A Comprehensive Loss Underwriting Exchange (CLUE) report contains a history of homeowner's insurance claims for a property. According to bankrate.com, the CLUE report goes back five to seven years. The report captures various details that can help you understand a property, the property's risks, and its insurability, among other things. Here is some of the information you can glean from a CLUE report.
Previous Major Damage
A CLUE will inform you if a property has experienced major damage in the past. For example, flood damage will tell you that the property had suffered water damage. Water damage has lingering problems such as corrosion, mold infestation, electrical damage, and rot, among others. Thus, you should scrutinize such a house closely and determine the extent of any lingering damages it might have.
Multiple claims over the same issue will tell you that the property has recurring problems. Either that or the previous owner of the property didn't solve the initial problem. For example, multiple roof damage claims will tell you that the roof is problematic. Maybe the roof is aging, it is made of defective materials, or its installation was defective. Such recurring issues may create problems, including with your insurance carrier, in the future.
Some home insurance risks are more prevalent in some areas than others are. Theft, flooding, wildfires, and storms all tend to be location-dependent. Therefore, a CLUE report that contains multiple claims for such disasters points to a problematic location. Maybe the home is located in a flood zone or near a forest that wildfires routinely plague.
In such a case, you should prepare for future claims related to such disasters. You should also prepare to purchase disaster-related add-ons to your primary coverage. The add-ons may be necessary since many home insurance companies exclude some disasters.
Home Insurability and Rates
Home insurance companies use CLUE reports to determine whether they can sell coverage for specific properties. The insurance companies evaluate the above factors when evaluating coverage application. For example, an insurance company might deny you coverage if your home's CLUE report shows major damage that no one has probably fixed. Recurrent damages can also trigger expensive insurance premiums.
The information above can help anyone, but it can be particularly useful to you if you are shopping for a house. That way, you don't end up with a home that insurance companies don't want to touch. You can also consult a home insurance agent for more information on insuring a house.
To learn more, contact an insurance agency in your area like Scovotti Insurance.
Purchasing insurance — the right insurance — is one of the smartest things you will ever do. While there are definitely differences between homeowners, car, life, and health insurance policies, they all serve the same purpose when it comes down to it. Insurance protects you against financial ruin should a tragedy happen in your life. In the case of homeowners insurance, that tragedy could be a fire or a flood. In the case of life insurance, that tragedy would be your death. The more you learn about insurance, the better the decisions you'll make when purchasing it. So dive into the articles here, and start reading.