2008 Insurance Guide
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Claims that boost your insurance rates

When should you make an insurance claim?

For many, the answer is a no-brainer: "Whenever I have an accident or suffer damage to my house or car."

Unfortunately, the decision about whether to file a claim is rarely so simple. In some cases, making a claim may cause an insurance company to raise your rates.

In other instances, the decision to file a claim could put your name into a database that makes it difficult to get or maintain coverage in the future.

Insurance is there to give you peace of mind and to restore a damaged car or property to its original state.

"The whole point of insurance is to make good on a loss, to make individuals whole again," says Claire Wilkinson, vice president of global issues for the New York-based Insurance Information Institute, an organization focused on improving public understanding of insurance.

However, before you make another claim, make sure you know how it could come back to haunt you.

3 red flags
Certain types of home insurance claims are more likely to trigger an increase in premiums. They include:
Claims that boost premiums
  1. Dog bites
  2. Water damage
  3. Slip-and-fall claims

Database danger

Many people fear that filing insurance claims will cause them to be "blackballed" by insurance companies, resulting in higher premiums, loss of coverage and difficulties obtaining new insurance.

Unfortunately, in some cases they might be right.

The vast majority of consumer insurance claims are recorded in one or both of two databases: CLUE and A-PLUS.

The larger and better-known database -- CLUE, which stands for Claim Loss Underwriting Exchange -- is operated by the Georgia-based ChoicePoint.

A-PLUS, which stands for Automated Property Loss Underwriting System, is the other database. It is run by New Jersey-based Insurance Services Offices, Inc.

ChoicePoint's CLUE is so popular that people in the insurance industry often refer to reports generated by either database as "CLUE reports."

"More than 98 percent of insurers writing automobile and homeowners coverage provide loss data to the CLUE databases," says Fiona McCaul, corporate communications manager of ChoicePoint.

CLUE reports include "policy information such as name, address and policy number, and claim information such as date of loss, type of loss and amounts paid," McCaul says.


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