Homeowners insurance premiums and the lack of available coverage have become significant barriers to homeownership. Most affected are those who have no credit history and existing homeowners who have water-related claims.

Insurers use credit scores and the Comprehensive Loss Underwriting Exchange (CLUE) database, which holds claim histories of individuals and properties for five years. Insurance companies share this database in determining whether to insure the Buyer and your property. Even if your Buyer has been a loyal insurance customer for a number of years but your property has a number of claims against it, the Buyer may not be able to get insurance.

Insurance companies have reduced the number of policies they are writing. Companies are tightening underwriting criteria for potential policy owners and properties themselves. The insurance Information Institute says the average cost of homeowners insurance increased by eight percent in 2002 and estimated to have risen another nine percent in 2003. But many homeowners have seen increases ranging from 30 to 70 percent.

The insurance industry says the increases stem from a variety of factors, including catastrophes like Hurricane Andrew and the Northridge Earthquake that occurred in recent years. Over the past twelve years insurers paid out more than $100 billion in catastrophe-related losses - about $700 million per month - many times more than in previous decades.

Another contributor is mold. Multi-million dollar jury awards, sensationalized reporting in the media and profiteering by some individuals have led to an explosion in mold claims and costs.

One way to examine your claims history is through the CLUE report. About 600 insurers, making up about ninety percent of the market, feed into the CLUE database. The report will show every claim filed over the past five years. The database covers 27 types of losses - including dog bites, flood, earthquake, theft, vandalism, wind, and medical payments. You can order an electronic report from Choicepoint, the company that owns the CLUE database, for a minimal cost.

Your Buyer may request you to provide a copy of your CLUE report as a condition of the sale. Once you have decided to place your property on the market, you may want to order a CLUE report to check it for accuracy and have it available to the Buyer.

Get a CLUE - www.choicepoint.com