Georgia Homeowner Battles Insurance Fraud After Fake Fire Claim Hits Credit Record

A Kennesaw homeowner’s routine day turned into a months-long nightmare after discovering someone had filed a fraudulent insurance claim for fire damage on her recently renovated home, forcing her into an uphill battle to clear her record and avoid higher insurance premiums.

Renee Arbogast, who had completed extensive home renovations two years earlier, was shocked when her husband received an alert in March about an insurance claim filed for fire damage at their property.

“My initial thought was, is there a fire?” Arbogast recalled asking her husband. “And he said, ‘I’m at the house. There’s nothing here.'”

Despite immediately reporting the false claim to her insurance company, Arbogast struggled to get action. For weeks, she pleaded with her insurer to investigate the situation as fraud, but according to her, the company never sent an adjuster to verify whether a fire had actually occurred at the property.

The Georgia Office of Commissioner of Insurance and Safety Fire eventually stepped in to investigate the case. Their findings revealed significant verification failures by the insurance company, which “did not confirm the property owner’s name” when accepting the claim. The investigation concluded that “if this information had been verified, a claim would not have been initiated.”

By then, however, the damage was already done. The false claim had been recorded in the Comprehensive Loss Underwriting Exchange (C.L.U.E.), a database used by nearly every insurance company nationwide to track claims history.

The C.L.U.E. system maintains records of home and auto insurance claims for up to seven years. When consumers initiate claims, are denied coverage, or receive claim payments, this information is uploaded to the database. Inaccurate or fraudulent entries can significantly impact insurance premiums for years to come.

“You could wind up paying hundreds or even thousands of dollars more in premiums unfairly,” explained Michael DeLong, an advocacy associate with the Consumer Federation of America, a prominent consumer watchdog organization.

The true scope of C.L.U.E. database errors remains unknown since the insurance industry restricts access to the information, sharing it exclusively with other insurance companies. However, there have been notable instances highlighting the system’s flaws.

In 2003, California’s former insurance commissioner cited errors in the database after his own consumer services chief was denied homeowners’ insurance five separate times due to multiple inaccuracies in his record.

“Insurance companies have a fairly long history of treating consumers poorly,” DeLong noted. “If there is a mistake that is against the consumer, they may not make fixing that a high priority.”

After months of persistent advocacy, Arbogast finally succeeded in getting her insurance company to remove the false fire claim from the C.L.U.E. database. The experience prompted her to share her story publicly to raise awareness about a problem many consumers don’t know exists.

“Most people don’t have the resources,” Arbogast said. “For us to advocate in this way has cost us so many thousands of dollars alone. I want to protect other people from this happening.”

The case highlights vulnerabilities in insurance verification processes and the potential financial consequences for homeowners when false claims go undetected. Insurance industry experts recommend consumers regularly check their C.L.U.E. reports, especially before shopping for new insurance coverage.

Under the Fair Credit Reporting Act, consumers are entitled to a free copy of their C.L.U.E. report annually. To obtain a copy, individuals can contact the LexisNexis consumer center online or call 866-312-8076. Prospective property buyers should note that only current owners can request reports on properties.

Consumers who discover inaccuracies should contact the LexisNexis Consumer Center at 888-497-0011. The company will verify information with the reporting insurance company and provide results within 30 days. Consumers also have the right to add explanatory statements to disputed items that will appear in future reports.

Georgia residents can file complaints regarding insurance issues through the state’s consumer complaint portal or by downloading and mailing a form to the Georgia Office of Commissioner of Insurance and Safety Fire.