C.L.U.E. Report
Buying a house is a time when you don’t want any surprises. But even if you’ve got your eye on an immaculately-maintained home, you don’t know what has happened to that house in the past that might compromise the structure.
Or do you? With a free tool known as a CLUE report, also known as a loss history report, you can find out if there have been any insurance losses at a house in the past 5-7 years. Most home insurance companies contribute claims history information to the Comprehensive Loss Underwriting Exchange—or CLUE—database, which is maintained by research company LexisNexis. Your insurance company uses the information from a free CLUE report to guide it in setting rates for your home.
You can access that information and find out if a property was involved, say, in major vandalism or suffered losses from a storm. That information can guide you in deciding if it’s the right home for you.
What is a CLUE report and how does it work?
A CLUE report will contain any insurance claims made on a property over the past 5-7 years, no matter how small. The report includes the date and type of loss, how much was paid out by the insurance company or if the claim was denied and general information about your policy.
When a homeowner files an insurance claim for incidents such as water damage, criminal activity on the property and fire loss, most insurance company reports go onto the CLUE database.
Insurers may use a CLUE report to gain a fuller picture of the property and home before setting a rate. “They look at the claims history to see if the person applying for insurance hasn’t disclosed a certain condition or indicator of how the property is being maintained, or if there are several instances of the same type of loss,” says Robert Passmore, senior director of personal lines policy for the Property Casualty Insurers Association of America in Chicago.
Major claims, or chronic or repeated claims, could be a red flag for the prospective buyer leading to increased insurance costs, signs of unexpected construction or rebuilding expense. There can also be positive news. If insurance expensed new roofing or windows following a natural disaster, the prospective buyer would know those parts of the house are in good condition for years to come.
What’s in a CLUE report?
Your free CLUE report includes the following:
The name of the insurance company
The date of any losses and their claims
The type of loss—fire, wind damage, etc.
Whether or not the claim was denied
If not denied, the amount that the insurer paid out
The homeowner’s insurance policy number and claim number
The report won’t include specifics, such as what part of the house was damaged—but it will give you enough information to ask the homeowner to explain the 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
You can get a free CLUE report for your home once a year from LexisNexis. Request your CLUE report online or by calling (866) 312-8076.
There’s one catch: Only the owner of a property may access its CLUE report. If you’re a potential homebuyer, you’ll need to ask the owner of any home you’re interested in for a CLUE report. If you’re selling your home, it pays to have a CLUE report available to show potential buyers, especially if it’s clear because you haven’t made any insurance claims in the past.
Even if you’re not in the market to sell, you 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.”
If you find any inaccuracies on your home’s CLUE report, you can contact LexisNexis to resolve the CLUE report dispute at 888-497-0011, by email at consumer.documents@LexisNexis.com, or by postal mail at LexisNexis Consumer Center, ATTN: FACT Act Dispute Request, P.O. Box 105108, Atlanta, GA, 30348.
I have a CLUE. What do I do?
Once you have a CLUE report in hand—either for your home or one you’re interested in purchasing—read it through carefully, knowing that potential insurers do the same. Past claims, especially multiple ones, might indicate a structural weakness in the home or alert you (and insurers) to the potential for future claims.
“If there’s a hazard on the property and someone fell into a hole, a claim would ensue,” says Karl Newman, president of the NW Insurance Council in Seattle. Insurers will want to know if that hole has been filled. Or if the property has experienced multiple burglaries, an alarm system might keep your premium rates lower, 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 or indicate the need for supplemental flood insurance.
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.”
How do CLUE reports affect your insurance
As noted above, a CLUE report may have a positive or negative impact on your insurance premium. Because most insurance companies report to LexisNexis, you can be fairly certain that the report is comprehensive and a good indicator of the health of your home.
Insurers know that past home disasters may indicate trouble in the future. Their studies and data may indicate, for example, that once you have made a claim for damage from a hurricane or wind storm, there is a better-than-average chance you’ll have to do so again. To make up for that likelihood, they’ll need to increase your premium payments.
Even a small claim of a few hundred dollars can be a red flag for insurers. Each insurer will have its own methodology for determining rates, so it’s possible that if one company turns you down for insurance based on your CLUE report, another will underwrite you—but with a high premium.
But there’s good news, too: a claim-free CLUE report can potentially allow you to ask more for your home if you’re selling and can relieve your mind (and that of your insurer) if you’re buying. It suggests that your home is in good condition, with no fundamental weaknesses that can cause problems.
A CLUE report is not an inspection
With a CLUE report home disasters or mishaps in the past come to light, but that’s not the only way you can assess the damage. 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.
It’s worth noting that a CLUE report does not take the place of a home inspection, and it lacks the details that allow you to pinpoint exactly where problems might arise. A home inspection is considerably more thorough and provides additional information beyond what a CLUE report does.
A CLUE report 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.