Denver & CLUE reports?
An insurance policy is required by most lenders when you buy a home in Denver or other places. The premium for that first year needs to be paid and an escrow is set up to pay next years policy. If that policy premium is too high you may not qualify for the mortgage on that home. And it is all related to the previous owner’s claim history. Read on…
If you haven’t heard of a CLUE report, it has nothing to do with the table game searching for a murderer. It is a report showing the insurance claims on your home and car for the past five to seven years.
This database is used by insurance companies to evaluate risks and determine rates. C.L.U.E. stands for Comprehensive Loss Underwriting Exchange. Rates can be increased not only due to legitimate claims but data entry errors also. Sometimes, simply asking a question without filing a claim can be logged as a claim.
For that reason, similar to verifying the accuracy of your credit report, it is important to check out the CLUE report on your home and car. The reports are free and there is a process for correcting mistakes.
An interesting and sometimes costly surprise occurs during the home buying process. The claim experience of the prior seller could impact the price of the premium of the new buyer. For that reason, you can ask for a copy of the CLUE report on the home you’re interested in buying prior to writing a contract.
Here is an interesting example: My neighborhood has been hammered by hails storms twice in the last 3 years hence 2 claims. A neighbor had the water line between the house and the street start leaking and raised the ground water in his and another neighbors crawl spaces. Well the neighbor filed an insurance claim, that makes 3, and now his insurance company has cancelled his policy due to the number of claims, and his clue report means he will pay excessive premiums for a few years until the claims fade away. And none of this has to do with any culpability on his part, only acts of God and a contractor who “kinked” a copper pipe 28 years ago. So when getting ready to sell your Denver home, it might be good to check that CLUE report if you have had multiple claims on your insurance.
If you need help getting a CLUE drop me a note here.