When you’re about to close on a new home, there are a lot of important details to get in order. One key insight you shouldn’t miss is the CLUE report. It’s invaluable when it comes to avoiding 11th-hour surprises.
What is a CLUE report?
CLUE stands for Comprehensive Loss Underwriting Exchange, and a report is generated by LexisNexis®. You could be familiar with the organization as it relates to law books, but they also operate as a trusted consumer-reporting agency.
CLUE is a consumer-reporting database, containing up to seven years of a person’s insurance claims history; it’s tied to a property and its owners (past and present) or an automobile. The CLUE report tells a bank or insurance agent about the history of a particular property’s claims reported by insurance companies, including:
- Owners’ names
- Policy number
- Date of loss
- Type of loss
- Amount the company paid
- Description of the covered property
- Property address for homeowner claims or specific vehicle information for auto claims
Why CLUE reports matter to banks, insurers and buyers
With a report, banks and homeowners can make informed decisions about which properties are a good bet for a mortgage loan. For example, a home that damaged in a flood, but never properly remediated, could be a risk for both the people living inside with mold or the insurance company who risks future flooding claims.
For banks and insurers, they also gain a bit of history on the new owners’ claims history at previous properties. Perhaps they weren’t the best at replacing water heaters or roofs until it was too late. Or maybe they had a lot of claims involving the family dog, dangerous items on their property or even civil claims. The CLUE report offers deep insights into all sorts of claims.
Do I need a CLUE report?
If you’re getting ready to purchase a new property and not reading a CLUE report, you’re really only getting a basic level of information. With additional insights on claims from the report, you can make informed decisions that make the most financial sense for all parties involved. And don’t wait until you’re days from closing to get the report. The details it provides can be an invaluable resource to help everyone succeed in the real estate game.
Another reason to get a CLUE? Just like your personal credit report, you should request one regularly to check for errors or fraud. You can correct mistakes before they impact your next new home purchase or sale.
How to run a CLUE report
When putting together a quote for a new property for clients, PayneWest agents can help prospective homebuyers gain insights on a property and potential insurance issues by reviewing a CLUE report.