Buyer Tip- Check the Insurance Cost for Your New Home Before Offering

Real Estate Agent with Keller Williams Capital Properties DC AB15253

If you are financing your purchase, your lender will require you to get homeowners' insurance.  It just makes sense to get homeowners's insurance. Homeowners insurance can pay for repairs if your home is damaged by a storm, fire, or other disaster or if you’re a victim of theft or vandalism. Even if you are paying cash, you should get homeowners' insurance - but how much will it cost? Insurance rates can vary widely from home to home -  based on many factors, including the location of the property and whether there have been previous claims filed on the property.  Don't be surprised a few days before closing when you discover that that dream house has a nightmare price tag for insurance.

Most people understand that the region where they live is important because certain parts of the country experience more tornadoes, hurricanes, earthquakes or wildfires than others. Many people don’t realize, however, that homeowners insurance rates can vary widely from one neighborhood to another.

Neighborhood-Specific Factors That Can Affect Insurance Rates

Proximity to emergency services can impact homeowners insurance rates. If you own a home near a police station, officers could respond quickly if someone broke into your home. Speedy action by the police may catch the thief before your valuables disappear.  Thieves might decide to skip your house altogether and target one farther from the police station. From an insurance company’s perspective, your home would be less risky to insure than one a few streets over, or even one down the street.

Fires are a frequent source of homeowners insurance claims. A house that’s just a few minutes away from a fire station could have much lower insurance rates than one 10 minutes away because a fire could be extinguished much faster and damage could be minimized at the closer house.

Some cities have several police and fire departments that serve different neighborhoods. Depending on where the lines separating jurisdictions are drawn, your neighbors across the street could be served by different departments than you are. That means one house could have emergency responders around the corner, and the other might have to wait longer for help to arrive. That could affect homeowners insurance rates.

Crime rates of course impact the homeowner insurance premiums.  High crime areas will have higher rates than those with low crime rates. Neighborhoods with lots of security systems in the homes will have lower insurance rates as will areas with neighborhood watches.

Insurance companies base their rates, in part, on how much money they’ve recently paid out in claims. If several of your neighbors have filed claims for vandalism or theft, that could affect everyone’s rates.

Get a C.L.U.E Report on Your New Home

Insurance rates can also vary depending on whether the current owner has filed several claims on that dream home you want to buy.  How do you find out whether that has happened? Ask for a C.L.U.E. Report!

There are two major property claim databases that contain loss history reports, C.L.U.E. (Comprehensive Loss Underwriting Exchange) and A-PLUS (Automated Property Loss Underwriting System). Most people refer to the reports generated by either system as C.L.U.E. reports because they are most often used by insurance companies. The C.L.U.E. database, owned by LexisNexis, enables insurance companies to access information on claims that have been filed within the last seven years.

When you apply for home insurance, your insurer will request a loss history report to determine whether you, the buyer, or the seller have filed any claims during the past seven years. The database also includes damage reports that were later closed when the owner made the repairs himself.

The Fair Credit Reporting Act guarantees you the right to receive a free copy of your loss history report if you are denied insurance due to information contained in it. Additionally, if you have a dispute with an insurer about the information in the report, you can ask that your account of the events be included in the report. You can order a free copy of your C.L.U.E. report once every 12 months.

CLUE reports are helpful to the seller and the buyer

When buying a home, you can request a C.L.U.E. report from the seller as a condition of the sale.  It also is possible for the listing agent or seller to order a  home seller's disclosure report at the time of listing which will show  potential buyers the loss history for that property.  Buyers will feel better knowing that the property has not experienced a history of damage in the past which might have been covered up by a devious seller.  If the report for the property indicates that insurance losses haven't occurred within the past five years, the buyer can feel comfortable that insurance loss history of the property should not impact the availability or pricing for home insurance.

Ways to Lower Your Premiums
Many of the factors that homeowners insurance companies consider when setting their rates are beyond your control, but you might be able to make some changes to reduce your premiums. If you live in a high-crime area, installing a security system, improving lighting in the yard, trimming bushes so burglars can’t conceal their activities, and making other security improvements could lower your rates. If you aren’t sure why your insurance premiums are so high, contact your carrier to get some insight and figure out if you can make changes to your property to lower your rates.



Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Roy Kelley 12/03/2019 01:00 AM
Home Buying
clue report
home buying advice
lise howe group
insurance rates for new homes

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Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy


It certainly makes sense for potential buyers to know the insurance costs.  Happy Tuesday.  A

Nov 26, 2019 06:14 AM #3
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Great advice, Lise. This always seems to be an after-thought for many home buyers, but it's something I always remind people to do upfront so as to avoid nasty surprises.

Nov 26, 2019 06:28 AM #4
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Lise it is wise to shop for Homeowner's Insurance early, premiums can vary by significant amounts from insurance company to insurance company.

Nov 26, 2019 07:41 AM #5
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Lise from snowy Colorado,  clue reports are always so important and I am amaze some people still do not call on them

Nov 26, 2019 08:32 AM #6
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good morning Lise Howe - It can be a very big factor and claims and area cause wide rate variations.

Nov 26, 2019 08:52 AM #7
Lottie Kendall
Compass - San Francisco, CA
Helping make your real estate dreams a reality

Hi Lise - home insurance has become a hot topic in California after the disastrous wildfires of recent years. I've heard some absolute horror stories. We now, of course and rightly so, have a new advisory to include in our real estate transactions.

Nov 26, 2019 07:02 PM #8
James Dray
Fathom Realty - Bentonville, AR
Exceptional Agents, Outstanding Results

Morning Lise.

I always do that, as well as any taxes for the area.  Make it a great day

Nov 27, 2019 02:35 AM #9
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

This is very good advice to share with prospective home buyers.

Nov 28, 2019 05:44 AM #10
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Lise I hope you and your family had a happy and safe Thanksgiving today.

Nov 28, 2019 08:19 PM #11
Richard Weeks
Dallas, TX
REALTOR®, Broker

Great idea to have a buyer get a CLUE report.  We have a form with this recommendation that we have the buyer sign.

Nov 29, 2019 03:33 AM #12
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Hi Lise- I'll bet that there are many home buyers who don't look at what their insurance costs will be. You've filled in a lot of the blanks. 

Nov 30, 2019 04:57 PM #13
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

                             what i learned

                                                 Thank you, Lise.

Nov 30, 2019 07:08 PM #14
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
Marketing Agent for The Todaro Team

Good morning, Lise Howe good advice here for those who are searching for the right home....once they find it, they need to have a "ballpark" figure for insurance..... some will be shocked....flood zones,'s outrageous.

Dec 01, 2019 04:24 AM #15
Tom Bailey
Margaret Rudd & Associates Inc. - Oak Island, NC

Easier said than done in NC! Getting a firm quote is not as easy as just a call to an agent. Here your best reference is the previous owners insurance cost

Dec 01, 2019 06:25 AM #16
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

Clue reports are an excellent resource she said to the choir.

Dec 01, 2019 08:15 AM #17
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Good evening Lise Howe ,

Excellent post and advice. I'm so glad that Kathy Streib featured your post. I always have my buyers check the clue report while we are in the option phase of the contract. I have several insurance agents who will give buyers a quote immediately upon running the clue report. At least we have a ball park and know if there are any extenuating circumstances!

Dec 01, 2019 04:18 PM #18
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

Oh you have inspired a post.  Thanks for that.  I needed some inspiration.

Dec 01, 2019 08:43 PM #19
Bill Carroll
Corcoran Real Estate - Westhampton, NY

Very good info here Lise, thanks.

Dec 04, 2019 05:33 AM #20
Patricia Feager, MBA, CRS, GRI,MRP
Selling Homes Changing Lives

Lise Howe - This is another great post that I hope gets a FEATURE on ActiveRain! I am always surprised when I'm the first person to tell my buyers to start talking to Insurance Rep's before they decide on a home and to factor in the insurance cost rates withouth skimping on rates. Read the policy before you buy, I say. And get that CLUE report too!

This is a wise and wonderful message you posted. Fingers crossed it will get featured.  

Dec 05, 2019 06:32 AM #21
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Pro Lifestyle Solutions

So, are you saying a sellers property losses will affect a buyer's premium for insurance? Wouldn't any major repairs on a property appear in the TDS and if it wasn't, would the seller be liable for any repairs that were made then that wasn't disclosed? Wouldn't the home inspection report mitigate any premium rate increase rather than the CLUE report

Dec 12, 2019 12:44 AM #22
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Lise Howe

Assoc. Broker in DC, MD, VA and attorney in DC
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