Do I Need a C.L.U.E. Report?
Last week, one of my clients asked me if he should order a C.L.U.E. report on a home he’s thinking of buying. It’s an interesting question that’s starting to pop up more frequently so I thought we’d dive into it today.
I have to hand it to them; it’s a pretty catchy name. C.L.U.E. stands for Comprehensive Loss Underwriting Exchange and it is a database (generated by LexisNexis®) of consumer auto and home insurance claims. Insurers use it to extract claims information (auto and homeowner) when making an insurance underwriting decision. They may base their approval decision and even the price of your premiums, at least partially, on what’s in the report.
What type of information is included in the database?
The information in the C.L.U.E. database includes most of what is listed on the insurance policies issued to the person or the address, such as name, date of birth and claims information. The latter includes the date of the claim, the type of claim and how much was paid to satisfy it. For instance, it may list a claim for damages caused during a storm when a tree fell on the home, damaging the roof. The claim will be listed, by the way, whether or not the homeowner was paid for it and claims remain in the database for seven years.
Do all insurance companies contribute to C.L.U.E.?
I think of C.L.U.E. as being a lot like the big national real estate aggregator websites. Not all of the country’s MLS databases supply information to sites such as Zillow and Trulia, so when you visit them you aren’t getting all of the area’s listings and sales information. The same holds true for C.L.U.E. Not all insurance companies subscribe and contribute to the C.L.U.E. database. Therefore, a C.L.U.E. Report may not contain the entire history of claims.
Should I ask for a C.L.U.E. report?
As long as you understand that the report may not include all claims against the homeowner’s insurance policy I don’t see why you shouldn’t request one. What information (if any) it does contain could prove quite valuable.
For instance, the report may give you clues about ongoing problems with the home, according to Michelle Lerner with Money Crashers, “particularly claims that involve water damage,” she said. “For example, if a home has had even one claim involving water, investigate the existence of mold or perhaps explore the need for flood insurance.” Lerner goes on to list other red flags to look for in the C.L.U.E. report and these include “multiple claims of any sort, such as more than one fire or more than one burglary.” These types of claims may indicate a careless homeowner, a crime-ridden neighborhood or a dated or unsafe electrical system.
Also take note of the claim amount as this is an indication of the severity of the problem. The more damage caused, the more it will cost to remedy.
Should I skip buying a house with a lengthy claim history?
Whether to continue with the purchase of a home with a long history of insurance claims depends on the type and the outcome of the claims. For instance, "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." Michael Barry of the Insurance Information Institute in New York tells Bankrate.com’s Heather Larson.
How do I get a C.L.U.E. report?
Only the homeowner, lenders and insurance companies can access the C.L.U.E. database so you’ll need to request the report from the homeowner. Like your credit reports, by law (Fair Credit Reporting Act) the homeowner is entitled to one free copy of the C.L.U.E. report per year.
If you currently own a home and would like to order your own C.L.U.E. report you can do so by calling LexisNexis® at 866-312-8076 or by visiting personalreports.lexisnexis.com. When you receive the report, look over it for errors and if you find any, contact LexisNexis right away to file a report.