Would you marry someone whose history was a mystery? Or are you prone to purchase a car without knowing the facts of its past?
To connect you with the history of a home you’re considering, we’re offering a free report, guaranteed to give you peace of mind and help you avoid time and money-wasting complications during and after the sale.
Get a clue! Come on, seriously.
A C.L.U.E., the Comprehensive Loss Underwriting Exchange, is a loss history information exchange provided by LexisNexis® Risk Solutions Inc. It enables insurance companies to access and use prior loss information in the underwriting process. Think of it as “the cloud of claims”.
Here’s how it works
Each month, participating insurers submit loss information to the C.L.U.E. information exchange, which is loaded to the C.L.U.E. database. Insurance companies request this data by forwarding search criteria such as an insurance applicant’s name, risk address, date of birth, and Social Security Number. The C.L.U.E. system searches its database for information that matches the requested search criteria. A C.L.U.E. report is then generated and forwarded to the insurer. When you or your insurance company receive a C.L.U.E. report, it includes all losses accessed by the search criteria that were reported to us within seven years of the date of the request. Home warranty claims are not included on a C.L.U.E. report.
The C.L.U.E. report is a valuable piece of information to provide you a clearer look into the prior loss history of the property you’re peeking at.
Reading the report
First, you want to look for claims associated with the risk address. The report can sometimes show claims filed on another location owned or occupied by the seller. You’ll want to look for claims frequency rather than severity. These would be claims that indicate a potential ongoing problem or the possibility for future losses. Multiple occurrences to the same areas in the home can indicate faulty or defective systems. For example, water losses and mold are big ones to look for and are one of the most widely reported causes of loss or perils. Other perils to watch out for are fires occurring in the home, not wildfire, and theft or burglary. These type of losses could indicate morale hazards or the home could be in a questionable area. Insurance companies are tightening their guidelines when it comes to water losses resulting from inside water damage, not weather related flood claims. Effective this year, many admitted insurance carriers will decline a risk if there has been a significant water loss on the property within the last 3-5 years. This would include damage exceeding $2,500. Normally, losses follow the insured and can impact the cost of insurance or insurability when moving to a new location. Due to the rise in frequency and extensive costs resulting from water damage claims. more and more companies are looking at water losses at new business and declining.
One Final Thought
The cost of the damage is important and can indicate the severity of the incident and the amount paid by the insurance company for the loss. Accidents happen. Just because a property has been impacted by a large claim or series of claims does not mean you should avoid buying that house. Review the report with your realtor and request a disclosure from the sellers about how the claims were resolved. Were all repairs completed and was everything built back to code? Was the home replaced with like kind and quality?
Talk to your insurance agent about the loss(es) that were filed, how the insurance companies handled the claims and how this will impact insurance for the home moving forward.