Checking The Pulse Of The Kansas City Real Estate Market

Homeowner’s insurance is often one of the last things a buyer considers when purchasing a home. This is even more true for home buyers who have already had insurance in place on a previous home. But taking  for granted that you’ll have no problem with getting homeowner’s insurance in place – and maintaining it after closing – could be a huge mistake. So consider the following measures to help ensure you’ll have insurance in effect on your home for year’s to come.

A very basic step is to have the insurance company go to the home and inspect the property for insurability BEFORE closing on the home. It’s not unheard of for an insurance company to put a policy into effect, let a home close and then come out later to inspect the property. If it’s determined at that time that the roof is not insurable, the insurance company could cancel the policy on you. That would be terrible. There are also many other insurance issues that could also be detected up front by simply asking the home seller to provide you with a CLUE Report. What’s A CLUE Report? CLUE stands for Comprehensive Loss Underwriting Exchange and this report is designed to organize the insurance history on a given property. This is not a report on an individual’s history of claims, rather it’s on the specific home in question.

Whatever history shows up on a CLUE Report can stay on the report for up to 5 years. The report is likely to include the dates of any prior claims on the home, the insurance company who paid out on the claim, the amount paid on the claim and the general cause of the loss. But to get this report, you’ll have to ask the seller to get a copy of the CLUE Report for you — because only the property owner can request and receive a copy of the CLUE Report. If a seller refused to provide a copy, run the other way. Do keep in mind that a seller can only get a free copy of the report once a year, so if they pulled one 11 months ago you may have to make do with that report – or reimbursing the seller $20 for a current CLUE Report would be a good option.

Items that may show up on a CLUE Report could include basement flooding issues, siding claims and plumbing claims. Similar to how those involved in a car wreck are more likely to have another wreck (than someone never involved in wreck), home’s that have claims on them are more likely to have another claim in the future (than a home that’s never had a claim).  So if the home you’re buying has claims on it in the last five years, odds are you’re going to be paying higher insurance premiums on the home — if the insurance company agrees to insure it at all.

Some items that show up on a CLUE Report can be disputed. Just like checking your FICO score on occasion to be sure the info being reported is accurate, you can check the CLUE Report to ensure the information on a particual property is being portrayed accurately. You may even see simple notes from when you (or a previous owner) called in simply to DISCUSS the possibility of making a claim – even if a claim was never made. And you can bet that any notes present are having an affect on a property’s insurance rates.

Posted by Jason A. Brown