Realty Executives Elite

Verna's Archived Notes
May 2003 Archives
Verna's 2002 Archived Notes by the Month
Verna's 2001 Archived Notes by the Month
Verna's 2000 Archived Notes by the Month
Verna's 1999 Archived Notes by the Month
Search this Site
Back to the Start Page
Verna's Notebook Archived Issues

GREETINGS FROM VERNA ACKER
REALTY EXECUTIVES Elite
414.534.7400

FOR YOUR INFORMATION
Real Estate Information from
Western Racine County, WI
May 19, 2003

VERNA'S ON-LINE NEWSLETTER IS BACK

Starting with this issue, the newsletter will be back on-line on a regular basis. As before, I will do my best to bring you topics of interest to the buyers and sellers of real estate. The letter has been off-line for a while because of the circumstances with which I was dealing regarding my husband's health. I'd like to thank everyone who offered so much support and caring words during our difficult time. Thank you for all of the special condolences that were sent. It was gratifying to hear from you. There are no adequate words to tell you how very much the encouragement and the prayers meant.

THIS WEEK'S TOPIC IS OF PRIMARY IMPORTANCE WHEN YOU ARE PURCHASING A HOME AND WHEN YOU ARE SELLING A HOME, TOO:

Homebuyers Must Shop for Insurance Early For as many years as any of us can remember homebuyers have typically taken the task of obtaining homeowner's insurance for granted. BUT THINGS HAVE CHANGED!

Insurance premiums are on the rise and the insurance industry is becoming increasingly cautious about what risks they will cover. For example, WISCONSIN PROPERTIES WITH 60 AMP ELECTRICAL SERVICE OR WATER DAMAGE CLAIMS MAY BE INSURABLE ONLY AT A VERY HIGH PREMIUM, IF AT ALL.

Unbeknownst to most consumers, insurance risk evaluations consider not only the property condition, but also the claims history on the property, past insurance claims made by the buyers and the credit history of the buyer. The claims history information that insurance companies use often comes from the Comprehensive Loss Underwriting Exchange (CLUE) database that tracks claims on properties and property owners. This claim information is shared by the 90% of insurance companies who report claim and inquiry information to the database.

CLUE reports detail every claim and most inquiries made over the past five years. A CLUE report may be obtained by a property owner from the Choice Point Web Site www.choicetrust.com for $12.95. Insurance companies use these reports and so should homebuyers. It would be a good idea for buyers to order the CLUE report on themselves and to ask the sellers to provide the CLUE report on the property being purchased. Buyers can find out about prior property damage and be prepared if there is going to be difficulty obtaining affordable insurance on the home.

All consumers should be aware that the insurance companies not only report claims to the CLUE database when the insurer paid out on a loss, they will also report telephone calls where the policy holder calls to ask an insurance agent what coverage and deductibles apply in a given situation. If any damage or loss is mentioned, it may end up in the CLUE database, even though the insured never made a claim and the insurer never paid any money. Thus it may be unwise for consumers to contact their insurers unless they are sure that they will file a claim.

Another piece to the homeowner's insurance puzzle is the insurance score, which is calculated based upon a person' credit history. The insurance companies assert that there is a correlation between a person's credit history and the likelihood that they will file an insurance claim. Rather than use a person's credit report to make this evaluation, THE INSURANCE COMPANIES STREAMLINE THE PROCESS AND USE EITHER THE CREDIT SCORES OFTEN USED BY LENDERS AND CREDIT CARD COMPANIES, OR INSURANCE SCORES. Credit scores and insurance scores are both based on credit history information, but computed using different computer programs - the credit score is designed to predict whether a person will pay their bills on time while the insurance score is designed to predict whether a person will have insurance claims.

BUYERS SHOULD BE ARMED WITH THIS INFORMATION EVEN BEFORE THEY BEGIN TO SHOP FOR HOMES BECAUSE THEIR CREDIT REPORT INFORMATION WILL IMPACT THEIR ABILITY TO OBTAIN A MORTGAGE AS WELL AS THEIR ABILITY TO OBTAIN AFFORDABLE HOMEOWNER'S INSURANCE.

[This report is taken from The Wisconsin Realtor, May 2003 issue, written by Debbie Conrad, attorney counsel for the WRA.)

If you have questions regarding this article, contact your insurance agent. I can also provide more detailed information from our WRA web site if you request it.

GREETINGS FROM VERNA ACKER
REALTY EXECUTIVES Elite
414.534.7400

FOR YOUR INFORMATION
Real Estate Information from
Western Racine County, WI