Better Get a C.L.U.E.!

Attention Sellers:
In an effort to coordinate customer risk with insurance cost, more than 90% of insurance providers now use C.L.U.E. reports. These reports take into consideration both the property and the owner and are drawn form a central database generated by a national insurance databank called Comprehensive Loss Underwriting Exchange (C.L.U.E.). The concept here seems harmless enough: give the insurance industry a national database to reference both customers and properties that have claims filed. This allows them to weed out the 33% of customers that make claims (you know, the types that report to five different carriers in five years with claims to all five). These reports however, follow both client and property for a 5 year period. CLUE has now evolved into a consumer benefit for home buyers, a marketing tool for home sellers, and a nightmare for people that may have only inquired about possible repairs.

Recently, I represented a Seller that had water damage to a downstairs shower and had completely remodeled the bath….3 years ago! About 1 week prior to closing the sale, the new buyer suddenly found difficulty in getting the property insured because of a prior claim against it. I have also witnessed home sellers that simply made a call to their insurance provider to inquire about a possible repair. If you simply inquire about coverage to your insurance company, it may be listed as a "claim"! CLUE reports don't seem to have categories for general inquires so some agents report the inquiry as a claim with no payout. This however, may come to haunt that honest and dutiful home seller when he goes to sell his home. He takes care of any issues out of his pocket, only to find that home buyers are inquiring about a "claim" that never existed! Let's put it this way: a bad CLUE report received early in the transaction can become a negotiating point, whereas a bad CLUE report received days prior to close could cause the transaction to fold. Adverse information about a house is suppose to be revealed by Sellers on our Sellers Real Property Disclosure forms. But even candid sellers can be embarrassed by a CLUE report if it involves a claim prior to their ownership or a verbal inquiry.

You can obtain a CLUE report on yourself by calling 1-800-709-8842 or visit the following website at: http://www.choicetrust.com/ Look on the left column of the home page under personal records for C.L.U.E. reports. Cost is $20.