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Thursday, April 01 2010

Improve Your Insurance Score

Paying all of your bills on time is one good way to improve your insurance score—and, in turn, lower your homeowners insurance premiums.

Most people expect the cost of homeowners insurance to go up after a claim is filed. But it may surprise you to know that how good you are at managing your finances can have just as big an effect on your premium as the tree that fell on your house.

Insurers look to your credit history to calculate an insurance score that’s used to judge how much of a financial risk you are. The lower the score, the higher the risk—and the higher the premium you’ll likely pay on your homeowners insurance. Don’t despair. There are strategies, including paying bills on time, that can help improve your insurance score.

Good credit pays off

Wondering what too many credit cards has to do with the limb that landed on your roof? More than you’d think, it turns out. Several studies have found that your credit history is a good indicator of how often you’re likely to file an insurance claim. Because more claims translate into more expense for insurance companies, homeowners with low insurances scores tend to be charged higher premiums.

Insurers claim the use of credit-based insurance scores is fair and actually works in favor of fiscally responsible consumers. A 2006 study found that 53% of Oregon policyholders paid lower premiums on homeowners insurance thanks to credit-based insurance scores. ECONorthwest, the group that conducted the research, estimated the average annual savings for policyholders nationwide at $60.

How your insurance score is calculated

Your insurance score starts with your credit report, a history of your credit use. What credit cards and loans do you have? What are the balances? How promptly do you pay? Your report also includes information gleaned from public records such as bankruptcies and liens. FICO is the best-known company that turns the information in credit reports into credit scores. FICO credit scores range from 300 to 850.

Insurers are less concerned than lenders about your ability to pay back a specific amount than your overall ability to manage money, says Allstate spokesman Adam Shores, especially whether you make late payments and how long since delinquencies took place. Your insurance claims history, as recorded in your CLUE report, also affects your insurance score. So can your age, the construction of your house, and whether you’ve installed smoke detectors and other safety equipment.

All of these data are crunched to come up with a numerical insurance score. This is where it gets tricky for homeowners. There isn’t a single source for insurance scores, and your insurer probably won’t tell you your score even if you ask. Some insurers employ proprietary formulas. Others use insurance scores calculated by companies like FICO and ChoicePoint, the latter of which will sell you your score for $12.95. ChoicePoint’s Attract insurance scores can range from 200 to 997, with a score over 776 considered good.

Ways to raise your score

The most effective way to raise your insurance score is to improve your credit score. You’re entitled to free copies of your credit reports annually from the major credit bureaus: Equifax, Experian, and TransUnion. Order them and look for errors: Is your Social Security number correct? Are all the debts and credit cards yours? Do the balances jibe with your records? Errors can be disputed online.

If the information on your credit report is correct, there are still things you can do to improve your score. Paring down balances on credit cards is a big plus. Paying bills by the due date is another major factor, accounting for 35% of a FICO credit score. Time is also on your side. Most late payments are removed from your credit report after seven years. A few major problems such as a bankruptcy may stay on for a decade or more.

Mariwyn Evans has spent 25 years writing about commercial and residential real estate. She’s the author of several books, including “Opportunities in Real Estate Careers,” as well as too many magazine articles to count.

Source: http://www.houselogic.com/articles/improve-your-insurance-score/

Posted by: Rolando Trentini AT 08:00 am   |  Permalink   |  0 Comments  |  Email
Wednesday, March 31 2010

How to Correct Your CLUE Insurance Report

Errors or misleading information in your CLUE insurance report, which details the claims history of a person or property, can cost you. Worse, you may not even know there’s a mistake until you get turned down for homeowners insurance or see a huge jump in your premium.

Insurance companies use the claims history stored in the CLUE database-–CLUE is short for Comprehensive Loss Underwriting Exchange—as a principal factor in deciding if they will insure your home and how much that insurance will cost. So correcting a mistake or misstatement may bring you a direct financial savings. Unfortunately, the burden of proof is on you.

How to dispute report information

If you decide to contest information about a claim, your first step is to contact ChoicePoint, the owner of CLUE. You can either call the phone number listed on your CLUE report or write to P.O. Box 105292, Atlanta Ga. 30348. (The general toll-free number is 800-456-6004.) You can’t submit a dispute statement online. A-PLUS, operator of another claims-history database, follows a similar dispute procedure.

You’ll need to provide the following information to dispute a claim:

•The CLUE reference number, which appears near the top of the report;

•The name of the insurance company;

•The date of the loss;

•A brief explanation of the facts as you see them.

Once ChoicePoint gets your dispute statement, it will investigate the claim and contact your insurance company, if necessary. The investigation can take up to 30 days, according to a ChoicePoint spokesperson.

If ChoicePoint’s investigation supports your assertions, it will make changes in your CLUE file. Whether it agrees or not, the company will send you a letter explaining its findings within five days after the investigation is concluded. Many insurers offer a claim-free discount. Just 5% off means $40 in savings on an average annual premium of $804.

Setting the record straight

If you’re not satisfied with the results of the investigation, you can submit your side of the story. ChoicePoint will add your statement to any future CLUE reports that include the disputed claim.

 

Even if the claims information in your CLUE report isn’t wrong, you may decide the report doesn’t tell the whole story. You can add comments to any entry in your CLUE report to explain the circumstances of

a claim. For example, perhaps you made a claim for damage to your roof after a limb from your neighbor’s tree broke off in a storm. Since then the neighbor has cut down the tree and you’ve repaired the roof. You could attach a comment to the claim history indicating that this problem won’t reoccur.

