Talking With Insurance Companies

During the home-buying process, you will be required to do a lot of things and complete a lot of steps, and your lender or real estate agent will instruct you as to what you must do. One of the things on your list will be to purchase a homeowner's insurance policy for the house you are buying, and here are three things to understand about home insurance when buying a house.

Why you need it

Buying homeowner's insurance before you close on a house is not optional unless you are paying cash for the house. Even then, you should still consider buying homeowner's insurance. This type of insurance protects your house against things such as fire, lightning, hail, storms, and plumbing issues. If anything harms your home that is covered under your policy, you can file a claim. Your insurance company would then have to help pay for the costs of the repairs.

You need this type of insurance not only for your own protection but also to protect your lender. Your lender is issuing you a loan to buy this house, and your lender will want to be protected as well, and requiring that you buy home insurance is the way lenders do this.

How to buy home insurance

To buy a homeowner's insurance policy, you will need to be in the process of closing on the house you selected. You will then need to submit all the details of the house to the insurance company, and this includes the address, purchase price, and amount of insurance you would like. They will then issue you a quote for the coverage. The policy will not begin until you pay the necessary premiums for the policy. Once you do this, you will have coverage, and the insurance company will send you a letter that proves you have coverage.

What happens after that

After you buy your initial policy, you can roll the insurance into your loan by escrowing it. This means that every month you will pay a small amount of the insurance bill to your lender. Your lender will save this money in an account for you and will pay your next homeowner's bill when it is due.

If you want to avoid delays in your closing, you should make sure you purchase home insurance for the house you are buying, and you can do so by contacting a home insurance company of your choice.