CLUE – an acronym for Comprehensive Loss Underwriting Exchange – is a national database recording property claims for insurance companies. All of your property claims to your insurance company are listed and kept for 5 years. The report shows the date, amount of loss and the type of loss – including claims for mold, water damage & fire damage. It’s been compared to a credit report on your home. If an insurer decides that the report indicates a home is too risky he can refuse to insure that home – and without homeowner’s insurance, your buyer cannot obtain a mortgage.
There are some steps you can take to avoid a contract falling through just before a closing.
- Sellers should order a CLUE Report before listing the property. That way you are prepared to deal with the issue and have an opportunity to correct any mistakes on the report. You can order a report through Choice Trust.
- Even if your home shows up on a CLUE Report, your buyer probably can purchase a homeowner’s insurance policy – but may have to have to do so through an independent insurance agent who has access to numerous policies and the cost may be higher. As a seller it is better to request a report ahead of time, consider what options are available to mitigate it – and not take a chance only to lose the sale of your home by “hoping” for the best outcome.