Have you heard the term, Get a Clue? If you are in the market for a home, it is a good idea. In this case a CLUE is an acronym for Comprehensive Loss Underwriting Exchange. Insurers use a CLUE report as one piece to evaluate the risk of a property.

As a prospective buyer of a home, you can request that the seller provide this report as part of your inspection process. A CLUE report will reveal prior claims filed during the previous five years and help you understand potential risks. In addition, knowledge of previous loss can help you evaluate the extent and quality of any repairs or upgrades to the home.

Sellers with a history of multiple property claims can adversely effect the new buyer’s home owner insurance premiums. Insurance underwriters evaluate a property using multiple criteria. Previous claims filed against a property is among the criteria. To an underwriter, the property is a higher risk if it experiences multiple claims.

When a potential buyer makes an offer on a property, there is the right to conduct any inspection the buyer deems necessary. A CLUE report can be considered an essential part of the inspection process. It is the buyers right to get a clue. However, only an owner of a property can order the report. The buyer must request that the seller contact their insurer to obtain the report.

The CLUE report will include information on any listed loss such as the date of the loss, type, amount paid by the insurer, the status of the claim (whether closed or still pending), the name of the insurance company and the type of policy. The report will not include personal information about the sellers, so that will not be a concern.

When should I get a clue

As a buyer of real estate, you have the right to know the condition of the home. A CLUE report is one important element you can use to evaluate a property. So ask your agent to help you get a clue when you make an offer for a property.

Click the link for additional information about a Comprehensive Loss Underwriting Exchange report.

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The senators are calling for the following reforms:

1. Reevaluate the long-term role of WYOs (private insurance companies) in the NFIP and whether eliminating the “middlemen” creates greater efficiencies and cost-effectiveness
2. Eliminate flat fees and institute a performance-based compensation structure for WYOs and other private contractors to reward quality, rather than quantity of claims handled
3. Require WYOs to provide FEMA, policyholders and their advocates, any and all documentation that was produced to process their claim or adjudicate an appeal
4. Improve the appeals process by eliminating arbitrary deadlines and giving policyholders the option of appealing their claim to an independent, third-party arbitrator to restore trust in this process
5. Provide a streamlined method to handle legal disputes in good faith that prevents insurance attorneys from billing exorbitant fees at the expense of policyholders and ensures every plaintiff gets what they are entitled to, rather than spending extensive resources to deny and fight legitimate claims in court based on technicalities

In my opinion, these reforms do not address the core of the problem. The cost of flood insurance for homeowners and businesses has gotten way out of hand. The NFIP was begun to address this problem because private insurers were unwilling to take the risk at a reasonable cost and many times not at all.


Whether the program was a mistake and whether it has encouraged development in vulnerable areas is beside the point. What we have now cannot be changed easily. It is unconscionable to abandon property owners who have one of their most important investments wrapped up in vulnerable real estate. In this area of Florida there are many homeowners and business owners who were lead to believe that that they were making a reasonable investment and would be able to afford their insurance.

While this problem must be addressed, a reasonable alternative must be offered. To allow insurance premiums to skyrocket would cause real estate values to plummet in vulnerable areas. Owners would be stuck with worthless properties. On the other hand, as a country we cannot continue to subsidize these areas and allow property owners to repair or rebuild in flood prone areas.

My suggestion is to grandfather insurance premiums in these areas. Property owners should be encouraged to purchase NFIP insurance at reasonable cost and once bought, they should be able to renew their policies at no higher increase than inflation. A standard should be set that if a property is damaged by flood and the repairs are beyond a certain percentage of the value of the property or other criteria, the home will be condemned, the owner will receive payment and if the owner chooses to rebuild at the same location, no new policy shall be written. Property owners should receive assistance in relocating to an area outside of the vulnerable area.

There should also be a neighborhood wide policy. If a certain percentage of homes in an area are condemned, the neighborhood should be condemned and owners encouraged to move. The land can then be reclaimed as a clean, natural area.

This policy would offer property owners security and fairness while gradually eliminating development in vulnerable areas.

Finally, there should be a means of addressing the concerns of owners of vacant land in these areas which will be zoned uninsurable. A tax credit equal to the assessed value of the land could be considered.

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Let that be a lesson to all of us in Florida. Flood insurance is a must. Many people who we help purchase a home in the area do not understand SW Florida insurance needs, especially flood insurance. They assume that because a home is not in the high risk flood zone and a mortgage company will not require them to carry flood insurance, that they are safe. As we can see from the incidents in South Carolina and other states along the Atlantic coast this week, that is not the case.

However, the good news. If one does buy flood insurance in a low risk zone such as the 500 year floodplain where much of North Port is located, or the X zone designated Out of Special Flood Hazard Area, the cost of FEMA backed flood insurance is quite reasonable. Much of Port Charlotte, especially the areas north and east of US 41 are located in the X zone.

My home is in the 100 year floodplain. I carry FEMA flood insurance and the cost is not unreasonable. While it is possible there could be a storm surge during a tropical storm or hurricane, I have not experienced a problem this far. While a flood would certainly be inconvenient, I have the knowledge that I am covered if needed.

Anyone considering a waterfront home where they can keep their boat should carefully investigate flood zones. Almost all waterfront, canal homes are in a flood zone. It is rare to find one that is not and the only ones I have found are a LONG motor to open water.

Flood insurance is a necessary evil. Please do not buy a home in SW Florida without carefully considering your insurance needs.

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It is highly recommended that no matter where you own a home in Florida, you purchase flood insurance. The cost is significantly reduced in the low risk areas but if you experience a flood, you will wish you spent the money.

The post Flood Zone Changes appeared first on Southwest FL Real Estate.

X – Areas with this designation are considered to be in the lowest risk areas. This does not mean that they will not flood, it means that there is a low probability.

B – 500 year flood plain. The mathematical probability of a property experiencing flooding in this area is 1 in 500.

A – 100 year flood plain. The mathematical probability of a property experiencing flooding in this area is 1 in 100.

V – Velocity Zone. This area is near the coastline and rivers, bays, coves, estuaries and any such area. These areas have the highest probability of flooding.

FEMA produces flood maps which are used by mortgage companies to determine whether a property is located in a flood risk area. If so, most mortgage companies require flood insurance. FEMA continues to update flood zone maps and an area that is not currently in such a zone could be reassigned if determined by FEMA.

For more info, visit the FEMA flood hazard website page: https://www.fema.gov/flood-maps/tools-resources/flood-map-products#preliminary

FEMA instructs the local zoning boards in the formation of building codes that meet FEEMA Standards. In order to qualify for flood insurance underwritten by the US Federal Government, local zoning must meet FEMA minimum standards, however, local governments may choose to impose higher standards. Part of the standards include a minimum “elevation” of hight above sea level for the lowest inhabited floor of a home. When purchasing a home, buyers should ask if the seller has a current Elevation Certificate to determine the base level of construction a so they can obtain insurance. Without an EC, insurance will be extremely expensive if obtainable at all.

Some properties, especially those constructed prior to FEMA standards (1975 at this writing) may be “grandfathered”. Check with your insurance agent to be sure. Some people believe that the X zone can never flood. This is wrong. It is only in an area with a low probability. Flood insurance in an X zone will be quite reasonable and affordable and one should consider this when purchasing insurance for their most important investment. If a tropical storm causes water damage, there is a very good chance that insurance companies will consider it flood damage and it will not be covered.

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