CHARLOTTE, NC — Diane Vaglio loves nature but it doesn’t always love her.
“There was an issue with the flashing over there, so then water came in and then it left [a] large water mark on the ceiling,” she said.
She says she filed a claim with her insurance, MetLife.
“So they determined that the damage was $1,008. OK. So, they sent us a check for $8 because I had [a] $1,000 deductible,” she said.
She says four or five months later, “The tree was over here … it got hit by the lightning and then cracked in half and made a mess out of the yard.”
So, she says she filed another claim and MetLife paid $500.
Then about seven months later, “I get the letter that says we’re dropping you,” she told Action 9.
“It’s like why are you dropping us? They said, ‘Well because you filed two claims last year,’” she said. “I have almost a perfect credit rating, never missed a payment, and over the 10 years we’ve had MetLife, I gave them over $30,000. And for $508 I’m getting dropped?”
Vaglio says she offered to give the $500 and/or the $8 back, but the insurer wouldn’t take it.
“So, then I started calling other insurance companies and they looked me up. ‘Oh, you just got dropped. You’re on the list,’” she said. “I go, ‘The list?’ I was like, ‘What do you mean?’”
MetLife wouldn’t discuss her case with Action 9. But it’s not just that company. Chances are, yours does the same thing.
Mark Friedlander is with the Insurance Information Institute, the group that speaks for the insurance industry.
Action 9′s Jason Stoogenke asked him if this was fair. “You have insurance for a reason, but then you kind of get punished for using it, right?”
Friedlander says filing two homeowner claims within a short timeframe usually does raise a red flag and labels you high risk, even if you have never filed a claim before. “It’s all about risk,” he said. “To us, it’s a very fair process. Higher risk leads to higher costs.”
Stoogenke noticed a lot of people venting about this on social media recently. One person posted her experience and it led to a flurry of people commenting, including Vaglio.
That said, typically, your insurer can’t drop you in the middle of your term, but it can wait until your term is up and not renew you.
“They are in business to pay your insured losses,” Friedlander said. “If it is something that is covered in your policy and you file a claim for it, you should get the claim paid.”
But as Stoogenke points out, the flip side is that you may not get renewed at the end.
“But they’re not going to tell you, ‘You know what? Pay it out of pocket. It’s better for you in the long term.’ That’s not the obligation of the insurance company,” Friedlander said.
As Vaglio touched on, insurance companies share that information with other insurers -- even their competitors. They do it in a national database called C.L.U.E., the Comprehensive Loss Underwriting Exchange, and it keeps your information for seven years. Friedlander says companies may not consider you high risk that whole time, but you won’t officially get off the list until it’s up.
Vaglio says she didn’t have many choices after that. She says her best option was to see if MetLife would keep her if she paid a lot more. She says that’s what ended up happening.
She says she finally got off the C.L.U.E. database list years later then switched companies, and now she wants to warn others.
Advice from Action 9:
- If you already filed one home insurance claim this year, think carefully about whether to file a second. If you can afford to pay it on your own, you may prefer that.
- Ask your agent if filing that second claim may cost you your renewal later. Even though agents don’t have to offer that information, they should be honest if you ask.
If your insurance company does drop you:
- In North Carolina, it has to let you know in writing 30 days before your policy is up. In South Carolina, it’s 60 days. So, you should have time to shop around.
- If you use different companies for home and auto, definitely see if the one with your auto policy will add your home policy. They like to bundle.
You can request your own C.L.U.E. report through LexisNexis Risk Solutions online here or by calling 1-888-497-0011.
All consumers are entitled to one free disclosure every 12 months. To submit a request, provide your first name, last name, street address, city, zip code, and date of birth. Depending on the type of request, you may also be required to provide either your social security number or your driver’s license number and state. “The information that you provide will only be used by LexisNexis Risk Solutions to verify your identity and to process your request,” the company told Action 9.
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This can happen with your auto insurance as well, but it’s much less likely because insurers use different formulas for assessing the risk on those claims. Insurers report both home and auto claims to C.L.U.E., but the database tracks them separately. In other words, if you have an auto claim and a home claim close together, that doesn’t flag you as high risk.