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About Clue Report (Comprehensive Loss Underwriting Exchange)
When buying a new home, homeowners need to buy a home insurance policy to protect their home from any potential damages.
However, did you know that the insurance company might decline a policy under certain circumstances?
With the help of a comprehensive loss underwriting report, potential homeowners and insurance companies can get details about any claims made on a particular house in the past several years.
In this post, we will understand what is a CLUE report in detail.
What Is CLUE Report?
The CLUE, short for Comprehensive Loss Underwriting Exchange Report, is a valuable tool when purchasing real estate because it provides potential home buyers and insurance companies with a detailed analysis of all homeowner’s insurance claims made against that property over the past 7 years.
This report is useful for buyers as it provides a better understanding of the types of claims on real estate.
Getting one will help you better understand the concerns on the property that you want to know before deciding to purchase the property.
You can expect this report to include information such as type of loss, date of loss, and amount paid. It also contains general information about different insurance companies with the details of claims that were made.
These reports are important because they can provide detail on a property that may help the buyers reconsider their decision of buying a specific property.
For example, if you find out that your property insurance has paid out as a result of major roof damage or structural damage, this could be a cause for concern.
Just like borrowers can get this report so do the insurance companies, and these types of issues can make it difficult to get insurance or the buyer may end up paying higher premiums.
How Does A CLUE Report Work?
Whenever a homeowner makes an insurance claim, the insurance company uploads the claim report to the comprehensive loss underwriting exchange database.
Over the years, every customer, property, and vehicle has developed a CLUE profile. Homeowners and insurance companies can access these reports.
These reports can be used by homeowners to show the history of damage to the property to potential buyers.
Ideally, the report will prove that your home has suffered little or no damage in the past 7 years or that your insurance is covered for all the damages.
Insurance companies use comprehensive loss underwriting exchange reports to assess coverage risk on people’s property and determine the appropriate coverage rate. Insurers calculate coverage rates based on the history of claims that were made on the property.
This means that if there are higher numbers of claims in the past seven years, the insurance company would charge higher premiums on your insurance policy.
If the number of claims is higher, the buyers can also anticipate their insurance premiums to be higher. Being said that, if there are few or no claims on the property, the potential buyers can anticipate the insurance premiums to be lower.
How To Procure A CLUE Report?
Comprehensive loss underwriting exchange reports are available every 12 months through LexisNexis.
Only homeowners or insurance companies can order these reports, but reports can be ordered for free by mail, phone, or online.
To obtain this report, you’ll need to prove your identity by providing personal documents and answering questions regarding ownership of a property.
Most realtors would request the seller to obtain this report to understand the claim history and to anticipate if there are any major issues before you decide to put in an offer to buy the property.
What Does CLUE Report Contain?
The below-mentioned information is included in this Report:
- Name of the insurance company
- Date of birth and Name of the Homeowner
- Policy number
- Types of loss, like fire, roof, or other
- Date of loss
- Amount paid to cover the loss
- Information about the property in question
- Property Address
The information on the loss can only be updated by the insurance companies in the database.
The report includes detailed insurance information, which does not include any additional personal information such as credit history or legal activity.
Conclusion
CLUE report can be one of the most important pieces of document that can help a homeowner to be up to date with their property’s condition.
With the help of this report, potential buyers may be in a position to make an informed decision about buying the property and anticipate the insurance premiums.
It is suggested that as a homeowner, you get this report once a year so that if there are any errors on the property’s claim history, you can get that updated by getting in touch with LexisNexis.
