YOU ASK:

Can the insurance show a claim from a previous owner of your home on your homeowners insurance record?

WE ANSWER:

The insurance company may keep a record of the claims history of the house you now have, including the claims history it had with its previous owners. One reason for this is that the insurance company would of course want to know whether your home is indeed insurance and that it is a good risk on the part of the insurance company to insure your home.

Another reason is that the insurance company would like to know what kind of claims your house will possibly have. This can also be used as a basis in how much premiums they will charge.

The insurance industry holds a database of claims history and the insurance company itself will have records of the claims history of their present and previous clients. The insurance industry has databases such as the Comprehensive Loss Underwriting Exchange (C.L.U.E.) and the Automated Property Loss Underwriting System (A-PLUS). Records on flood claims are also recorded in the NFIP database.

When the insurance company receives your application, they will run a claims history report. It will show if the previous owner of the house and you, the new owner of the house, had claims from any insurance company for the last seven years. This includes not just paid claims but also claims that were not paid due to the fact that the owner decided to make the repairs on the damage and not claim from the insurance company anymore.

When the insurance company runs a claims history report, you also have a right to get a copy of the report provided to the insurance company, provided that you are the current homeowner.

That is why it is important to look at the claims history of any house that you are planning to buy, particularly a house that already had a number of owners. Even if you can't have direct access to the claims history report, you can ask the prospective seller to provide this report to you.

Some states have passed laws to provide consumer with some level of protection regarding claims history:

  • In some states, inquiries to the insurance company that do not become actual claims should not be included in the claims history report.
  • Some states also require insurance companies to notify you when they will provide information to a claim database such as CLUE.
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