C.L.U.E. Report

First off, C.L.U.E. stands for Comprehensive Loss Underwriting Exchange. What is a C.L.U.E. Report? A C.L.U.E. Report is a disclosure report of insurance claims, damages, and settlements made pertaining to a specific property during the last five years. Due to regulations in the Fair Credit Reporting Act only the owner of a property can order a C.L.U.E. Report.

For owners looking to sell property, a C.L.U.E. Report can be a valuable tool. Imagine yourself as the buyer. You are viewing multiple properties and have narrowed your choices down too just a few. Don´t you think that some bearing on your decision could be related to having the knowledge that one home was proud to disclose that there have been no insurance claims against the home? By have this report available, a seller may also plant the seed in a buyer´s mind that would create the question; Why don´t all of the homes provide this disclosure?

As a buyer, don´t you think that having information about previous claims against a specific property could influence your decision to purchase the property or your offer price? It has become fairly common practice, as the availability of a C.L.U.E. Report has received more notoriety, for a buyer to request a copy of this report either prior to making an offer or stipulating that one must be received shortly after a contact is accepted. Should a seller elect not to provide the report the stipulation could also include a termination of the contract.

Another item to consider is the insurability of a home. All mortgage providers require that the borrower maintain insurance on the home for the term of the loan. If your insurance company will not insure the home due to previous damage disclosed on the C.L.U.E Report it will be impossible for you to close the loan. An even worse situation would be close on the home and the insurance company terminates your policy shortly after. This would create a serious situation due to your requirement to maintain insurance for the life of the loan.

One last caution for buyers concerning the C.L.U.E. Report would be in the area of termite damage. Many homes have repair and retreat termite bonds. The repair portion of the bond is covered by an insurance policy which in many cases is actually self insurance by the issuing termite and pest control company. In this case, because the provider is not an actual insurance company, any loss or damage to a home would not be found on the report. Make sure to obtain an official termite report and check it for reference to previous activity or infestation. Should any reference be made, make certain that the seller discloses any previous damage as well as extent and remedies taken.