Property insurance can affect the cost, timing, and feasibility of a real estate transaction. Before issuing a policy, an insurer may review prior claims associated with the applicant or property as part of its underwriting process.
One source of that information is a Comprehensive Loss Underwriting Exchange report, commonly known as a CLUE report. Reviewing a CLUE report can help a property owner identify inaccurate claim information, while buyers and real estate investors may ask a seller to provide one as part of their broader due diligence.
A CLUE report can provide helpful context, but it is not a property inspection, insurance quote, seller disclosure, or guarantee that coverage will be available.
CLUE is a claims-information exchange operated by LexisNexis Risk Solutions. It collects and reports up to seven years of home insurance and personal-property claims information provided by participating insurers.
Insurance companies may use CLUE information to help evaluate risk, determine eligibility, and price coverage. A report may also help a consumer understand what claims information insurers can see about them or their property.
CLUE reports are considered consumer reports and are subject to the federal Fair Credit Reporting Act, or FCRA. Consumers have rights regarding access, accuracy, privacy, and disputes.
The exact information depends on the records reported to LexisNexis. A property-related CLUE report may include:
Common claim categories may include:
A CLUE report may contain claims associated with the individual requesting the report, including claims tied to current or prior addresses.
Not every insurer contributes data in the same way, and the report may not contain every incident involving a property. Repairs completed without an insurance claim generally would not appear.
A person generally may request their own consumer disclosure report from LexisNexis. A prospective buyer typically cannot directly order the seller’s CLUE report without an authorized purpose or the necessary permission.
A buyer can ask the current owner to obtain their report and provide a copy. The seller may choose to share it as part of the transaction.
An insurance company or agent may also obtain claims information when it has a permissible purpose under applicable law, such as evaluating an application for insurance.
Consumers can request their report directly from LexisNexis Risk Solutions:
LexisNexis provides one free report every 12 months upon request. Requesting a copy of your own report does not affect your credit score.
Consumers should expect to provide information needed to verify their identity. LexisNexis may deliver instructions by mail explaining how to access the completed report online.
A CLUE report is separate from the credit reports available through AnnualCreditReport.com.
An insurer may consider prior claims when deciding whether to offer coverage. The existence of a claim does not automatically make a property uninsurable, but the type, frequency, severity, and recency of claims may affect underwriting.
Coverage decisions also depend on the insurer, property condition, location, construction, local hazards, and other risk factors.
Claims history may affect premiums, deductibles, coverage limitations, or other policy terms. Insurers use their own underwriting and pricing models, so the impact can vary significantly among companies.
A CLUE report does not provide a current premium estimate. Buyers should obtain an insurance quote for the specific property and proposed ownership structure.
Real estate lenders generally require evidence of acceptable property insurance before closing and throughout the loan term.
A CLUE report does not directly approve or deny a mortgage. However, claims history may affect the availability or cost of insurance, which can influence whether the borrower can satisfy the lender’s insurance requirements.
A prior claim may identify an area that deserves closer review. A history of water losses, for example, may justify additional inspection of the roof, plumbing, drainage, foundation, or interior finishes.
The existence of a claim does not establish that damage remains. It also does not prove that repairs were completed correctly. Buyers should verify the current condition through inspections, documentation, and qualified professionals.
Multiple claims involving the same type of damage may point to a recurring issue. Repeated water claims, for example, could relate to plumbing, drainage, roofing, or weather exposure.
A pattern does not establish the cause. Buyers should use the information to guide further questions and inspections.
A major fire, water, storm, or liability claim may justify requesting additional documentation.
Useful records may include:
If the report identifies a loss that was not mentioned in the seller’s disclosures, the buyer should ask for clarification.
Seller-disclosure requirements vary by state and transaction. A CLUE report does not replace the seller’s legally required disclosures or the buyer’s independent due diligence.
A report may contain information that appears to belong to another person or property. Errors can affect insurance underwriting and should be disputed promptly.
