Many home insurers count inquiry calls -- calls in which homeowners simply ask informally whether their policy will cover certain damages and are told that it won't -- as unpaid losses.

Most insurance companies file loss information, paid or unpaid, into a centralized database called the Comprehensive Loss Underwriting Exchange (CLUE). Even if a policyholder just makes a phone call and doesn't report any damage, there's still a possibility the call will get logged into the CLUE report as an unpaid loss. The information stays on the record for five years, and can mar homeowners' chances of getting a standard policy next time they apply for insurance. When a homeowner applies for a new policy, the insurance company usually orders a copy of his or her CLUE report. Two or more reported losses, depending on severity, can cause an applicant to be charged a double or triple premium or to be denied coverage altogether.

"Each carrier has its own set of rules," says James E. Lee, ChoicePoint's chief marketing officer. "Some companies log every call." While lawmakers in several states are trying to rein in insurers over this issue, there's not much consumers can do to fight back. But homeowners can take basic steps to protect their CLUE reports:

1. Know the specifics of your insurance policy and the deductible. Refrain from calling your insurance company to ask basic coverage questions that can be answered elsewhere.

2. Avoid preliminary calls. It's not necessary to get in touch with the insurance company unless you plan to file a claim and know the damage will be covered.

3. If you do need to call the insurance company, don't mention actual damage unless filing a claim. Any mention of damage will likely be recorded as a loss, regardless of whether it's covered.

4. When in doubt, call a professional repairman first to get an estimate. Insurance companies often will send out a repairman to estimate damages before committing to coverage anyway.

5. Report only major damage. Reporting small damages can put an abundance of unnecessary claims on your report.

6. Check your CLUE report. All consumers affected by their reports can ask for a free copy. ChoicePoint sells reports for $9 by mail, $12.95 for Web delivery. Residents in several states can get a free or discounted copy annually. Anything in the report can be disputed, and ChoicePoint has 30 days to settle it.

This is an excerpt from The Real Estate Journal, August 14, 2003.