Ever heard of a C.L.U.E. report? No, we’re not talking about the detective board game some baby boomers played as kids.
C.L.U.E. stands for Comprehensive Loss Underwriting Exchange. It’s a database run by LexisNexis property insurance companies share to keep tabs on the number of claims an owner makes on homes. It tracks claims on the property, as well as, what the cumulative claims individuals make on their homes and vehicles. It may signal a property owner’s penchant for filing a claim that some insurers might find dubious.
A C.L.U.E. report provides dates of insurance claims, the insurance company(ies) involved, the type of policy and what caused the loss. It also shows the amount paid out and the total loss involved. Because it also tracks cumulative claims by individuals, it is similar to an individual’s credit score by one of the three major rating agencies.
The C.L.U.E. report on a property goes back 5-7 years so it might not ferret out potential problems older than that. It is standard industry practice to purge older losses on property reports.
Under the federal Fair Credit Reporting Act, only insurance companies can order a C.L.U.E. report. Home sellers should be aware of what their C.L.U.E. report says about their property, especially if there are any errors that should be corrected before your home is listed for sale. Here, it can help protect the seller and his/her agent from claims about failing to disclose a problem.
Home buyers should ask for and review the C.L.U.E. report. It may reveal important information. If the seller balks, that might tell you something about condition of the home. In that case, get your insurance company to request one.
A client of mine recently wanted to submit a contract on a condominium in Reston. We knew the property had a major fire about a year earlier. To protect my client, I suggested we ask, in the contract, the seller for the C.L.U.E. report. The seller obliged. Not only was the cause of the fire (electrical wiring) good intel to have, we learned the entire building was rebuilt. So what we were looking at what was basically a new unit.
C.L.U.E. reports can come in handy if it contains information about any kind of repetitive issues from a water, electrical or exterior problem for example.
The mere existence of C.L.U.E. reports means if you‘re thinking of filing any claim that could be second-guessed or is relatively trivial in nature, the lesson here is: don’t file it. If anything, you might find yourself paying higher insurance premiums if you had paid for a repair and not filed a claim.