Buyers may look at a number of homes before finding the right one that’s affordable, large enough and meets all the needs of family members. Therefore, the last thing you want is to have last minute problems. To avoid unpleasant surprises, you should request a home inspection and check your credit score, in addition to viewing a CLUE report before applying for home insurance Texas State offers.
To avoid hidden surprises you should consider ordering a home inspection to have the electric, plumbing, cooling, heating and other items inspected to see that the house is in reasonable good shape before making an offer.
• An inspector will go through the home and test out the plumbing to make sure it works properly, has good water pressure, and he’ll check for leaks.
• The cooling and heating systems will be thoroughly inspected to make sure they are operating correctly, and he’ll note any problems he encountered on a written report for the home buyers.
• The inspector may check the electrical box, verify there is power to all rooms and check for scorch marks or any indications of electrical problems.
• Inspectors are not allowed to offer repair services, so home buyers can expect to receive an honest and unbiased report of the condition of the home.
Check Credit Score
Your credit score is a key component used to determine your credibility. Loan companies look for high credit scores, which is an indicator that you pay your bills on time and are responsible with money.
The banks also use credit scores to determine what loan rate you may be offered, which affects your interest rate and payments.
Your insurance company also looks at your credit score and report when determining rates for homeowners insurance.
CLUE Affects Homeowners Insurance
A CLUE report (Comprehensive Loss Underwriting Exchange) is extremely important when you’re trying to obtain homeowners insurance. CLUE is a database maintained by LexisNexis where insurance carriers report data about homeowners insurance claims and automobile insurance claims. All claims are maintained in the database for a period of seven years.
From a homeowners insurance standpoint, the database contains information listing all the claims made on a piece of property, the types of claims made and the amount the insurance carrier paid on the claim. After a buyer purchases a new home and applies for a homeowners insurance policy, your insurance carrier checks the CLUE database to look at previous claims.
The carrier looks for indications of repeated claims on homeowners insurance for fires, hurricane repairs, flooding and so on. For example, if the home was on the Texas coast and there were multiple claims for flooding from hurricanes, the underwriter might consider a much higher homeowner insurance rate.
If the CLUE report indicates serious problems with the home, it’s possible the applicant could be turned down for homeowners insurance. Buyers cannot request a copy of a CLUE report, but they can require the seller to provide one in the contract.
Buyers should check their credit score, have the home inspected and avoid last minute homeowners insurance concerns by requesting a CLUE report.