Your Home's Insurance Claim History - Get a CLUE

by Dan Derkum


From time-to-time, we have customers who experience damage to their homes (usually water damage) and they ask me “should I make a claim to my insurance company?” Here’s what I can tell you. Each time you file a claim with your insurance company, it’s entered into the Comprehensive Loss Underwriting Exchange (CLUE). What’s this? It’s a National database that all insurance companies use to determine your insurance premium.


Insurers share information on homeowner’s claims for up to seven years through the CLUE. When you apply for insurance, the company looks at the claims history for your home, even for the time before you lived there. If the house has a history of water-damage claims, for example, it may be more likely to have future problems—and insurers will boost your rate. You can check a house’s CLUE report either before or after you buy it.

Reports are available at .


CLUE reports illustrate all claims and include the type of claim (water, fire, theft, etc.), amount paid on the claim, status of the claim, dates of the claim, and the insurance company who paid the claim along with the policy number(s). It also has your name, address, date of birth, age, social security number, phone number, and gender. Interestingly, your home is listed as a Risk Address. It also lists any former addresses for you. They know it all!


Now, think about this. If your home insurance is $1,500 per year on average over 20 years, you’ve paid total premiums of about $30,000. Of that, only about 20% or $6,000 is profit to your insurance company – or $300 per year.


You have a slab leak or other water pipe leak causing $10,000 - $15,000 in damage. This amount must be paid now. That’s way more than the $300 yearly profit your insurance company is getting from you! In the eyes of the insurance industry, you’re a huge disaster and a monumental risk!!! They also know that you will have future pipe leaks from your old and worn out copper water pipes.


The insurance company must recoup this $10,000 - $15,000 loss. They also make sure all this information goes into the CLUE, so they’re subsidiary insurance companies and other insurance companies can reassess your premium and charge you accordingly. You’re not going to be able to change carriers to hide the loss and get your future premiums lowered . . . your going to pay through the teeth for years!


Since you are now considered a big disaster, you’re cancelled and your insurance premium goes through the roof! If you’re lucky, you’re not cancelled but your premiums still go through the roof.


So, while you’re busy celebrating your new $10,000 - $15,000 replacement wood floor, carpet, painted interior, and baseboards, you can gasp at your new $4,500 per year insurance bill! Over 7 years, you’ll pay at least $37,800 in premiums with yearly increases for that $10,000 -$15,000 worth of work!!! Why would anyone do this? You’re upside down by at least $22,800 - $27,800. Just pay for the work yourself and forget the insurance company. You’ll be $20,000 to $30,000 ahead – at a minimum!!!


According to my insurance agent, the insurance industry looks at fire insurance as the only “real” insurance for your home. Everything else is to make buckets of money – have you ever seen the buildings insurance companies occupy? Nice, aren’t they! You pay for all that sp-lender. How do you think the insurance agents sponsor all those Little League teams, “free” seminars, “free” dinners, and other “free” and sponsored activities? They’re not using their own money – they’re using yours!


Do yourself and your family a huge favor. When you have that water leak, call a reputable Contractor (like DAD’s Construction), get the house re-piped, make the repairs, and laugh all the way to the bank! If you don’t need that extra $20,000 - $30,000, send it to me. I have 4 kids and they would love the extra money!



If you have any questions about the Home Claim CLUE, please call me, Dan Derkum, at 
(949) 380-0177 or e-mail me by filling out our quick contact form

About the Author
Daniel A. Derkum is the owner of DAD's Construction, a leading South Orange County, California design-and-build remodeling and renovation contractor.

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