Browse
Log in / Register
Share
A property's past insurance claims history, detailed in a CLUE report, can significantly impact your future home insurance premiums, even if the claims were filed by a previous owner. Understanding and reviewing this report is a critical step in the home-buying process to avoid unexpected costs. The Comprehensive Loss Underwriting Exchange (CLUE) report is a database maintained by LexisNexis that stores up to seven years of property and auto insurance claims history, which insurers use to assess risk and set your rates.
What is a CLUE Report and Why Does It Matter? The CLUE report is a history of insurance claims associated with a specific property. Unlike an auto claims history that follows the driver, a home's claims history stays with the property itself. When you apply for home insurance, companies check this report to gauge the likelihood of future claims. A history of multiple claims, such as those for water damage, fire, or roof damage, can signal higher risk, leading to increased premiums or even difficulty securing coverage. Based on our experience assessment, a single major claim, like a kitchen fire, can influence your insurance costs for years.
How Can a Previous Owner's Claims Affect You? You are financially responsible for a property's past, even for events that occurred before you owned it. If the previous homeowner filed a claim for hail damage that damaged the roof, insurers may see the roof as a future liability. Your rates could be higher as a result, even if the roof was partially repaired. More critically, a pattern of claims, or even inquiries about potential claims, can label a property as high-risk. This is true even if the prior owner merely asked their insurer about coverage for a problem but never filed a formal claim. It is essential to know this history before finalizing a purchase.
| Potential Claim Type | Likely Impact on Insurance Premiums | Recommended Action |
|---|---|---|
| Water Damage | High (indicates potential for mold, structural issues) | Request details on repairs and scope of damage. |
| Fire Damage | High (especially if electrical) | Confirm all repairs were permitted and inspected. |
| Hail/Wind (Roof) | Moderate to High | Obtain a professional roof inspection. |
| Minor Theft/Liability | Low to Moderate | Ensure the issue has been resolved (e.g., security system installed). |
What Practical Steps Should a Homebuyer Take? The most effective step is to request the seller provide a copy of the property's CLUE report during the inspection contingency period. As part of your due diligence, formally request the seller to provide the CLUE report. Only the current homeowner can request this report for their property. Reviewing it allows you to see the claim history and ask the seller specific questions about the nature of any incidents and the quality of the repairs made. If repairs were made, ensure your insurance company is aware, as this can sometimes mitigate the negative impact of a past claim.
How Do You Access and Dispute a CLUE Report? By federal law, you are entitled to one free copy of your CLUE report annually from LexisNexis. The request process requires verifying your identity with personal information, such as your Social Security number, so it should be done over a secure connection. It is crucial to review the report for accuracy. If you find errors, you can dispute them directly with LexisNexis, which is required to reinvestigate within 30 days. If the dispute is not resolved to your satisfaction, you can add a statement of explanation to your file.
In conclusion, being proactive about the CLUE report is essential for managing homeownership costs. Always review the CLUE report before purchasing a home to uncover any hidden insurance risks. If the report reveals past claims, investigate the repairs thoroughly and discuss the findings with your insurance agent to understand the potential premium implications. This due diligence empowers you to make an informed decision and avoid costly surprises after closing.
