If you don’t have a CLUE, don’t be embarrassed! Most Americans don’t have a CLUE and have never heard of the CLUE database, but if you are a home buyer or home seller, it’s probably a good idea to get a CLUE!
Get a CLUE! What’s a CLUE? Do you have a CLUE?
CLUE stands for Comprehensive Loss Underwriting Exchange. The exchange is a claims history database generated by LexisNexis enabling insurance companies to access claims information on a property before they underwrite, rate, or quote an insurance policy. The exchange will list insurance losses on a property going back seven years. The majority of home insurance companies contribute records of their losses to the database.
As a home buyer, should I get a CLUE?
Getting a CLUE report during the contract due diligence period in the purchase contract can save the home buyer from getting an insurance surprise when shopping for insurance. An example is when a property has had three flood claims in the last five years. That information could make it difficult to obtain insurance at a reasonable price, or maybe not at all. Having the information could help the home buyer determine whether or not they actually want to buy a particular home.
Sounds like a good idea to get a CLUE before buying a home! What’s the catch?
A CLUE report can only be ordered by the property owner. If a home buyer wants to get a CLUE report, the best way to ask for one is to include a request for it as a provision in the purchase offer.
As a home seller, should I get a CLUE?
As a potential seller, you can order a CLUE report before the property comes on the market. This enables you to see if the CLUE report has correct information. If the information is incorrect, you can take steps to get it corrected. Then you can share the CLUE report with the home buyer to help them have the confidence that insurance can be obtained for the property.
What does it cost and where do I get a CLUE?
Under the Federal Fair Credit Reporting Act, if you are the property owner, you can obtain a CLUE report, once a year, for free. A CLUE report is available online at personalreports.lexisnexis.com or by calling 866.312.8076. You can also ask your insurance agent for assistance to obtain one for you.
I’ve got a CLUE! Now what?
A home buyer with a CLUE report can review it for any claims that could lead to higher than anticipated insurance premiums. Examples could be frequent burglary claims, flood claims, etc. If there is some hazard on or near the property that will probably continue, insurance is likely to cost more. Recent claims may not be a negative factor. For example, a recent roof claim when handled properly with a new roof has been installed, could actually make the property more attractive to an insurance company.
If I have a CLUE, do I still need an inspection?
An inspection is never performed to generate a CLUE report. A CLUE report gives no recommendations about a particular issue – it only communicates what the circumstances of the insurance claim were. However, a CLUE report is a great tool to share with the home inspector. The home inspector can review the issue and check to see that any repair work was done properly.
Be sure to consult your Realtor® and your homeowner’s insurance agent to determine if getting a CLUE report is right for you.
By Duane Duggan. Duane has been a Realtor for RE/MAX of Boulder in Colorado since 1982 and has facilitated over 2,500 transactions over his career, the vast majority from repeat and referred clients. He has been awarded two of the highest honors bestowed by RE/MAX International: The Lifetime Achievement Award and the Circle of Legends Award. Living the life of a Realtor and being immersed in real estate led to the inception of his book, Realtor for Life. For questions, e-mail Duane at DuaneDuggan@boulderco.com, call 303.441.5611 or visit boulderco.com.