"(The problem) might have been remedied, but if there was a problem, you may have to disclose it," says Mike Donohoe, president of the Santa Clara County Association of Realtors in San Jose, CA.

A home with many insurance claims or repairs that could indicate the need to file claims later, may affect its salability and as a result its value. Even if there is no disclosure about insurance claims or conditions that could spark them, potential buyers should ask the seller directly about any insurance issues. Buyers should also consider property inspections to discover potential problems.

"Property inspections can help prevent possible conditions that could lead to water-related claims and they can identify any active problems. Significant water damage or active water leaks can be identified by a competent inspector. This is why general home inspections are not only desirable prior to purchase but are a good idea on a periodic basis -- maybe every three to five years," said John H. Kunz, of John Kunz & Associates in Hollister, CA.

When a customer files an insurance claim or inquires about filing a claim, it gets reported to the CLUE database. Insurers use the database to decide whether to issue a new policy, renew or raise rates.

California state law, and perhaps others, prevents insurers from using CLUE inquires alone in adverse underwriting decisions, but the reports can tell a potential buyer what to expect when attempting to insure a specific home.

Only the homeowner can obtain the CLUE report, but buyers have the option of making a home sale contingent upon receiving a copy of the CLUE report from the seller and accepting the results.

"CLUE is full disclosure and something that consumers should demand. We recommend it as part of transactions. It's not a statute, but real estate agents are requesting it," said Peter Moraga, a spokesman for the Insurance Information Network of California.

"Generally, most insurance agents I have talked to about this topic have indicated that it is a good idea, if the water-related claim is small, not to submit it due to the CLUE report and the potential hurdles it can create down the road," said Kunz.

"I think that the insurance industry should soften their position a little with regards to this CLUE report. With a competent water damage restoration, air sampling before and after (mold testing), I feel their risks are lower," he added.