What is a CLUE report in real estate?

A Comprehensive Loss Underwriting Exchange (CLUE) report offers a detailed overview of any homeowners insurance claims that have been made and filed on a home. This document, sometimes also called a loss history report, can be a useful tool if you’re thinking about buying a certain property.  

A CLUE report for real estate purposes may show any red flags that could affect your homeowners insurance rates. Some data from a CLUE report may mean that insurers may limit or refuse to provide coverage at all.

Getting this report means you’ll be able to get an insight into the home’s history of insurance coverage and any issues you may face before you move in.

What is a CLUE report?

A CLUE report is a real estate tool that gives a home buyer a detailed overview of homeowners insurance claims within the last 7 years. It’s useful for buyers because it can help give you insights into any claims made on the property and any concerns you may have before moving forward with the purchase.

Some of the details you’ll be able to see in a CLUE report include the type of loss, the date of the loss, insurance provider details, and any amounts paid out for claims made. This information can help surface any questions or concerns before you purchase a home.

How do CLUE reports affect homeowners insurance?

A CLUE report can influence premiums and eligibility for homeowners insurance. Information from the report is used by insurance providers to assess the risk that may come with insurance of a property, based on its claims history.

Say a CLUE report shows an insurance claim and subsequent insurance payout because of water damage, foundation issues, or a damaged roof. This could be concerning to insurers. These problems could mean that it’ll cost more to maintain the home. Or, that there’s an increased risk of other problems happening in the future, increasing the potential for additional claims.

If a property has severe or frequent claims, it could mean that the home is an even higher risk for insurance companies. It could also mean that you’ll face more maintenance costs or higher premiums. A clean report or one with minimal issues could mean that you’ll get more competitive policy terms and premiums.

Looking at a CLUE report is important in the homebuying process because it offers you the opportunity to pause and reconsider whether you want to purchase the home in question.

What insurance information is included in a CLUE report?

You’ll find detailed information about personal property files claimed, efforts to recover losses, and other general information about home insurance providers.

These details often include the:

• Insurance policy number
• Claim number
• Date of loss
• Type of loss
• Amount paid on the claim

How to get a CLUE report

You can get a CLUE report through LexisNexis, a consumer reporting agency, once every 12 months. Only insurance providers and property owners can request one, and you can do so online using their request form.  It’s also possible to request one via phone or by mail.

To get a CLUE report, you’ll need to provide personal information like your full name and address. You may also need to answer questions that prove you’re the property owner.

Most real estate professionals recommend getting access to a CLUE report, given how useful the information is for buyers and sellers. You can request that the home seller provide you with a CLUE report. That way, you can use the information to help you decide whether to make an offer or be prepared going into the home inspection process.

How much does a CLUE report cost?

You can get one free CLUE report per year from LexisNexis under the Fair and Accurate Credit Transactions Act )FACT). Otherwise, getting additional reports within a year could mean a charge of $19.95, the fee as of the time this article was written.

What to use a CLUE report for

Home buyers and sellers can get valuable insights from a CLUE report and learn about a property’s insurance claims history. Being able to see any prior claims could help you gain more insights, like extensive repairs that may be needed or any aging concerns that are beyond what a home inspection may show.

For example, a CLUE report could show previous fire or flood damage, which could point to recurring issues that may be related to natural disasters in the area.

Aside from giving primary home buyers more peace of mind, a CLUE report could help real estate investors determine if a home is a good investment property. A clean claims history, for example, could imply that the property is in good condition and won’t need a lot of repairs or expensive ongoing maintenance.

As a buyer

Buyers can look at a CLUE report to see what any property claims are worth when deciding whether to make an offer on a house. Insurance agents or providers may also want to see the report to see more details about the property’s history.

As a seller

If a property has a clean or relatively clean claims history, this could help create buyer confidence. A CLUE report can position you as a reliable and trustworthy seller.

Caveats of a CLUE report

Just because a CLUE report doesn’t reveal any prior homeowners insurance claims doesn’t mean the home is without its problems. A blank report simply means that there haven't been any claims in the past 7 years. It may also mean that the homeowner of the property made repairs on their own without going through their insurance company.

It’s important to understand that CLUE reports only show claims history and payouts, not necessarily the quality of repairs done to the home. The same goes for any issues that happened that weren’t covered by a homeowners insurance plan.

For example, general wear and tear is generally not included in homeowners insurance policies. If there are old pipes or worn appliances, those won’t show up on a CLUE report.

Since a CLUE report can be limited to what it shows about a home, it’s not a substitute for a home inspection or more research into a home’s condition.

The bottom line: A CLUE report can provide useful information for your next investment

A CLUE report is a useful tool that can help you as a buyer understand any home insurance claims made on a home within the last 7 years. These insights are one way you can help make an informed decision as to whether you want to purchase a particular home.

If you’re ready to purchase a home, you can start a mortgage application with Rocket Mortgage^® today.