Black homeowners continue as the most under insured, over-charged and least compensated for damages of any racial group. Partly because of quiet discrimination (insurance companies call it added risk) and lack of information, Black homeowners continue to pad the profits of insurance companies more than any racial group.
With sweeping changing happening in the insurance industry as we speak, few homeowners, especially Black homeowners have a source that can keep them updated on those changes.
In this week's newsletter I'll discuss one of the major changes insurance companies continue to use on what they call risky (code word ... minority, urban homeowners and neighborhoods).
More and more home insurers are turning to a secret database called the Comprehensive Loss Underwriting Exchange (or C.L.U.E). Despite record profits as reported in the Los Angeles Times and USA Today, home insurance companies worry about increasing payouts for water and mold damage claims.
This new trend could make it harder for you to sell or buy a home that's had a past water or mold damage claim. Why? Because more insurance companies make it a point to check if there's any past water or mold damage claims made on a home before insuring or re-insuring a home.
In fact, many insurance company experts report an increasing number of companies using the C.L.U.E database to refuse coverage based on a homes record of claims made.
Financial institutions have the FICO credit scoring, now home insurance companies have the C.L.U.E database. This is a secret most homeowners don't know, except the homeowners smart enough to read this newsletter.
I'll show you simple ways to protect yourself later in this article, but first let me tell you a little more about this secret database insurance companies don't want you to know about.
The Comprehensive Loss Underwriting Exchange, managed by ChoicePoint collects, stores and issues reports to members. The information stays in their database for a maximum of five years according to ChoicePoint.
Insurance companies continue to look more aggressively for homes that could trigger future claims, like water or mold damage. More home sales continue to fall through because of insurance companies increased use of the C.L.U.E database, if buyers not able to get insurance they can't finance the deal, simple as that.
Now your home could possibly receive black ball status for filing one claim, not to mention getting paid for a claim. This is insane, but true.
Despite this alarming new trend used by insurance companies, you have ways to protect yourself and your rights.
1. Avoid telling your insurance company or agent about any problems with your home unless your 100% sure you'll file a claim. Insurance agents can be friendly and a good source of advice in the past, but understand any problems you report could go into the C.L.U.E database. The Result? They could use that information to raise your rates or in some serious cases refuse to renew your policy.