What CLUE Reports Mean to Homebuyers

We are all aware of Credit Reports and how our credit reports affect our ability to obtain future credit — especially when purchasing a home. But did you know that the Insurance Industry also keeps track of homeowners and their Insurance histories?

The bottom line to CLUE Reports is that a home with multiple claims against it can be potentially uninsurable. No Mortgage lender will make a loan on a property that cannot be insured since that property is their collateral in case of default. By the same token, CLUE Reports track individuals who jump from one insurance company to another for personal gain — in other words, to commit fraud.

CLUE Reports provide a tool for both Homeowners and Homebuyers alike to assist them in making certain selling and purchasing decisions. Just because a homeowner had to file a claim does not mean the home is uninsurable. For instance, if the Homeowner filed a claim for a new septic system, a buyer can have peace of mind that their septic system is new when they purchase the home.

Below are some of the “Causes of Loss” which CLUE’s databases track, showing why a claim was submitted to a property/casualty insurer for payment:

  • Contamination
  • Damage to Property of Others
  • Dog Bite
  • Earthquake
  • Fire
  • Flood
  • Freezing Water
  • Hail
  • Liability
  • Lightning
  • Medical Payment
  • Slip/Fall
  • Smoke
  • Theft/Burglary
  • Vandalism
  • Water Damage
  • Wind
  • Worker’s Compensation

Only the homeowner can order a CLUE report on a property. That is why a well-informed Buyer should insist on getting a copy from the Homeowner prior to making an offer and why Homeowners should have one ready when they place their home on the market.

Word of Warning: CLUE standards include inquiries as marks against you — not just claims for payment!

For example: If your hot water heater leaks and you sustain water damage, you can file a claim and your insurance will pay for the repair after your deductible is met. This claim will show up against you on your CLUE Report, as expected.

Now, let’s say your hot water heater leaks and you sustain water damage. Same situation as before. Only this time, you call your insurance company and only inquire about how to go about dealing with this problem. In the end, you get your neighbor, Handy Man Roy, to fix the damages and never file an official claim… the INQUIRY will show up in your CLUE Report as an ‘Unpaid Claim.’

Not nice! It is up to YOU to educate yourself when it comes to your insurance. We all know how car insurance works — the more claims you file, the higher your premium and the increase in likelihood that they may drop you altogether. Homeowner’s Insurance works under the same premise.

Consider paying small expenses out of pocket. Know your deductible and never call and inquire about these small claims as they will appear on your CLUE Report as a “Claim” regardless of the fact that it was never officially filed or paid out. Shop around for coverage. You should get quotes from at least 3 other insurance companies.

Remember, just as with Credit Reports, you are eligible for a FREE CLUE Report if you are ever denied insurance due to information it contains. Check your Credit Report. It can affect your insurability. Excellent credit with a relatively low scoring CLUE Report on the home you’re purchasing may persuade an Insurance Company that you are not a bad risk even if the house may be.

Do You Have a CLUE?


What is a CLUE Report?

A CLUE Report is an Insurance equivalent to a Credit Report on you and your property going back 5 years and considering all claims and inquiries.

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