Get a CLUE: Before you buy, understand a home’s claims history
The home-buying season is here and many people are viewing potential new homes. However, Homeowners Insurers encourage buyers to take a cautious approach when evaluating houses. Without knowing a home’s claims history, buyers could get stuck living in a money pit instead of a dream home.
If you're in the market for a new home, NW Insurance Council encourages you to obtain a Loss History Report from the seller before making an offer. Loss History Reports give potential buyers the ability to review up to five years of a home's claims history and verify that any prior damage was repaired correctly.
If you’re considering buying a new home, NW Insurance Council offers the following facts and tips to help you examine a home’s claims history:
If you're in the market for a new home, NW Insurance Council encourages you to obtain a Loss History Report from the seller before making an offer. Loss History Reports give potential buyers the ability to review up to five years of a home's claims history and verify that any prior damage was repaired correctly.
“New tools have become available in recent years that help a prospective homebuyer evaluate the condition of a home and the likelihood of burglary or vandalism in the neighborhood,” said Karl Newman, NW Insurance Council president.
Homeowners who are unaware of these tools can be left with structural problems, substantially higher insurance rates or have difficulty finding coverage because of past claims filed by previous owners.Checking a home’s claims history is similar to examining a car’s Vehicle History Report from CarFax, AutoCheck or ConsumerGuide, and allows you to make a well-informed purchasing decision.
How can you find out the history of a home before you buy? Ask the seller to provide you with the Loss History Report. If the current homeowner filed a claim in the past five years, including claims for water-damage, fire or theft, the Loss History Report will show it. If you’re considering buying a new home, NW Insurance Council offers the following facts and tips to help you examine a home’s claims history:
· Loss History Reports are a powerful tool for both buyers and sellers. Buyers can request a Loss History Report from the seller as part of the real estate transaction. The reports can identify potential problems for the buyer’s inspector to investigate.
· A Loss History Report is simply a record of past claims.
· 70 to 80 percent of homes have clean Loss History Reports.
· There are two types of Loss History Reports available to homeowners:
CLUE– Comprehensive Loss Underwriting Exchange, developed by ChoicePoint, Inc., Atlanta, Ga. (now owned by LexisNexis). This report is a five-year history of claims filed by all past and current owners of the property.
CLUE– Comprehensive Loss Underwriting Exchange, developed by ChoicePoint, Inc., Atlanta, Ga. (now owned by LexisNexis). This report is a five-year history of claims filed by all past and current owners of the property.
A-PLUS– Automobile-Property Loss Underwriting System, developed by Insurance Services Office (ISO). The A-PLUS report is a history of the current owner’s claims up to five years. If the seller has owned the home for less than five years, the report will not include claims filed by past owners.
· Homeowners, insurance companies and insurance agents have access to Loss History Reports.
· A homebuyer cannot access a Loss History Report until a real estate contract is signed, due to the “permissible access” rules of the Federal Fair Credit Reporting Act (FCRA). The seller can obtain loss History Reports for less than $20.
· CLUE Reports are available online or by mail at (800) 869-0751 for $19.50.
· A-PLUS reports are available at (800) 709-8842. The first report is provided at no cost.
· Consumers adversely affected by their Loss History Reports can get free copies of their reports from CLUE or A-PLUS.
For more information on Homeowners Insurance and Loss History Reports, visit NW Insurance Council or call (800) 664-4942.
NW Insurance Council is a nonprofit, public-education organization funded by member insurance companies serving Washington, Oregon & Idaho.
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