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QUESTION: Can an insurance co raise your rate for a claim that was put in with another insurance co two months before you had them?

ANSWER: When you ask about how to claim or actually make a claim on your home insurance policy, it is registered in two separate databases. One is called CLUE, the other A-PLUS. These databases are an information exchange used by the insurance industry and they both generate a score. This score works in exactly the same way as your credit rating. So if you make a claim, this will affect the way every other insurance company assesses your risk profile and, unfortunately, if you claim from Company A, Company B may decide you are more likely to claim against it and raise the rates.

Depending on the extent of the claim you made, it's possible that your second company may refuse to renew the policy when it expires. It's also possible other insurance companies may be reluctant to take you on.

Some states have now passed laws to limit reliance on CLUE reports and insurance scores, and there's considerable controversy inside the National Insurance Commissioners Association on how to formulate a coherent national policy on this. It's possible your state has laws to protect you. If not, you should ask your insurance commissioner for help. Under the FACT Act, you are entitled to a copy of the information held by CLUE and A-PLUS. If you find any mistakes, you have a right to have the errors corrected. Your stat'es Insurance COmmissioner should advise you on your rights.


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