Homebuyers and sellers should be aware about issues involving homeowners insurance and the C.L.U.E. database. C.L.U.E. stands for Comprehensive Loss Underwriting Exchange and is a collection of homeowners insurance claim history enabling insurance companies to access five years worth of prior claim information to evaluate risks. The database is maintained by Choice Point Inc., a private Georgia firm, and contains over 40 million claims records on houses in all 50 states. Over 90 percent of insurers providing homeowners coverage provide data to the CLUE system.

In the same way that having a bad credit record affects your ability to finance a home, negative information in the CLUE database can affect whether a purchaser can get a homeowners insurance policy and at what cost. Many homebuyers are facing the grim reality of the decreasing availability and affordability of homeowners insurance. When a homeowner applies for insurance on a property, the insurance company will usually check the CLUE database to see what claims or reports of damage are on file about the property, and may charge higher premiums or possibly decline to offer insurance coverage. Without homeowners insurance it is nearly impossible to obtain a mortgage loan and in most instances a sale will fall through. Sellers of properties who never made an insurance claim but only lived in the house for a short period of time may be unaware of potential problems because of claims made by the prior owner. Another problem arises with