Insurance for homebuyers
Your lender will not fund the loan without evidence of insurance, and the request usually arrives later in the process than buyers expect. This is what to have ready and when.
- Monday – Friday: 6:00 AM – 7:00 PM Pacific Time9:00 AM – 10:00 PM Eastern Time
- Saturday: 6:00 AM – 5:00 PM Pacific Time9:00 AM – 8:00 PM Eastern Time
Homeowners quotes by phone are not available in California, Florida or New York. Send your details on the form below and someone will follow up.
Prefer to send it in writing? Scroll down →Three things buyers get told too late
- 1
The policy has to be in place before closing, not after
A lender requires evidence of insurance effective on or before the closing date, and the first year of premium is commonly collected at closing or escrowed. Title and escrow will ask for it in the final week. Buyers who start shopping then are choosing from whatever is available in three days rather than from the market.
- 2
The lender insures its loan; you insure your house
A lender cares about the dwelling amount and that it is named as mortgagee. It does not care whether your personal property limit is adequate, whether you have water backup coverage, or whether an older house can be rebuilt to current code. Meeting the lender requirement and buying the right policy are two different jobs, and only one of them has a deadline.
- 3
What you can insure is decided by the house, not by you
Roof age, electrical panel, plumbing material, heating source, a pool, a wood stove, the distance to a fire station and the wildfire score on the parcel all decide what a carrier will write and at what price. These are findable during the inspection period, which is the window where you can still do something about them.
When to do what, between an accepted offer and the keys
The dates shift with the deal, but the order does not.
- Offer accepted
Send the address, square footage and year built for a first quote. Nothing is binding, and it tells you early if the property is hard to insure.
- Inspection period
Get the inspection report and pull out the roof age, electrical panel, plumbing material, heating source and water heater age. Raise anything that affects insurability while you can still negotiate it.
- Two to three weeks out
Settle the dwelling limit, deductible, and the endorsements you want — water backup, extended replacement cost, scheduled items.
- One to two weeks out
Bind the policy with an effective date on the closing date, and have the binder or evidence of insurance sent to the lender and to escrow.
- Closing day
Confirm the lender has the binder, the mortgagee clause is correct, and the first premium is paid or escrowed.
- After you move in
Update the auto policy address, photograph every room for a contents inventory, and check that the personal property limit matches what you actually moved in.
How much dwelling coverage a lender asks for, and why it is not the answer
Lenders usually want the dwelling limit to be at least the loan amount, or the replacement cost of the structure. Those are different numbers, and so is the purchase price — because the price includes the land and a rebuild does not. The figure that protects you is what it would cost to rebuild the house with today’s labor and materials. Ask what per-square-foot cost the quote assumes, and ask whether extended replacement cost can sit above it.
The documents to gather while you are still in the inspection period
The inspection report is the best insurance document you will ever get, because it names the roof age, the panel, the plumbing and the heating. A seller disclosure sometimes names past claims. A prior loss history on the property can affect what a carrier will offer. If anything in the report is a problem for insurance — a wood shake roof, a panel brand with a known history, polybutylene plumbing — the repair negotiation is the moment, not the renewal.
Buying home and auto at the same time
Most carriers write home and auto together and apply a multi-policy discount on both when they do. A move is the natural moment for it: the address on the auto policy is changing anyway, and the two renewal dates can be aligned so you are not re-shopping twice a year. If you are renting out your current place or keeping a second vehicle, say so on the same call rather than opening a second one later.
What to have in front of you for a homebuyer quote
Most of this is in the listing and the inspection report.
- Full property address, square footage and year built
- The closing date — this becomes the policy effective date
- Year the roof was last replaced, and the roofing material
- Age of the electrical panel, furnace and water heater
- Plumbing material, and whether any polybutylene remains
- Heating source, including any wood stove or pellet stove
- Whether there is a pool, spa, trampoline or a dog
- Lender name and the mortgagee clause, for the binder
You can bundle home and auto on the same call
Most carriers write home and auto together and apply a multi-policy discount to both when they do. Renters and auto bundle the same way, so you do not have to own the place to get the credit. Ask what the discount comes to on each policy before you decide, and ask to line the two renewal dates up so you review everything once a year instead of twice.
The four questions buyers ask
Every term you will be asked to decide on, in plain language, before you have to decide on it.
Read it →What a binder is, who needs it, and what the mortgagee clause has to say.
Read it →The order of operations between an accepted offer and the keys.
Read it →Ownership decides which policy you need, and architecture misleads people constantly.
Read it →Frequently asked questions
When do I need to have homeowners insurance in place?
Effective on or before the closing date. Lenders ask for evidence of insurance in the final week or two, and the first year of premium is usually collected at closing or escrowed. Starting earlier gives you choices rather than whatever can be bound in three days.
Is homeowners insurance required by law?
No state requires it. Mortgage lenders almost always do, as a condition of the loan, and will specify a minimum dwelling amount. If you own the house outright the choice is yours.
How much coverage does my lender require?
Typically the loan amount or the replacement cost of the structure, whichever its guidelines specify. That is a floor for the lender rather than the right answer for you, since a rebuild has to be funded with current labor and material costs.
Can I get a quote before my offer is accepted?
Yes, and it is worth doing on any property you are serious about. A quote on the address tells you early whether the house is straightforward to insure, which is information you want before you waive an inspection contingency.
Should I buy home and auto from the same carrier?
Most carriers discount both policies when they are written together, and a move is the natural moment to do it since the auto address is changing anyway. Worth pricing both ways on the same call.
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