The Foreclosure Transaction and what to know – part 2

Why the lack of a CLUE insurance report in a bank owned property affects you.

A CLUE report is an insurance claims history issued by the insurance company of the home seller. It is normally provided by the seller of a home and given to the buyer during the first 5 days of the inspection period.  It requires the Social Security Number of the home seller so only they can request it.  

If a property has been recently foreclosed on, the bank has not had it insured but for a few weeks, if that, so they will not have one.   It is important that the buyer contact their insurance agent during the inspection period.  There is a central site that records all insurance claims on all homes, your insurance agent can access that site for an insurance history for you. 

Why is that important to you?    It will determine if you will be able to insure the property and what your rate will be.  Your insurance company has 59 days from when you purchase a policy in which to cancel that policy!!    They determine that cancellation  based on the possibility of future claims of a similar type to those in the past.  This is why you want your insurance company to access that history right up front, not in 59 days.

If the property has had severe water damage claims you will want to inspect those areas more carefully for mold.   Mold is a big bad four letter word that terrifies insurance companies.   If the property has had several break-ins,  you might want to have a security system installed.  Has the  home had a major fire?  There are all sorts of good reasons to know the insurance history of the property.

Also check out these posts:

The Foreclosure Transaction and what to know – part 1

The Foreclosure Transaction and what to know – part 3