About two-thirds of Americans own their home. And for most American homeowners, their home is their single most valuable asset and part of the American dream. So most homeowners protect that asset with home insurance.
Consumer advocates
estimate that the average cost of home insurance increased by 24 percent between 2021 and 2024, outpacing cumulative inflation over the same time by 11 percent. Many families are struggling to find affordable home insurance.
The Comprehensive Loss Underwriting Exchange and Your CLUE Report
There some obvious causes for this increase (like increased weather-related losses and disruption from the pandemic). But many homeowners are paying more
without even knowing it due to inaccurate or incomplete information in their CLUE report. CLUE—the Comprehensive Loss Underwriting Exchange—is an insurance claim database and information exchange. Insurers which participate in CLUE report consumers’ claim histories and then use CLUE’s consumer reports to rate insurance coverage and premiums for new and existing policyholders. So if your insurer reported the wrong information to CLUE, it could cost you at renewal or if you tried to shop for different homeowners' insurance. And if your insurer mishandled a claim, or treated a simple inquiry as a claim, and reported it that way to CLUE, it could cost you―or even mean losing insurance coverage altogether.
Your CLUE Report and Your Rights Under the Fair Credit Reporting Act
CLUE serves the same role for insurance companies and their policyholders as the traditional credit reporting agencies (Experian, Equifax, and TransUnion) serve in consumer credit transactions. (CLUE is by far the largest such insurance consumer reporting agency, but not the only one.) Because CLUE is a consumer reporting agency under the Fair Credit Reporting Act (FCRA), homeowners have the same rights with respect to their CLUE reports as they do with traditional credit reports, including
requesting a free report.
The FCRA Applies to Insurance Companies, Too
Insurers are also subject to the FCRA.
The same rules that protect consumers in the consumer credit and employment contexts also apply to insurance companies which access and use your CLUE report. This means insurers have to follow the same strict rules on privacy and accuracy of information reported to CLUE that apply in other contexts under the FCRA and related laws (like California’s Consumer Credit Reporting Agencies Act). If the information your insurer reported to CLUE is wrong, you can fix that.
Your Insurance Claim File and Your Rights under California Law
Homeowners also have a right to review, dispute, and correct their personal information in their insurers’ files under California’s Insurance Information and Privacy Protection Act (IIPPA), which mirror their rights under the FCRA in many respects.
Home Insurance and California Proposition 103
In 1998, California voters passed Proposition 103, the Reduction and Control of Insurance Rates Act. This groundbreaking legislation overhauled California insurance law. In particular, it prohibits insurance rates which are “excessive [or] unfairly discriminatory or otherwise in violation of this chapter.” California Insurance Code § 1861.05(a). If a premium increase or non-renewal unfairly discriminates between similarly-situated homeowners (for instance, counting claims that were withdrawn, denied, or fell within a policy’s deductible against the policyholder), the policyholder has a mechanism to correct that discrimination under California law.
Preston Law Offices Helps You Protect Your Rights
If you have been turned down for home insurance or are overpaying because of inaccurate or incomplete information in your CLUE report or insurance file, please contact Preston Law Offices. The intersection of the FCRA and insurance law is complicated. Preston Law Offices advises homeowners on when and how to review, dispute, and correct their CLUE reports.
Contact us today to schedule a free, confidential consultation to discuss your situation and how we can help.
