When requesting a homeowners insurance quote on a home you’ve just purchased, the last thing you want to hear is that you can’t get insurance at all. Unfortunately, this nightmare scenario can happen, leaving you liable for all damages and, in the worst-case scenario, in breach of contract with your mortgage lender because their investment isn’t protected. So how can you prevent this from happening to you?
What Insurers Consider When Calculating a Homeowners Insurance Quote
Insurers have the right to know that every property they insure is sound enough to merit insurance coverage. Otherwise, it’s quite simply a very bad investment for them. That’s why many insurers will request a CLUE report after you purchase a property. A CLUE report is generated by the Comprehensive Loss Underwriting Exchange, which records the history of all insurance claims filed on the property. This means that even if your claim history and credit score is good, the property itself can stand in the way of getting an insurance policy due to a bad claims history. Problems like black mold, flooded basements, and structural damages can sorely affect a property’s viability for insurers.
Though you can’t request a copy of a property’s CLUE report until you are the owner, there are ways to safeguard yourself against this potential situation. You can demand that the current homeowner provide a copy of the CLUE report before you agree to buy the property, so you can review it and discuss with your insurance agent whether it will present any problems. If you need a copy of a CLUE report on your own property, you can request it from the CLUE Inc. Consumer Disclosure Center in Atlanta, Georgia.
Get Your Homeowners Insurance Online
It’s important to realize that insurers can’t request a copy of a property’s CLUE report until after they’ve agreed to insure you and the home belongs to you. That’s why most insurers include a clause in the fine print of your insurance policy that allows them to back out within a set amount of time if they find information that proves the home has a bad claims history. So whether you get your homeowners insurance online or at your insurance agent’s office, remember to take all the time you need to review the policy carefully. If you have any reason to think the home you’re thinking of buying might prove to be uninsurable under a comparable clause, rethink your strategy. You could look for another insurer, or more wisely, look for another home to buy.
Once you’ve found a home you like and the seller has provided you with a copy of the CLUE report, it’s still smart to have an inspection done to see if there are any structural problems you need to be aware of. And when it’s time to make a home insurance price comparison to secure insurance for your new home, remember to consider making adjustments such as installing a home security system or flood proofing your basement to reduce your home insurance rates.
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