What You Need to Know About a CLUE Report
When you are buying or selling a home, there are many documents, disclosures, and inspections to keep track of. One important piece that often gets overlooked is the CLUE report. CLUE stands for Comprehensive Loss Underwriting Exchange, and it is essentially a history of insurance claims tied to a property or to an individual. This report can have a real impact on what you pay for insurance and even whether a home sale goes smoothly.
What is a CLUE Report
A CLUE report is a record of insurance claims over the last 7 years, maintained by LexisNexis. It applies to both property and auto insurance, but for real estate purposes, we are focused on the property side. The report will show claims filed on the home itself regardless of who owned it at the time. That means if a previous owner filed a claim for water damage, a fire, or storm damage, it will appear in the report.
Insurance companies rely on CLUE reports when deciding whether to issue a policy and how to price it. If a property has a long history of insurance claims, particularly for similar issues like repeated water damage, you can expect the insurance company to treat it as higher risk.
Why a CLUE Report Matters for Buyers
For buyers, reviewing a CLUE report is like seeing a health record of the property. The seller might disclose visible issues, but the report reveals what kinds of damage the home has suffered and whether there have been insurance claims. Imagine buying a home only to learn later that it had three prior claims for basement flooding. Even if the basement looks dry when you tour it, that history could point to recurring problems.
In addition, insurance companies can deny coverage or charge higher premiums based on past claims. If you know about these issues before closing, you can plan ahead and decide if the property is right for you.
Why a CLUE Report Matters for Sellers
For sellers, a CLUE report can help you get ahead of questions that might come up during a buyer’s due diligence. A buyer’s insurance company may pull the report even if you do not provide it. By checking it yourself before listing your property, you can correct any errors and be prepared to explain any past claims.
A clean report makes the home more attractive, while a report showing multiple claims could raise concerns. Being transparent and proactive with this information can help avoid delays or surprises during the sale process.
How to Get a CLUE Report
As a homeowner, you can request a free copy of your CLUE report once per year through LexisNexis. You can do this online or by mail. Buyers cannot request a report directly unless they already own the property, but they can ask the seller to provide one. Many agents will recommend making the CLUE report part of the standard disclosure package.
What to Look For
When you receive a CLUE report, pay close attention to:
- The number of claims filed and their type
- Whether the claims were paid, denied, or withdrawn
- Patterns of repeated claims for similar damage
- The dates of the claims relative to the age of the property
A single claim for storm damage might not raise concerns, but repeated water damage or fire claims could suggest a problem that has not been fully resolved.
The Bottom Line
The CLUE report is a valuable tool that helps both buyers and sellers make more informed decisions. Buyers get a clearer picture of the property’s history and its potential insurance costs. Sellers can avoid surprises by reviewing the report in advance and being upfront with buyers.
Insurance companies use CLUE reports to protect their interests, but homeowners can use them as a way to protect their own financial decisions.
My Advice
If you are buying or selling a home, I strongly recommend asking about the CLUE report early in the process. It can save you from unexpected costs and from buying into hidden problems.
If you have questions about CLUE reports or want help navigating the buying or selling process, reach out to me. I am happy to connect you with a trusted real estate professional in your area who can guide you through every step with confidence.
