Don’t Buy Without a CLUE
(It’s hard not to title this post without a pun….)
One of the practices I have begun employing when representing buyers is to request a CLUE report from the home owner or seller.
CLUE is short for Comprehensive Loss Underwriting Exchange and it takes into account all insurance claims (and inquiries, too) on you and your property going back 5 years.
Why would a buyer be interested in your insurance claim history? Well, homes with multiple claims can end up being uninsurable. And if the home is uninsurable, it’s unlikely you’ll get a loan on the property. It’s a quick way for a transaction to go sideways.
The categories of ’causes of loss’ on a CLUE reports include smoke, water, wind, lightning, hail, and fire damage, as well as contamination, worker’s comp claims, liability, vandalism, and more.
Also, please note that even inquiries about potential claims can be noted on your CLUE report as ‘unpaid’ claims. For example, let’s say you call your agent to talk about a water pipe in the house that leaked one day and caused some damage. It may get noted on your report even if you didn’t file a claim, but rather fixed the damage yourself.
You can’t order a CLUE report on a property you don’t own–only the homeowner (or their insurance agent) has access to the report. So in the process of writing an earnest money agreement, make sure your agent includes a request in the additional provisions section. Also, get your homeowner’s policy ordered sooner than later in the home buying process to avoid any last-minute insurability snags.
As a home seller, consider being proactive and acquiring a copy of your CLUE report and providing it along with disclosures when an offer is accepted. The report costs $19.50 and can be ordered online. Visit www.choicepoint.com or call 1-866-312-8076 to order your report.
More information about CLUE reports can be found at this FAQ from the state of Washington.
Technorati Tags: insurance, CLUE, report, loss, homeowner, claims, advice
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1 comment July 19th, 2006
