Jeff’s Carlsbad Blog for First Time Home Buyers

Insurance on your new home – Part 2

Posted in Insurance by Jeff Dowler on October 6, 2006

Here is some more information on insurance and stuff you should know as a home buyer.

Q.  When should a buyer apply to obtain an insurance policy to cover the property being purchased?

A.  The interest of both buyers and the sellers now suggests that the buyers should begin their search for insurance no later than the time of the contract to purchase is signed.  This helps to assure a firm commitment for the issuance of a policy well in advance of the settlement of the transaction.  Waiting until the last days or even weeks before the closing can limit the opportunities of the buyers and sellers to address the affordability and availability issue and, if needed, to find alternatives for difficult to insure properties.  There have been many examples of transactions which have been adversely affected in some manner because of problems associated with insurance availability/affordability.

Check with your agent  regarding any state-specific requirements that may exist or forms that need to be signed as part of the purchase agreement. What we have here in California may not apply to your situation, but the concept of checking on insurance is a wise precaution anywhere.

Q.  What kinds of events/records can affect the ability to obtain insurance on a property being purchased?

A.  A number of factors can affect the availability and cost of homeowner insurance on a property being purchased.  For example, they include:a.     past claims filed on the property (up to previous five years)b.     poor insurance credit score of the prospective purchaser c.     past claims filed by the property purchaser on other propertiesd.     physical characteristics of property (e.g., leaky roof)e.     characteristics of the property’s location (e.g., proximity to fire station, regional weather conditions) Q.  How does the insurance company know what claims have been filed in connection with the property? 

A.    Approximately 90% of all insurance companies contribute information regarding

claims to an insurance industry database.  When underwriting a new policy the insurance company may obtain a report from this system from one of a couple different sources to determine the property’s claims history.  This report is most often identified as a comprehensive loss underwriting experience report or a “C.L.U.E. Report.”  The report contains information regarding property claims filed in connection with a particular property and claims filed by a particular insured person.  For a fee the current owner of the property may obtain a copy of this report. A copy of the report is available to the property owner through companies such as ChoicePoint, Inc, either by writing to ChoicePoint, Inc. located in Alpharetta, Georgia, or by going to their website,, and A-Plus, either by writing to A-Plus located in Jersey City, New Jersey or calling 800/709-8842. 

Didja know?

Ø       It is possible to lead a cow upstairs, but not downstairs.Ø       Coca-Cola was originally GREEN!Ø       Every day more money is printed for the board game MONOPOLY than the U.S. Treasury.Ø       The first couple shown in bed together on prime time television was Fred and Wilma Flintstone.Ø       The smartest dogs are: 1) Scottish border collie, 2) Poodle, and         3) Golden Retriever.Ø       The dumbest dog:  Afghan hound.Ø       The Hawaiian alphabet has only 12 letters.


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