Purchasing homeowners insurance is a normal step in the process of buying a home, and it is actually something you must do if you want to close on the house. Homeowners insurance protects not only you but also your lender, and it is something that you should never go without if you own a house. If you are buying your first home and do not know a lot about homeowners insurance, here are three things you should understand.
You cannot purchase a policy until you know which house you are buying
The first thing to know is that you cannot rush to an insurance company to buy a policy for a house until you select the house you want to buy. To purchase a policy, the insurance company must know a lot of details about the house, as every house will result in different rates. Because of this, you should not call for homeowners insurance until the seller accepts your offer and you are moving towards closing. When you call the insurance company, you should be prepared to tell them all the details about the house that they will need to know. This may include the address, the size, and the year it was built. They are also likely to ask if the home has a fireplace and what the age of the roof is. They will need to know all these things in order to give you a quote for coverage.
You cannot close on your home until you buy a policy
Secondly, to close on the house, you must have proof that you have insurance for the house. If you do not have proof of insurance, your closing will be postponed. This is required by your lender, as homeowners insurance protects your lender's stake in the loan they are issuing to you to make the home purchase. They will give you a document that proves you have insurance once you get a policy and pay the premium for it.
You will have a lot of options for coverage
Finally, you should be prepared to make some decisions when getting your policy. You will need to decide how much coverage to have, what types of coverage to get, and the amount you want for your deductible. There may be additional decisions you must make as well when buying home insurance.
When buying a house, you will need homeowners insurance for it, as this is a requirement. If you already selected a home and are in the process of closing on it, contact a company that sells homeowners insurance to get a policy in place so you can close on the house.