pain in the butt.
But what you need to do is contact the insurance company that insured you at the time the claim was reported and demand a “letter of experience,” clearing you of the pesky claim.
The “LOE,” as it’s referred to in insurance circles, is the equivalent of a letter from your mom (in this case the insurer) that says you either didn’t file the claim, it’s closed, nothing was paid out, or you never owned the vehicle/home in question.
This letter may take between 3-5 business days to produce. So if you’re in a hurry to get the new policy, you may have to bite the bullet until the letter shows up.
Your new insurance company will “credit” you whatever you deserve when your innocence is proven.
Mistakes are made here as well, although the recourse is more of a pain…although significantly less common.
In case you haven’t already heard, it may save you money to switch insurance companies.