January 31st, 2015 4:26 PM by Dan Howard
CLUE Report can Solve Your
New Home's Mysteries
looking at what may be your dream home. The house looks great, but it also
looks like there may have been a roof leak, or maybe a tree fell against the
house or sewer backup. Maybe you did not
notice any of these potential indicators of previous problems, and the seller
may have "forgotten" to
mention the previous home tragedies .
your surprise to find out that the home you just purchased had a fire, mold
problems, or a flood from broken pipes.
If you do not think that happens, I can tell you first hand that it
does. As an inspector, I hate the panicked look on a client's face when I ask
questions like: "Did you know there was a fire in this home?"
Unveiling the Disaster Response Cover up
is one disaster response franchise that uses the advertising tag line "Like it never
happened". The point they are
trying to make us is that the evidence of the disaster or tragic event will not
be visible. However, if "it" really
did happen, it could affect the insurability of the home and be an indicator of
"covered up" defects. A
$10,000 mold cleanup that did not address the cause of a mold problem could
become your $10,000 problem next year. Broken pipes from freezing can be
avoided if you know what conditions cause the broken pipes. Knowledge is power
to avoid previous problems learned from experience.
detective work can save you a lot of
headaches when you purchase your next
home. To help you do that due diligence, let me introduce you to the
CLUE report . CLUE stands of Comprehensive Loss Underwriting Exchange.
We have all heard of CARFAX. This service
tells you all the dirty little secrets of the previous owners of the used car
you are about to purchase. What most of
us have never heard of is this very similar service for homeowners and home
The Potential Land Mine News About Your CLUE
insurance companies argue that the benefit to consumers is that the service
helps to keep premiums lower for good customers by avoiding higher risks.
Repeated claims on a home can be indicative of
a building with many problems or an insured that commits fraud or makes
bad claims. This is sometimes true. There
can be a solid argument for this "risk avoidance" by the insurance
companies. This is not a "good thing" when your "new to you" home is the one
being kicked to the insurance policy curb because of the previous owner.
reports can be a nightmare for a new and unsuspecting buyer purchasing a
property. Most states allow insurance companies 60 days after issuing a policy to
review adverse information about a home. You could lose your homeowner's insurance 30 to
60 days after you purchase a home
because of what was on the previous owners'
CLUE report. Most
lenders require that homeowners insurance remain in force, or they can
foreclose on the home.
CLUE Reports are administered by
CHOICEPOINT, which is a data management company. The reason to know about this
company is that at the same time they manage the data relating to your home, they also manage your personal data as the
homeowner. The data provided in CLUE
reports includes policy information such as the homeowners name, date of birth,
policy number and claim information such as date of loss, type of loss and
(Automated Property Loss Underwriting System) is another company that provides
the same service as CHOICEPOINT. The insurance Services Office, an insurance
industry organization, runs A-Plus to which about 1,250 companies contribute. Most
people refer to the reports generated by either system as CLUE reports and for
simplicity, we will do the same here.
Requesting and Using a CLUE Report as a Home
as a buyer is in the process of purchasing a home, you can't order a copy of
the home's CLUE report. On the other hand, you can request that a seller obtain a copy of the report and
provide it to you as the buyer. The seller can obtain a copy of their report
through their insurance agent or at the website:
the real estate has closed, the buyer is then the owner, and can obtain
the CLUE report using the methods above.
However, the new homeowner may find a "surprise"
of previous claims too late to protect from buying a problem property.
realtors are now encouraging buyers to start shopping for homeowners insurance coverage
early in the real estate transaction process. They can include a contingency
that the purchaser must be satisfied
with the insurability of the property for the transaction to proceed.
Keeping You Out of the CLUE Controversy
of the most controversial issues surrounding the information found in the CLUE
database is that an innocent inquiry from a homeowner to their insurance
company concerning their deductible or a possible claim, can trigger a file to
be opened in the CLUE database-even if the homeowner does not file a formal
claim. Keep this in mind when discussing
potential claims with agents and insurance adjusters.
When Buying or Selling a Home, Get A CLUE
selling, get a CLUE report before listing to avoid an embarrassing disclosure
problem. This kind of surprise can derail a
house sale. The report is free, and the avoidance of problems is
priceless. A buyer that needs a mortgage
will not obtain that mortgage unless they can purchase homeowners insurance. As
a seller, if a deal goes south before closing over insurance issues, it will be
very difficult to find another buyer.
buying a home, request a CLUE report
from the seller at the same time you make an offer. If there was a
serious problem, the information can help your home inspector investigate the