Get a CLUE to a Property's Insurability

[JoefromPhilly]

Here is one area that gets overlooked by investors. It is the insurability of a property, especially if it is a rehab property you are taking on. If a previous homeowner filed one too many claims on a property (as little as 2 in some cases), or if too many inquiries were made about potential claims, the property can be blacklisted and denied hazard insurance coverage. Read this article about how a couple had a policy denied by State Farm due to water damage:

http://moneycentral.msn.com/content/Insurance/Insureyourhome/P35345.asp

The moral of this story is to check a property's claim history by getting a CLUE report. You can do so at Choice Trust (http://choicetrust.com). For the few dolalrs it costs to do so, it can save a lot of headaches. Keep in mind that if you are going to rehab and then resell a property, or even refinance it and keep it, a new mortgage will be obtained on the property. If it can not be insured, the odds of getting the mortgage will be nil. or, the cost to get the policy may exceed your budget on it.

[Pasquini]

This is really good advice. In my 'day job' my company is the exclusive distribution point of the CLUE Risk Only Reports. This disclosure is mandatory in California as part of the CAR purchase contract. Expect it to become mandatory elsewhere as insurability is an issue. Your insurance record may be spotless, but the previous owners may not have been. You can't get out from under their misdeeds. They follow the house, and there is nothing you can do about it.

[Dan Auito]

Pasquini the magician, can you get us a link to obtain the clue reports? the link in the post above is dead! :rolleyes:

[Pasquini]

CLUE reports are protected under the Fair Credit Reporting Act and must be procured by either the current owner, or a realtor acting on behalf of that owner since they can function as their fiduciary.

A full CLUE report can be had at http://www.choicetrust.com You probably don't want one of those as it contains not only the five year claims history, but also the owners personal loss history as well as their credit scores and history. Disclosure of this information causes problems, and at least one realtor I know of is currently being sued for providing such a report to a buyer.

You are better served getting a CLUE Risk Only Report (CLUE ROR). This contains only the five year loss history, and can be purchased for $19.50 by members of the real estate profession or other settlement services at http://www.clueexpress.com on the owner's behalf. If a homeowner wants to secure one themselves they should visit http:www.propertyid.com . Property ID can also be reached by dialing 800.626.0106

Thanks for the info, just stepping in here instead of another post up! Dan