What is CLUE Report?

CLUE — an acronym for Comprehensive Loss Underwriting Exchange — is a national insurance industry database with more than 40 million personal property claims. A CLUE report is the equivalent of a credit report for a house, which examines all claims reported to the insurance company for a given property over a five-year period, including water damage, fires, and mold. Reports show the date of loss, type of loss, and amounts paid out.

Traditionally, the insurability of a property was a topic left to the insurance company. But now real estate practitioners and their clients also must pay close attention to a home’s record of insurance claims to make sure secrets of the property’s past won’t come back to haunt them.

Insurance Risks Uncovered

CLUE reports also let potential buyers know about water damage, mold, and other issues that can make it difficult or prohibitively expensive to insure the home. Without viewing the report, big trouble may be brewing for buyers who wait until the day before closing — or even the day of closing — to get a paid insurance receipt.

Let’s say the property closes, ownership is transferred, the buyers get the keys, and the real estate practitioner gets paid. Life is good. But about two weeks later, the bottom can fall out if the buyers get a letter from their insurance company rescinding the policy due to a previous claim. Most mortgage documents implicitly state that a property must remain insured. If homeowners can’t find insurance elsewhere, they can be forced into paying the mortgage company’s premium insurance rates, or worse, foreclosing on the home because they can’t afford the hefty payments.