Look out for these common errors

What should you look for in checking your CLUE report? Of course, look for any claims that you didn’t file. You can also review the specific information about each claim for accuracy, in particular:

•Social Security numbers. An incorrect number could mean someone else’s claims history is in your report;

•Policy numbers. Check them against your original policy or your most recent bill;

•Dates of claim. Since claims only remain on the report for seven years, an incorrect date could mean that the claim is listed for too long;

•Amounts of claim. Be sure that these amounts agree with any payments you received.

If you haven’t owned your home for seven years, you might also want to contact the previous owners to verify that any claims they filed are stated correctly in the report. If you got a copy of ChoicePoint’s Home Seller’s Disclosure Report from the sellers when you purchased your home, you might also want to compare that report with the “Claims History for Risk” section of the current CLUE report. This part of the CLUE report lists recent claims related to your home, not just those you filed. One catch is that the Home Seller’s report, which shows the claims history of a property without divulging personal information about the sellers, only goes back five years.

 

Mariwyn Evans has spent 25 years writing about commercial and residential real estate. She’s the author of several books, including “Opportunities in Real Estate Careers,” as well as too many magazine articles to count.

Source: http://www.houselogic.com/articles/how-to-correct-your-clue-insurance-report/

Posted by: Rolando Trentini AT 08:00 am   |  Permalink   |  0 Comments  |  Email
Tuesday, March 30 2010

A tree falls on the roof of your house. You file an insurance claim with your agent, collect a settlement from the insurer, and fix your roof. End of story, right? Not quite. Every claim you make on your homeowners insurance is recorded in a widely used insurance industry database called CLUE, short for Comprehensive Loss Underwriting Exchange.

Almost all insurance companies use CLUE to check on the claims history of prospective policyholders. The CLUE insurance report also includes claims made on your home before you even bought it. A-PLUS is another company that maintains a loss-history database. What’s inside these reports can affect your insurance premiums, or even prevent you from getting coverage.

Your claims history lives on in CLUE

The CLUE Personal Property report, which pertains to homeowners insurance, is divided into two parts: your personal record of claims (“Claims for the Subject”) and the claims on your home (“Claims History for Risk”). The number of claims in either section will affect whether you can get insurance for your home, how much coverage you can get, and how much you’ll pay in premiums. If you’re turned down for homeowners insurance because of information in your CLUE report, your insurance company is required to let you know why you were rejected.

Since the database is used by most insurance companies, your claims history follows you from one insurer to another. Actual claims, as opposed to inquiries, remain in the CLUE database for seven years from the date you filed them. Both ChoicePoint, the owner of CLUE, and A-PLUS advise insurance carriers not to report loss information just because you called to ask a question about whether your policy will cover a particular loss. Individual insurance companies may keep a record of inquires, though.

How insurers use CLUE

Insurance companies rely on CLUE reports because statistics show that if you’ve filed a claim in the past, you’re more likely to file one in the future, says Dick Luedke, a spokesperson for State Farm Insurance. The amount of a claim is less important than how often you’ve filed, he says. “We aren’t trying to make up for past losses, but to predict the risk of future claims.”

Each insurance company has its own formula for calculating how much a claim will affect your premium, according to the Insurance Information Institute, a trade group that provides information to consumers. Suffice it to say the fewer the claims the less you’ll likely be charged. State Farm gives a 5% discount if you haven’t filed a claim in the last five years, says Luedke. That’s $40 off an average annual premium of $804. Ask your agent if a claim-free discount is available.

Claims aren’t all that count

Knowing what’s on your CLUE report will give you a sense of whether you’ll need to pay extra for homeowners insurance, or even if you run the risk of rejection. Unfortunately, even a pristine report doesn’t mean you can be sure of getting homeowners insurance at a great price. That’s because the claims on your CLUE report aren’t the only things that affect your overall insurance risk.

Insurance companies also consider your credit score, which is based on such things as how much debt you carry, whether you pay your bills on time, and so forth. According to the Insurance Information Institute, studies show that how people manage their finances is a good indicator of whether they’ll file an insurance claim. The more likely you are to file a claim, the bigger risk you are to the insurance company. And more risk means a higher premium or denial of coverage. Other factors insurers consider include the location of your home and its type of construction.

How to review your CLUE report

If you do decide to check you CLUE Personal Property report, it’s a relatively easy process. Under federal law, you get one free CLUE report a year. You can contact ChoicePoint by telephone at 800-456-6004. You can also register online to gain access to an electronic copy of your report for 30 days. Request a form to receive a Property Loss report from A-PLUS by calling 800-709-8842. There’s a charge of $9 to have the report mailed to you, according to the company’s website.

Your CLUE report will have:

•Your name, home address, birth date, and Social Security number;

•The number assigned to the report;

•The name of your insurance company;

•The type and number of the insurance policy;

•The type of loss—fire, water, etc.—for each claim and the claim number;

•The date of the loss and the amount of each claim;

•The status of each claim: closed, pending, etc.

The report also tells you how to dispute any errors you find. Because risk calculations vary by insurance company, it’s impossible to say exactly how a claim on your CLUE report will affect your premium. That makes it tough to decide just how much value checking your CLUE yields. Still, taking less than an hour once a year to order and review your report could pay off, especially if you find an error.

Mariwyn Evans has spent 25 years writing about commercial and residential real estate. She’s the author of several books, including “Opportunities in Real Estate Careers,” as well as too many magazine articles to count.

Source: http://www.houselogic.com/articles/your-clue-insurance-report-matters/

Posted by: Rolando Trentini AT 08:00 am   |  Permalink   |  0 Comments  |  Email
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The Trentini Team
F.C. Tucker EMGE REALTORS®
7820 Eagle Crest Bvd., Suite 200
Evansville, IN 47715
Office: (812) 479-0801
Cell: (812) 499-9234
Email: Rolando@RolandoTrentini.com


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