Anyone who has ever tried to get a house knows what a nightmare it can be. You have to deal with reams of paperwork and credit checks, and you have to make sure that you can afford both the mortgage rate and the homeowners’ insurance policy.

Those who own their own homes also have their own set of headaches to worry about. Upkeep and utilities have their own costs, and every homeowner with a mortgage has to worry about keeping an insurance policy up to date.

But both homeowners and prospective home buyers are discovering that, thanks to an existing insurance claims monitoring database called CLUE, their insurance policies can be cancelled for reasons that had nothing to do with them, or they will find themselves dropped from their insurance coverage for something as simple as asking a question.

What is CLUE?

CLUE stands for Comprehensive Loss Underwriting Exchange. It is a database that tracks insurance claims information on both people and property, and it is scrupulously studied by insurance companies every time you try to buy a policy.

This shouldn’t come as a surprise. Insurance companies study practically every conceivable factor in order to determine how much risk is in anything that they want to insure. They study weather patterns to determine how much of a risk a property might be for wind or raid damage. They study insect migration patterns to determine the risk of termite damage. They study the rainfall averages in wooded areas to determine how much of a risk there is for fire damage. These numbers are crunched and studied and gone over by insurance company actuaries with a fine tooth comb. This is part of how they determine what to charge you on a monthly basis. This is also the reason that no insurance companies offer flood insurance to property owners that live in areas that are close to rivers or near levies. Insurers offer policies based on what might happen; they won’t offer anyone a policy on something that is more than likely to happen.

CLUE is part of this research. Every time any homeowner makes a claim, whether it is rejected or not, that claim goes in the CLUE database. What was the claim? Was the claim viable? How much did the claim cost the insurer? Were there any secondary costs, or was the overall value of the property affected? Is this the first claim that the person has filed? The answers to all of these questions are now available to every single insurance underwriter in the country.

How CLUE Affects Homeowners

Let’s say that you are in the process of buying your own home. You have a perfect credit record and a spotless insurance history. You close on your house, move in, get settled, and call to inquire about a homeowner’s policy. You get the news that, for reasons that had nothing to do with you, your new home has been blacklisted as a risk by every insurance company, and either no one will give you a policy or you will have to pay through the nose for a ridiculously high premium.

This puts you in a fix of either having to dig deeper into your pockets in order to buy a policy or facing the risk of going without any insurance at all.

The reason you got blackballed was because the person that owned the home before you had the audacity to actually use their homeowner’s insurance policy. Maybe the basement flooded once. Maybe a tree branch fell and damaged a gutter. Maybe an outdoor drain backed up. Any claim made on an insurance policy, no matter how small and insignificant, gets placed into the CLUE database, which is then made available to any adjuster. The catch here is that claims adjusters rarely ask for a CLUE report until the house is in escrow: in other words, until the home is practically already bought.

It would be one thing if insurers were simply using CLUE to help determine the risk of a property. Instead, they are also using it to weed out and drop those who would file claims:

When Kristen Angel's drains backed up, she called her insurer to see if they were covered. She fixed the problem without filing a claim. So imagine her shock when her insurance company dropped her just, she says, for asking that question.

"There was no damage, no claim, simply an inquiry," Angel told CBS News Correspondent Bill Whitaker.

Ms. Angel just asked a question and didn’t file a claim, but the fact that she had the nerve to even ask somehow struck the insurance company as risky. The story got even worse, as Ms. Angel found herself unable to get a new insurance policy because, according to the CLUE database, she might file a claim one day.

This makes us ask: What is insurance even for? If insurers have the right to drop you for any reason, whether it is justified or not, or if they can drop you because they suspect that you might one day have the need to actually use the policy, then what is the point?

As personal injury attorneys, most of our cases involve suits against insurance companies. We deal with health insurance companies that routinely deny treatment, or car insurers that refuse to acknowledge legitimate claims of damage. We are in a constant fight for the rights of those that bought an insurance policy in good faith and very cruelly found out that they were simply mailing in checks for no apparent purpose.

If you or a loved one has been in an accident that wasn’t your fault, and you find that the insurance company involved is not taking your needs seriously, you have legal options. Our attorneys have the experience necessary to tell you whether or not you are receiving fair treatment. Contact The Dover Law Firm for a free legal consultation today.