You have many factors to consider when you are in the market to buy a home. Did you know one of the top things should be a CLUE Report? If you are unfamiliar with this report, it’s time to learn about it. This report could save you time, money, and a lot of headaches.
What is the CLUE Report?
CLUE Report stands for the Comprehensive Loss Underwriting Exchange. This is a database of claims homeowners have made on their property in the past 7 years. It only contains information that each insurance agency provides, but it can give you helpful information when you wish to buy a home.
The report provides a history of claims that may or may not have an impact on what you think of the home. The claims could range from burglary to a leaking roof and everything in between. It helps give you an idea of any patterns that might emerge with the claims and give you something else to think about when purchasing the home.
What Should you Look For?
Many homeowners make claims on their homeowner’s insurance. That’s not a red flag. What is a red flag though, is if there is a repeating pattern of claims.
Let’s say, for example, the home you look at has 4 claims due to water damage. This might alert you that there is something wrong with the home. It could be its location. Is it too close to a body of water? It could also be due to a lack of proper maintenance on the home.
You might also look for a string of claims due to theft. This could signify that the area is high risk. If you still want to buy the home, you may want to consider installing an alarm or security cameras on the property. Again, it just gives you an idea of what you might expect when buying the home.
What Information Will You Find?
Unfortunately, you won’t get a whole lot of information when pulling the CLUE Report. You’ll learn:
- The name of the insurance company the homeowner made the claim with
- The policy number of the insurance policy
- Date of the claim(s)
- The type of loss (burglary, water damage, etc.)
- The amount of the claim
- Whether the claim was approved or denied
Any other information you want, you will have to get from the homeowner. However, it gives you a conversation starter when talking to the homeowner. If you know, for example, that there was a string of burglaries, ask the homeowner about them. Was it a neighborhood issue or was it an isolated occurrence? You can ask any questions of the homeowner regarding what you see on the report and hopefully they will be honest with you.
Who Can Pull the CLUE Report?
Each home is entitled to one free CLUE Report each year. However, only the homeowner can request it. Savvy sellers will already have done so and have it available for potential buyers. If your potential seller does not have the report, ask for it. This can be another indicator of their honesty. If they hesitate and don’t want to request the report, they may be hiding something. If the seller happily requests the report for you, though, it could be a sign that there is nothing they want to hide.
Use CLUE to Estimate Homeowner’s Insurance Premiums
Aside from the fact that the CLUE Report can help you determine if you want to buy a home, it can also help you determine how high your insurance premiums might be. For example, if there was a serious issue with the roof and the homeowners had it replaced, your premiums may be lower than you thought.
If, however, there is something like a multitude of burglaries, your homeowner’s insurance may skyrocket.
You’ll want to include these factors into your decision. Can you afford the premiums? Call around to various insurance agents to see their take on the home’s history and how it would affect you.
It’s highly recommended that every buyer that is serious about a home get the CLUE Report. Don’t mistake it for a home inspection replacement, though. Use both tools to your advantage to help you decide if the home is right for you.