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Is Buying Homeowners Insurance Before Closing Required?

Find out whether homeowners insurance is necessary. Learn how to pick the right homeowners insurance company for your situation. Find an agent to negotiate on your behalf, so you get the best price on your real estate.
Find out whether homeowners insurance is necessary. Learn how to pick the right homeowners insurance company for your situation. Find an agent to negotiate on your behalf, so you get the best price on your real estate.

The home buying process can overwhelm first-time home buyers. You may feel as if you are back in tenth-grade English learning a bunch of vocabulary words that are unfamiliar to you.

Back then, you learned about onomatopoeia. Now you learn about private mortgage insurance.

As a sophomore, you learned about alliteration. As a first-time home buyer, you learn about real estate transfer fees.

Chances are, you don’t use the words onomatopoeia or alliteration in your current daily lives, but not knowing about real estate vocabulary can cost you time and money.

One thing you as a first-time home buyer may not understand is that you need to purchase homeowners insurance before going to your appointment to close on your house. If you don’t have homeowners insurance before this appointment, you will delay your closing and ability to move into your new home.

Are there any tricks to avoid buying homeowners insurance before closing? Yes! If you purchase your new home with cash, you do not have to have insurance before moving into it.

This only makes sense. Your mortgage institution owns your home. What if during the first night at your new home a tornado hits it and destroys the home? If you don’t have homeowners insurance, not only are you in a world of hurt, but your mortgage company is too. They will no longer have a house to sell to earn back the money you borrowed.

Purchasing homeowners insurance will protect you and your lender. That’s why it is required.

How do you pick out a homeowners insurance company? It is a bad idea to give the business to your shiftless brother-in-law who sells insurance on the side for some shady company. Not all insurance companies are equal.

Tips for Finding a Good Homeowner’s Insurance Company

Great Customer Service

A good insurance company has excellent customer service. If you fill out a contact form on the website, an agent should contact you almost to discuss your insurance needs. This agent will be from a local office and can meet with you to talk about your different options.

Many Coverage Options

A good insurance company has several coverage options. If you would like to save on your monthly insurance costs, you can raise your deductible. Some companies may offer separate deductibles depending upon the claim.

Bundled Coverage

A good insurance company will allow you to bundle coverage. Chances are, you also have auto insurance on your cars. Check with your homeowner’s insurance agent to see if you can get a cheaper rate for both if you purchase from the same company.

Detailed Coverage

A good insurance company will not necessarily be the cheapest. When disaster hits, you want to be insured by a company that provides you with a pod to store your belongings in while you rebuild. You want to be protected by the company that shows up immediately after you call.

Homeowners are at their most vulnerable when disaster hits. You want to work with a company that has your back and provides excellent customer care.

Although you don’t need an extra thing on your plate when purchasing a new home, take time when picking out an insurance company.

Also, take care when picking out a buyer’s agent who will negotiate on your behalf. Your buyer’s agent is not just the person who opens up locked doors and reads information off a website regarding how many bathrooms a home has. A buyer’s agent is the person who knows how much to push the homeowner to get the best price on a piece of property.

If you work with a Clever Partner Agent, not only will you receive excellent service, but you also may qualify for a home buyer’s rebate. You can use this $1,000 (or 1% on homes more than $500,000) to help make your first-year’s homeowner’s insurance premium. You may even get a discount for paying ahead of time, and you will lower the amount of your monthly mortgage payment.

Let your Clever Partner Agent help you find the perfect home for you and your family today.


Reuven Shechter

Reuven Shechter is the Outreach Coordinator at Clever Real Estate, the free online service that connects you with top real estate agents to help save on commission. He spreads the word about Clever, disseminating studies to journalists and developing relationships with media outlets. Reuven is passionate about investing in real estate and creating lasting success for families. His writing has been featured in Max Real Estate Exposure, Leverage Marketing, and more.

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