An open claim may affect the transaction, repairs, insurance coverage, or allocation of future insurance proceeds. Buyers should ask the seller, insurer, closing professional, and legal counsel how the claim will be handled.
A CLUE report has important limitations.
It does not necessarily show:
The report should be viewed as one part of the due-diligence process.
A seller disclosure generally provides information the seller is required to disclose about the property under applicable state law and the terms of the transaction.
A CLUE report contains claims information reported to the CLUE exchange. The two sources may overlap, but neither replaces the other.
A seller may know about damage that never resulted in an insurance claim. Conversely, a CLUE report may show an older claim that the seller does not remember or that predates the seller’s ownership.
Buyers should review both sources when available and investigate material inconsistencies.
A CLUE report describes reported insurance-claim history. A property inspection evaluates observable conditions at a particular point in time.
An inspector may identify:
A clean CLUE report does not mean a property is free from damage or defects. Likewise, a prior claim does not necessarily mean the property currently has a problem.
Insurers may use claims history alongside other information to evaluate an application. Depending on the circumstances, a prior claim could contribute to:
Insurance practices and permissible rating factors vary by insurer and state.
Investors should obtain an actual quote rather than assume that the seller’s current policy, premium, or insurer will remain available after the purchase.
If a consumer believes their report contains inaccurate or incomplete information, they can dispute it with LexisNexis and the insurance company that supplied the information.
Compare the report with:
Identify the specific information believed to be inaccurate.
Follow the dispute instructions provided by LexisNexis. Include a clear explanation and copies of supporting documents.
Consumers may also contact the insurer or other company that supplied the disputed information.
Retain copies of the dispute, supporting documents, correspondence, and delivery confirmation.
Under the FCRA, the consumer-reporting company and the company that supplied the information must conduct a reasonable investigation without charge. LexisNexis will provide the results and an updated report when applicable.
Because correcting a report may take time, property owners should review their CLUE information before applying for new coverage or listing a property when possible.
If an insurer uses information from a consumer report to deny coverage, increase a premium, or take another adverse action, the consumer may be entitled to an adverse-action notice.
That notice should identify the consumer-reporting company that supplied the information and explain the consumer’s right to request a free copy of the report and dispute inaccurate information.
The consumer-reporting company does not make the insurer’s underwriting decision and generally cannot explain the specific reason the insurer took the action. Questions about the decision should be directed to the insurer.
Property insurance should be evaluated early in the acquisition process—not immediately before closing.
Real estate investors should consider:
A standard homeowners policy may not be appropriate for a non-owner-occupied rental, vacant property, major renovation, or construction project. The policy should match the property’s actual use and risk profile.
A buyer or investor may benefit from asking the seller for a recent CLUE report, particularly when:
The seller may decline or may be unable to provide the report. Buyers should still obtain insurance quotes and complete appropriate property inspections.
Sellers may want to request their own CLUE report before listing a property. An early review can help identify errors and provide time to dispute them.
If the report contains legitimate claims, the seller can gather repair documentation and be prepared to answer buyer questions. Clear records may help distinguish a resolved loss from an ongoing property issue.
Sellers should consult their real estate professional or attorney regarding applicable disclosure obligations.
A CLUE report provides up to seven years of home insurance and personal-property claims information reported to LexisNexis. Insurers may use that information when evaluating coverage and pricing.
For buyers and real estate investors, the report can identify prior losses that merit further questions, documentation, or inspection. It does not establish the property’s current condition or guarantee that insurance will be available.
The strongest approach is to combine claims-history information with professional inspections, seller disclosures, repair records, insurance quotes, and a careful review of the proposed policy.
CoreVest offers business-purpose financing solutions for residential real estate investors. Contact our team to discuss financing options for your next rental, renovation, or construction project.
This article is provided for informational purposes only and does not constitute legal, tax, insurance, investment, financial, real estate, or lending advice. Insurance availability, pricing, reporting practices, and loan requirements vary by insurer, lender, jurisdiction, property, and transaction. All loans are subject to underwriting, credit approval, eligibility requirements, and applicable terms and conditions.
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