When you go through a catastrophic incident ^[2], making the decision to file a claim on your homeowners insurance ^[3] is a simple issue. In other cases, it’s a little risky because you could put your name into a database that makes it difficult to obtain or even maintain coverage in the future.

Insurance exists to provide you peace of mind and to empower you financially to restore your home to its original state before the homeowners insurance ^[3] claim. According to my homeowner’s agent, there are three types of claims that could potentially put your name into one of the two major databases that records homeowner’s claims.

• The Claim Loss Underwriting Exchange (CLUE) is operated by ChoicePoint ^[4].
• A-PLUS, which stands for Automated Property Loss Underwriting System, is run by Insurance Services Offices, Inc.

Later, I’ll give you information on how to get a copy of your CLUE and A-PLUS reports. Just like your credit score ^[5], these two databases score your risk of filing a claim when it comes to both homeowners and car insurance ^[6] claims. In fact, approximately 98 percent of all insurers report your claims to one or both of these databases. So which homeowner’s claims are seen as the most risky?

^[7]Water damage claims

No, I’m not talking about a flood or about the damage that results from a storm, I’m talking about the smaller leaks that cause mold (flood insurance is a different topic altogether and is rarely covered in most homeowners insurance ^[3] policies).

^[8]

Mold is a scary word for insurers. It can cause all sorts of ailments and many insurers have begun excluding it in their policies. Water damage in general can mean two things: poor or inadequate construction or poor maintenance practices. Either of these can spell problems in the future for the home.

^[9]Dog Bite Claims

According to the Insurance Information Institute ^[10], dog bites account for one-third of all homeowner’s insurance liability claims, costing $387.20 million in 2008, with 800,000 bites needing medical attention. Half of those claims occurred on the homeowner’s property.

Insurer’s keep a list of breeds that are most likely to attack and if Fido is one of those breeds, your rates could increase. If you have a single claim on your insurance because of a dog bite, your rates will almost certainly increase. You might be able to mitigate any increase by employing an animal trainer or taking your pooch to a dog psychologist … no, I’m not kidding. Other than that, you’ll have to send Rover to a new home.

Slips and fall claims

Falls are the single largest reason people go to the emergency room and many are preventable. If someone slips on your front porch steps or anywhere else on your property and wishes to file a claim against your homeowners insurance ^[3], your premiums will rise.

All three are preventable

The good news is that all these claims are preventable to some degree. Water damage can be prevented by proper maintenance and if the problem was with poor construction, you can keep yourself out of trouble by using a certified home inspector with a great reputation and lots of references. Dog bite claims can be prevented by getting a breed that doesn’t bite very often and then by training your new best friend to be social. Slips and falls can be prevented by installing handrails and non-slip surfaces where water might cause slips.

Get a copy of your CLUE report

Though you can’t get a CLUE report on a home you want to buy, some home sellers use CLUE reports to their advantage by showing it to prospective buyers. I becomes a marketing tool to demonstrate to potential buyers that the home has not had a claim or to show that repairs were completed.

And if you’re interested in buying a home, make the purchase contingent upon the seller providing a copy of the CLUE report … sort of like CarFax ^[11]!

Tornado photo by BakkoBrats ^[12]
Mold photo by IPI Photo Gallery ^[13]
Dog photo by Doxieone ^[14]

About the author

Ron has written 1083 articles on The Wisdom Journal.

The founder and editor of The Wisdom Journal ^[23] in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a partner in a national building materials company.

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