Have you ever walked through a prospective house or commercial property (especially in the basement or the base-level of a property built on a slab foundation) and gotten the feeling of being in a hospital? What I mean is that you look around and everything seems to be painted over - usually in a shade of white – with a smell akin to a dirty sponge covered with latex paint that was washed in some bleach/chlorine concoction. If you find yourself having this feeling you may need to put on your Sherlock Homes hat and get a C.L.U.E.
A C.L.U.E. report stands for Comprehensive Loss Underwriting Exchange and is simply a database that enables insurance companies to access consumer claims information when they are underwriting or rating an insurance policy.
C.L.U.E. was created in 1992 and is administered by Choice Point, a data aggregation company. About 90% of insurance companies contribute claims data to the database. A C.L.U.E. report contains information provided by insurance companies about such things as the policy information, the date of any losses, type of loss, the amounts paid, description of the property covered…etc. An important thing to remember is that the report only covers loss history claim information for the prior 5 years.
So, what’s the big deal? Well, as an example, some years ago I was doing an informal walk-through of a house my nephew was looking to buy and I found a bunch of old drywall and furring strips (the small pieces of wood that are attached to a concrete wall as an attachment point for the drywall) in the detached garage. Once we got to the basement, we saw the painted-over walls and floor. We came to find out through the real estate agent that the basement had previously flooded but, not to worry because the damage had all been repaired.
When we asked for the homeowner to request the C.L.U.E. report (important point : only the current homeowner can request a copy of the report, so you must ask them to do it) and read the report we found that the home’s drainage system had backed-up during a heavy rainstorm event. Armed with this information we asked our insurance agent if this would impact on my nephew’s rates and were told that it would probably mean a higher premium payment or possibly denial of insurance. The good news was that by getting a backflow preventer installed (splitting the cost between them and the friendly sellers) the problem could be averted in the future, and everyone was happy as the sale went through.
The big “take-away” is that when we see anything while doing your inspection that looks like it may impact your ability to get good property insurance coverage, we will always call it out and strongly suggest you “GET A CLUE”!
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