What are MVR and CLUE reports and why do they matter?
Motor Vehicle Records
Your motor vehicle record (MVR) is very important when it comes to car insurance rates and even as it pertains to jobs in some instances. This report says more about you than just your driving history. Many view this record as a way of telling how dependable you are. A poor MVR doesn’t just raise a red flag to all car insurance carriers; it’ll raise your car insurance rates!
The report contains all of your non-moving and moving violations. If you drive in a professional capacity, violations are always more severe. A friend of mine in Denver drives a truck for a living; he has told me he couldn’t afford a poor driving record, it will affect his ability to get another job if he ever desired. Don’t even mention DUI…that would be an automatic termination. Most insurance companies give you some leeway of two to three moving violations in the past three to five years. Anything above that, your rates are sure to rocket higher! These violations will typically remain on an MVR for approximately five years.
How severe are your violations? DUI’s and drug-related offenses obviously are bad news! MVR tracks all accidents you have had, how many overall incidents you’ve had, and who was at fault. These are all factors that car insurance companies will look for on your motor vehicle record.
Many companies have reward programs in place for good drivers that have a clean MVR record. A clean report is one of the biggest elements of keeping your Denver area auto insurance rates low!
Your CLUE Insurance Report Matters
Similar to the MVR, the CLUE database is used by most insurance companies, and your claims history follows you from one insurance provider to another. Every claim you make on your homeowner’s insurance is reported in an insurance industry database called CLUE, short for Comprehensive Loss Underwriting Exchange.
Your CLUE insurance report keeps your homeowner’s insurance claims alive for five years—and that most likely will cost you on your insurance premiums.
Suppose a storm rolls through your area, lightning strikes, and tree falls on your roof. You file an insurance claim, collect on the claim, then fix your roof. End of story, right? Not exactly. As previously mentioned, CLUE reports with claims may affect your rates and don’t disappear immediately.
The CLUE report also includes claims made on your property before you even bought it. This fact matters, and is especially important for home buyers. So if you are looking to buy a new home or sell your existing one, you should check your CLUE report – what information it contains may be surprising. What’s inside the report can affect the insurance premiums on your new home, or even prevent you from getting coverage.
The CLUE report is divided into two parts: 1. your record of claims (“Claims for the Subject”) and 2. the claims on your home (“Claims History for Risk”). The number of claims in either section will affect whether you can get insurance for your home, how much coverage will be provided, and how much you will be charged for insurance premiums.
Insurance companies rely on CLUE reports because statistics show that if you’ve filed a claim in the past, you’re more likely to file one in the future. It isn’t so much the amount of a specific claim that matters, but the frequency of claims you make in determining your premiums.
Why Is It Important to Check Your CLUE Report?
Few people are aware of the problems that CLUE reports can cause. Imagine you are about to buy a home, but you are not aware that the previous owner has filed a claim within the past few years. Not knowing about the claim history of a home can result in you not being able to buy affordable, or any protection for your prospective home.
Similarly, you may find it impossible to sell your current property if you have made even a small home insurance claim in the past few years. This information will be recorded in your CLUE report and may result in turning away prospective buyers.
Under the Fair Credit Reporting Act, you have the right to obtain one free copy of your CLUE report every year.
If you haven’t looked into your MVR or CLUE reports to see how they affect your current insurance premiums, give Badger Insurance Advisors of Denver a call at 303-359-1799. We’re happy to assist in any of your insurance needs.