Managing Your Money

Buying a new house? Get a CLUE report

When people buy a new home they often include a financing contingency and a home inspection contingency. These contingencies allow the buyer to back out of the deal if they cannot obtain a mortgage on the property or if the inspection turns up some deficiencies. However, you might also want to include a contingency that requires the seller to produce a copy of the home's CLUE report.

The Comprehensive Loss Underwriting Exchange (CLUE) report will tell you what kinds of insurance claims have been filed by previous owners. And why is this important to you as a buyer? First, the current owners may have neglected to tell you about past damage to the house. The CLUE report will tell you the exact date of loss, type of loss (water damage, mold, fire, etc) and amount of loss for all claims. And, perhaps more importantly, if the home does has a long history of substantive claims, you might be denied home owners insurance and without a certificate of insurance, you won't be able to take out a mortgage and close on the purchase. That's a pretty big deal. While outright denial of coverage is usually quite rare, you could find yourself only being able to get coverage in a high risk pool (or paying much more than you would for a policy on a house with a "clean" claims history.)

If you are a potential seller of a home, it pays to get a copy of your CLUE report before putting the house on the market. That way, you can fix any inaccuracies that might be contained in the report. To get a copy, which should cost about $20, visit

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