Shop for homeowners insurance as soon as your offer is accepted, and have a binder in place for the closing date. Your lender requires proof of coverage.
The Short Answer
Start shopping for homeowners insurance as soon as your offer is accepted, and have a binder in place for your closing date. Your lender requires proof of coverage before funding, and your closing agent will need the policy details.
Timing Your Insurance Purchase
Do not wait until the week of closing to buy insurance. As soon as your offer is accepted, get quotes and choose a policy so your agent can issue a binder well before the closing date.
A binder is temporary proof that coverage is in force, and it satisfies your lender's requirement. Your closing agent will ask for the binder and your insurer's name so the policy can be verified and the premium escrowed with your mortgage.
What Your Lender Needs
Your lender requires that the home be insured for at least the loan amount, and it will escrow the premium into your monthly payment. Confirm the coverage amount meets your lender's requirement and covers the full replacement cost of the home.
Ask your agent to coordinate the effective date with your closing date so coverage begins the day you take ownership. A gap between closing and the policy start date would leave you unprotected on the most important day of the purchase.
Smarty's Advice Expert Insight
John Smart (Smarty) · Smarty Home Solutions / eXp Realty Agent, AI Certified Agent
Buy Insurance the Day Your Offer Is Accepted
Line up your homeowners policy early and have a binder ready for closing. Confirm the effective date matches your closing date so you are covered from day one.
John Smart, AI-Certified Agent with eXp Realty helps buyers across Greater Philadelphia close smoothly. Call 215-598-6848 or schedule a free consultation.