OK, it doesn’t necessarily seem appropriate for Your Realtor to tell you to “Get a Clue”, but it’s only because we are looking out for you, and want to save you money. Honestly, you can save a substantial amount of money and potential headaches, just by using this little trick that most people know nothing about.

When you are buying a home in Naples, we always recommend you have a home inspection performed by a licensed professional to determine if there are any systems, or elements of the home, that are not functioning properly and they way they were designed to function. If you are financing the home, you will be doing your due diligence there as well, but there is an extremely important element that most buyers do not pay attention to, and that is any insurance claims that the current owner may have filed with their homeowner’s insurance company. Not only would this information tell us about any potential issues with the home, but the information may also prevent you from being able to obtain insurance, or it may drastically increase the premiums that you will pay. So, what do you do? This is where you need to get a CLUE!

a CLUE (Comprehensive Loss Underwriting Exchange) Report “CLUE” is a claims-information report generated by LexisNexis®, a consumer-reporting agency. The report generally contains up to seven years of personal-auto and personal-property claims history. Insurance companies report all claims for which they:

Pay out money
Set up a file for a possible claim
Formally deny a claim

*LexisNexis advises insurance companies not to report claims information when you contact them to simply ask a question about coverage or your deductible.

—FAIR OR NOT FAIR?

However, simply talking to an insurance company about specific damage to your auto or home can result in a notation in your CLUE report, which could result in higher rates.
That's true even if you do not file a claim, says Paul Stephens, director of policy and advocacy for the Privacy Rights Clearinghouse, a nonprofit consumer education and advocacy organization in San Diego.
He says the fact that you inquired about loss -- even if you don't file the claim -- is an indication that a loss occurred.
- Paul Stephens, director of policy and advocacy for the Privacy Rights Clearinghouse

How insurance companies use CLUE reports

An insurer may request a CLUE report when you apply for coverage or request a quote. The company uses the history of claims at a specific property, to decide if it'll offer you (the buyer) coverage and how much you'll pay. Insurance company studies show a relationship between past claims and claims you report in the future.

Much like credit reports, CLUE reports are free once per year, but can only be ordered by the owner of the property.

How To Use The CLUE Report When Buying a Home in Naples

VERY IMPORTANT: Here is our trick: We simply make your offer, and any subsequent sales contract(s) contingent upon the owner of the property providing a copy of their CLUE report within x days, and the results being satisfactory to the buyer(s). If there are any errors on the report, we also require the updated or corrected report to be provided to, and approved by, the buyer, prior to closing on the property. Further, we will add an additional contingency that the insurance premium quoted to the buyer is satisfactory to them. They usually waive this contingency when the inspection contingency period ends.

This little trick allows they buyers to see all claims filed by the owner of the home, see past (and possibly potential) problems with the property, and make sure their homeowner’s insurance premiums will be acceptable and manageable before they get too far along in the purchase process. Buyers who do not utilize the CLUE report usually receive their final homeowner’s premium figures shortly before closing. Obviously, if there are derogatory items in the CLUE report, this is pretty late in the game to find this outl

Do Not Expect Your Realtor to Know This!

It is an unfortunate reality that numerous Realtors are unaware of this report, and how to properly utilize it to protect the buyers of the property. [We actually require our Sellers to request and provide a CLUE Report when we list their property for sale]. This allows us to review it with them, help them get any erroneous information removed or corrected, and provide it to potential buyers to gain their trust and eliminate potential issues. 99% of the time the buyer(s) do not request the CLUE report, but this allows us to gain the buyer’s trust, and eliminate any potential roadblocks which may cost all parties a considerable amount of time and money in the process.

As a buyer or seller, you like to think that you can trust your Realtor to protect you from situations like this. But just as some Realtors lack negotiation skills, some real estate agents are either unaware of the contracts, the laws, or lack the experience or knowledge to protect their clients (and other parties) when it can be so easily mitigated.

I can’t tell you the number of times people have read articles I have written about little tips and tricks such as this that are a result of our many years of knowledge and experience, and they tell me they just got burned in a similar situation. It doesn’t need to be that way. You can lean on, and rely on, our tremendous knowledge and experience in the Naples and Southwest Florida real estate market. Our reputations speak volumes.

How Else Can Use The CLUE Report To Your Advantage?

You should look at these reports (remember you should receive one for each of your cars as well) annually and dispute any errors, in the same way you should check their credit report.

Such errors can range from a simple mistake in data entry to fraudulent claims made by someone posing as you.

If you find an error in your CLUE report, LexisNexis has up to 30 days to investigate the matter and will notify you of the results within five days of completing its inquiry.

If the matter isn't resolved to your satisfaction, you have the right to add a statement summarizing the nature of the dispute, which will appear in future CLUE reports.

And if your home has a history of claims related to poor plumbing or electrical systems, you can wipe out any damaging CLUE report information by replacing or upgrading them, and reporting that information to your insurer.

Once the items have been repaired or improved upon, your rates could actually be better.

In my opinion, you should be checking your CLUE Report(s) Whenever you go shopping for a new insurance plan, whenever you are in a car accident and make a claim, and of course every time you are looking to buy or sell a home.

How Far Back do CLUE Report Histories go?

Given the impact on insurance premium rates, one would naturally wonder how far back CLUE report claims and inquiries go. In other words, what is the historical lookback period for CLUE reports? CLUE reports typically contain up to seven years of claim history. According to LexisNexis,