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C.L.U.E.
- There is a serious dilemma facing homeowners and homebuyers everywhere. So
serious that it’s creating barriers to homeownership across the nation.
The problem is soaring homeowners insurance premiums and the inability to
attain coverage.
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- There are three main reasons that homebuyers are finding it difficult to
attain homeowners insurance:
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Prior claims history on the home they are purchasing
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Prior claims history on the home they previously owned
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Credit problems
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- The problem stems from an insurance database known as CLUE (Comprehensive
Loss Underwriting Exchange). CLUE compiles personal information on
policyholders, as well as information on approximately 90% of all U.S.
insurance claims and claim inquiries filed in the last decade. Over 80,000
insurance agencies across the country access this database to decide whom to
insure. And whom to deny.
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- Coverage is being denied to individuals for prior phone call inquiries
made to their insurance agent—even if it did not result in a claim. Calls
made were tracked by CLUE, which is subsequently jeopardizing their
eligibility. Even more disconcerting are those cases where homebuyers who
have qualified for a mortgage based on their FICO credit score are being
turned down for insurance coverage based on the same score.
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- Insurance companies attribute these operational changes to an increasing
number of payouts and jury awards, due largely to issues with mold and
natural disaster claims. As a result, many of the country’s largest
insurers are pulling out of the home insurance market entirely or they are
implementing hefty premium increases.
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- Realtorsâ
across the country are challenging the fairness of the CLUE system and the
impact it is having on our client’s ability to attain and afford
homeowners insurance. But in the meantime, the problem continues to
escalate.
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- So what can you do to protect yourself? In light of current conditions,
here’s the best advice for homebuyers/owners:
- Don’t wait until the last minute to apply for homeowners insurance;
apply immediately.
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- Request a CLUE report from the owner of any house you’re considering
buying, so you have a full record of the home’s claims history.
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- Think twice before filing a small claim against your homeowners
insurance; it may be better to reserve it for big-ticket items.
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- Remember that mere phone call inquiries to your insurance agent may be
tracked by the CLUE system.
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- For more information or to obtain a CLUE report for your home, go to
www.choicetrust.com or call (866)
527-2600.
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