“They raised my premium after I asked a question”: inquiries vs claims

Here's the thing to know about calling an insurer: the person who answers isn't always set up to just chat. Many claims lines are built to open a file. You said "ceiling," "water" and "upstairs bathroom," and to some systems that's a loss notice whether or not you meant it as one.

So your hunch is fair. Asking a question may well have created a record. Whether it cost you is a separate question, and that's what we're going to find out.

Questions, notices and claims

There are three different things that can happen when you phone your insurer about damage:

• A general question. "Does my policy cover water damage from a plumbing leak?" Asked without describing a specific event, this is a coverage question and usually isn't logged as anything.
• A notice of loss. You describe a specific event at your home: a date, a stain, a cause. Some insurers open a file, sometimes with a claim number, even if you never ask for money.
• A claim. You ask the insurer to pay.

The second category is where readers get caught. A notice of loss can be closed with no payment, and that closed file can still appear in the claims databases insurers share.

Where it shows up

Most home insurers contribute to and check a shared claims-history database. The best known is the CLUE report from LexisNexis, which lists losses reported on a property and by a person, including the date, the type of loss and the amount paid. A file closed with no payment can appear on it with a zero.

How a zero-dollar entry is used varies by insurer and by state. Some states restrict insurers from using an inquiry that didn't result in a claim, or a claim closed without payment, to raise a premium or refuse a policy. Your state insurance department's website will say whether yours is one of them. Search its name plus "inquiry" or "claims history."

Step one: see the file yourself

You don't have to take anyone's word for it. Under the Fair Credit Reporting Act, you can get your own CLUE report free once a year. Request the personal property report from LexisNexis's consumer site. It will show whether anything was recorded last spring, and how.

If you see nothing, the "loss history" note is about something else, and you'll ask about that on the call. If you see an entry from last spring, now you know.

Step two: the call

This is the call where you're not asking a coverage question, so it's safe to be specific. Have your policy number, the renewal notice, the date you called last spring and your plumber's receipt in front of you. The sidebar has my script. A few things I've learned about making it work:

• Ask for policy service or underwriting, not claims. Underwriting can tell you whether the file was used in your renewal price.
• Get the file number, and ask for every answer by email.

Step three: getting it corrected

If the call was logged as a loss notice and you never made a claim, ask for two things in writing: that the file be recorded as an inquiry with no loss, and that the entry be corrected in the reporting database. Attach the plumber's receipt; it shows the repair was a maintenance fix you paid for.

If the insurer won't change it, you can dispute the entry directly with LexisNexis under the FCRA, which requires the reporting company to investigate. And you can file a complaint with your state insurance department, which handles exactly this kind of question.

For next time

Before calling your insurer about damage, get a contractor's estimate first. If the repair costs less than your deductible, there's nothing to claim and no reason to describe it to the insurer. If you do want to ask a coverage question, read the policy's water damage section first, then ask in general terms.

You asked a reasonable question. The system just wasn't built to hear it as one.