CLUE Reports and Arizona Homeowner Insurance

If you are thinking of buying a home in Arizona be sure and obtain a CLUE report (claims loss underwriting exchange) – a claims history report. This report is what tells you and your insurance company what type of claims the seller has had BEFORE you complete your purchase. Providing a CLUE report usually is mandatory but in some cases it is not required. Many insurance carriers today will not insure a home if it has a history of certain claims, particularly theft.

If the current owner (seller) has not lived in the house for long or recently changed insurance carriers they may provide an abbreviated claims history report. If that is the case ask your current insurance agent to do his/her own claims search. That will give you a more broad view of what type of claims your potential purchase has or has not had.

Why worry so much about past claims?

Mother nature claims are not such an issue. Most insurance carriers ignore claims that involve wind and hail. It’s claims involving theft and water that concern the carriers. To them, a water claim may show a lack of previous upkeep. Water hoses connected under a sink, dishwasher, clothes washer and toilets do age and break. If they have not been upgraded to newer hoses a prior water break may give an indication of a future claim (at least in the insurance carrier eyes).

When you are previewing homes to buy, pay attention to items like water hoses. If they have older styles, such as aluminum hoses – be wary. Or plan on replacing immediately after purchase.

Theft claims are a different animal and present their own problems. If you have a home with a prior theft claim your insurance carrier may require you install a monitored security system.

In worst case scenarios where a home you are seeking to purchase has multiple claims in the past 5 years, it might even be difficult to find a competitive rate. The insurance industry is extremely competitive and carriers are tightening up underwriting. When buying a home simply pay attention to this claims history and look a little deeper at the hoses connected to water inside the house.

And as always, if you want to save money on your Arizona homeowner insurance please consider obtaining a quote from us.
Gary Brown, Agent/Owner

P.S. I am an Arizona realtor too. If you know anyone buying or selling a home please keep me in mind.