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How Past Claims on Your Home Can Affect Your Insurance Rate

You might have to pay higher premiums if claims were made on your home before you bought it.

Is it true that claims made on my home before I bought it can affect my homeowners insurance rates? Why? And how does the insurer know?

Yes, it’s true. Insurance companies share information about claims in a database called the Comprehensive Loss Underwriting Exchange (CLUE) to help them assess the risk of a claim when you apply for a policy. The database includes information about claims you’ve made over the past seven years, as well as claims that have been made on your home even before you lived there. If a lot of claims have been made on your home in the past, insurers worry that your house may have problems that could lead to more claims in the future -- especially for issues such as water damage, which can lead to more expensive claims for mold.

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You can order your CLUE Personal Property Report to check on your claims history. To check out a home’s claims history -- either before or after you buy it -- you can order a CLUE Home Seller’s Disclosure Report, which lists homeowners insurance claims on the home within the past five years. It won’t include all of the personal information you would receive in your Personal Property Report (such as the homeowner’s name, Social Security number and date of birth).

If an insurer does drop you for making a series of claims, see How to Find Home Insurance After You’ve Been Dropped for strategies that can help you find a new policy.

See 10 Factors That Can Raise Your Insurance Premiums for more information about surprising things that can affect your rates for home, auto, life and health insurance.

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