Most home insurance companies contribute claims history on a property to a database called the Comprehensive Loss Underwriting Exchange, or CLUE.
What’s in a CLUE report?
A home’s CLUE loss history report provides insurance company names and policy numbers and any claim numbers. The report lists the dates of any claims, the loss types and amounts paid for losses, and it will tell if a claim was denied.
Weather-related losses, fires, theft, vandalism and water damage are some of the types of claims listed, says Passmore. But the report doesn’t indicate what part of the property or home was affected. You’d need to ask the homeowner for those details.
A report might be blank, for two reasons:
- The homeowner did not make any claims in the past seven years.
- The home was covered by an insurance company that doesn’t participate in CLUE.
“Claims for the property under a different owner also won’t be included either, and therefore not considered when rated for insurance,” says Jeffrey Ill, a vice president for homeowners insurance at Esurance in San Francisco.
How to get a CLUE report.
A free CLUE report can be obtained once a year from database giant LexisNexis. Requests can be made online or by calling (866) 312-8076.
Here’s the catch for a homebuyer: Only the owner of a property may access its CLUE report.
“You must request the report from the owner of the home you’re considering buying,” says Karl Newman, president of the NW Insurance Council in Seattle.
Newman says a savvy seller should obtain a CLUE report before showing the home, make several copies and have those available for potential buyers.
Even a homeowner who’s not in the market to sell may want to get a CLUE report — to check for any inaccuracies.
“Since the CLUE report is one of many pieces of information that an insurer might look at, what is in the report can influence your premiums positively or negatively,” says Passmore. “So if there are any inaccuracies, it’s important to get them corrected, just as it would be for your credit report.”
I have a CLUE. What do I do?
A consumer armed with a CLUE report should examine it for any claims that could lead to skyrocketing home insurance premiums. These include fire, burglaries and physical damage to the structure.
“If there’s a hazard on the property and someone fell into a hole, a claim would ensue,” Newman says. When the property has experienced multiple burglaries, that can mean that it needs an alarm system, he notes.
Claims might also indicate issues with the physical location of the property that can affect premiums, says Passmore. If it’s close to the water or known to flood frequently, insurance can cost more.
A recent claim can have positive ramifications if the damage was addressed properly, says Michael Barry, a spokesman for the trade group the Insurance Information Institute in New York.
“For example,” he says, “if a roof was damaged by a windstorm and replaced by a new one, this would actually make the house more desirable to an insurance company.”
A CLUE report is not an inspection
Potential buyers should use the CLUE report to let their home inspector know of any repairs that have been made, says Newman, so that the inspector can make sure the work was done correctly.
A CLUE is not a secret database, and it gives no score or recommendations, Newman points out. It just tells what happened in and outside the home. It doesn’t take the place of an inspection or disclosures from the seller.
“It’s an additional tool to evaluate the home and the cost of homeowners insurance,” he says.