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Don't Let Homes Owners Insurance Stand in the Way of Settlement - Get a CLUE The insurance industry has recently made some startling changes:
This trend in limitations is a real estate industry nightmare and it is only getting worse. Some insurers may be looking for any available means to avoid loses. Recently, REALTORS® have reported that some insurers are refusing homeowners' coverage to buyers on some homes that have prior claims. How can this be? Insurers have access to a ten-year-old database called the Comprehensive Loss Underwriting Exchange Property Database (CLUE). This database tracks claims on properties and property owners. CLUE is a voluntary repository supplied by the nation's carriers of homeowner's insurance policies. It can tell an inquiring insurer (or consumer) the name and address of the policyholder, and whether there has been a claim for water, earthquake, tornado, fire, or other losses as well as the claim amount paid. If the insurer determines the house is a high risk for another catastrophe, a homeowner's policy can be refused to the buyer. Without insurance, the buyer can't get a loan, and the property cannot complete the settlement process. How to Avoid Settlement Sabotage SELLERS - Ask yourself this question, "Have I made a claim to my insurance company in the last five years?" If the answer is yes, sellers are encouraged to contact CLUE to determine if they are in fact in the database. Sellers are also encouraged to disclose this claim to the buyer. BUYERS - To avoid a worse case scenario, buyers are encouraged to obtain homeowner's insurance coverage as soon as they become the contracted purchaser of the property. This will allow ample time to ensure the house is "insurable" and to deal with any issues before it goes to settlement. CLUE property reports can be obtained online at www.choicetrust.com. |