Many factors affect the availability and cost of homeowner’s insurance. Depending on the insurance company, these factors may include past insurance claims filed on the property being purchased, past insurance claims filed by the buyer on previous properties, and the buyer’s credit score. Some insurance companies use a database known as the Comprehensive Loss Underwriting Exchange (“C.L.U.E.”) in their underwriting practices to track the insurance claim history of a property and of the person applying for insurance coverage.
To reduce the risk of insurance cancellation, a buyer should ask their insurance agent about the company’s underwriting practices and request that their insurance agent confirm in writing the availability and cost of insurance early in any real estate transaction. Although a buyer cannot directly obtain the claims history of a property, a buyer may ask the seller to provide a copy. However, be aware that obtaining a claims history or C.L.U.E. report on a property will not give a buyer all the necessary information to determine insurability, since not all insurance companies use this information or use it in the same manner.
Property owners may request a five year claims history from their insurance agent or purchase a C.L.U.E. report online at www.choicetrust.com or by calling 866-527-2600. For more detailed information on homeowner’s insurance, please read “The New Reality of Property Insurance – What You Should Know” at www.aaronline.com/documents/insurance.pdf.
For additional insurance information or to file a complaint against an insurance company, visit the Arizona Department of Insurance website at www.id.state.az.us/