Flipper not disclosing C.L.U.E insurance report claims

[dwfritz23]

Hello, I am currently in escrow. The house was purchased by a fixer-upper investor 3 months ago and after renovating the house he accepted my offer. last week The disclosures list specifically says that NO claims have been filed in this property. When calling for home insurance, the CLUE report came back with 3 claims (1 water damage unpaid, 1 water damage paid 8k, and 1 fire paid 2k). The seller says they don't have any information as the previous owner did not disclose them either (apparently it was a "for sale by owner" transaction where there were no statutory disclosures). My inspector did not find any major issues (besides some wood floor swollen from water damage) Can the investor (current owner) just say they did not know and get away with it? what happens if I buy the house and find issues related to these claims that were technically undisclosed in the future? Is there a way to know more details of these claims? what do you recommend I do here? is this a bad deal? PLEASE HELP! I'm so anxious. Thank you!

 

[jriz]

@dwfritz23 Maybe I'm missing something, but what's the insurance question here other than that the information in question came from an insurance report? This seems more suited to a real estate sub? Flipper sub? maybe legal advice? I am not sure where, but we answer insurance questions here.

So at the risk of being unwelcoming: What's the insurance question we can help you with?

 

[dwfritz23]

@jriz Hi, one of r/insurance mods saw my post in r/homeowners and recommended I posted it here in case someone might have some input. Maybe my question here would be if there is a way I can get more information on the CLUE claims besides the "water damage - paid" information I got. Thank you!

 

[unity13]

@dwfritz23 Clue is pretty basic. You'll only have a date, payment amount, and type of loss. There isn't a way to get more detail unless you can contact the original homeowner that filed the claims.

The only other thing you can do is try to establish the date of purchase by the flipper to really see if they filed any of those claims or if it was all the prior owner.

 

[littleislandgirl]

@unity13 If you look up the county property record or register of deeds you might be able to find when the flipper bought it.

Also, the CLUE report should show the information for the company that paid the claims out. They MAY not talk to you but it might be worth a shot to call them (or have the flipper call them).

 

[jriz]

@dwfritz23 Ah! Ok. If the flipper only owned it three months, and the prior owner did not disclose claims, and the claims did not happen during the ownership of the flipper, then i am not sure if they would have known. This is especially true when the flipper paid cash for the property.

If they did not pay cash and they are financing it, then they knew because they had to get insurance on it.

 

[armstrongwannabe]

@dwfritz23 Flippers tend to get their houses by the cheapest means possible. Usually this means auctions, bankruptcy, foreclosures, etc. If that's how they acquired the property 3 months ago, then it's entirely possible that they didn't know about the previous claim activity.

Commercial insurance, which I assume the flipper has, likely wouldn't check a personal lines CLUE report for claims, so they probably wouldn't notify the flipper of pervious claims activity.

I think that you have a few options here:

1. Use this new information to potentially negotiate a lower price on the house.
2. Request a certificate of insurance from the flipper. You can keep this on file somewhere just in case anything does go wrong.