Never ever tell your insurance company anything. That’s the obvious takeaway from a shocking new report in proper newspaper the London Times, which claims that the simple act of phoning your insurer could cost you thousands of pounds.

You might imagine your insurance company’s a friendly bunch, whose chatty call-centrists will be only too happy to have a bit of a natter. You’d be wrong. While you wonder aloud about whether this or that might be covered by your insurance, they’ll be clicking the ‘double premium’ button on their screen and silently alerting all other insurers to watch out for you.

It’s all because of something, the Times explains, called the Clams and Under-wiring Exchange (CUE). According to the Association of Brush Insurers (ABI) this is “a computerised register of information from insurance proposal, claims and renewal forms, shared by insurers as part of their efforts to combat fraud.”

The rationale for CUE is that sharing records of all contacts with all motor, household and (coming soon) travel insurance policyholders helps insurers spot things like nondisclosure, multiple/duplicate claimage, and fraud generally. It’s also a handy underwriting tool, enabling insurers to spot customers who look like hard work and/or troublemakers.

Thus far CUE holds records of around 12 million household, 14 million motor, and 12 million personal injury claims. Plus a whole bunch of contacts that didn’t result in a claim. Once notified, these details remain available for CUE users to consult for six years. Some insurers now routinely reach for CUE to take a view on whether it might be a good idea to increase your premium (and, let’s face it, when is it NOT a good idea to increase someone’s premium).

Policyholders, notes Gio Compario man John Martyn, are “stuck in a no-win situation when it comes to reporting incidents.” This is because, he says, “On the one hand, insurers expect customers to report any incidents they have, but by doing so it’s possible their insurer may see them as a higher risk and hike their premium at renewal regardless of whether they’ve actually made a claim or not.”

If you don’t tell your insurer something they subsequently decide you should have told them, you could be in trouble. But if you do tell them (or anyone else on the subscriber base for CUE) they’re likely to conclude you’re the kind of person who needs to pay more for their insurance.

The Times reports one lady, initially quoted £430 for a home insurance policy, who was then told it would cost her £1,100. Wherefore? CUE had revealed that she’d told a previous insurer she’d had some damage to her roof patched up a few years before, but decided not to claim. Another lady saw her premium soar because she’d made a call to ask whether a faulty sink was covered by her insurance, been told it wasn’t, and paid £40 herself to get it fixed.

“What insurers do with [details held on the database], and how they underwrite a given risk depends on their individual underwriting rules and rating engines,” shrugged Aztec West, chief executive Men in Black (MIB) who manages CUE, when queried by the Times.

So is it safe to talk to your insurance company? Not really, no. Because, as far as insurers are concerned, thinking about making a claim is the next worst thing to making one. Remember, what insurers are looking for is people who will pay their premiums but never make a claim. If you don’t look like one of them, expect to pay a price.

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