Per
MSN Money:
Jan and Kevin Garder of Bremerton, Wash., discovered this the hard way...when they told their insurance company, State Farm, about some minor water damage caused by a rainstorm...The couple, who say they had been with their insurer for 30 years without filing a claim, ultimately decided not to file one this time, either.
That didn’t stop State Farm from dropping them as customers...State Farm also shared the damage information with the CLUE database. When the Garders applied for coverage elsewhere, the other insurers cited State Farm’s damage report as the reason they wouldn’t write a policy...
The Garders say they finally secured bare-bones fire coverage for about $1,000 a year, more than three times what they paid previously for full homeowners coverage...Also, homeowners could run into
problems trying to sell houses that are rejected by insurers.
According to the
California Department of Insurance:
Choicepoint, the company that owns and manages the CLUE database is quick to compare CLUE to a credit report. Consumers are at a serious information disadvantage because they do not know the database exists, may not be told by insurers that their denial of coverage is due to a CLUE report, and do not know how to obtain a copy of their report to review it and dispute errors.Already had a pretty low opinion of
Choicepoint, but I must have missed the memo on this home insurance thing.
(Edited for clarity)