When to Get Homeowners Insurance When Buying a House

May 2, 2022

Purchasing a home is one of the biggest and most exciting events in many people’s lives. But this major life event comes with so many important steps, it can be easy to forget a few along the way.
In this article, we’re taking a look at when the right time is in this lengthy process to make sure your new home is protected by homeowners insurance, as well as answer a number of frequently asked questions about when to make sure your policy is in place.

How soon before closing should I get homeowners insurance?

Once you’ve signed a contract to purchase your dream home, the next step you should be taking is to start shopping around for a good home insurance policy.

Oftentimes you’ll have about a month before you sign the contract and you close on the house, so this gives you enough time to find a policy that works for you, since it’s up to the buyer to have the house insured between the exchange and completion of the deal.

However, in the event that you are using a mortgage lender, you’ll want to make sure that the policy you’re looking to purchase meets the requirements of the lender.
Having a good personal property insurance policy is important for protection in the event that something should happen to your new property.

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What does homeowners insurance cover?

Having homeowners insurance provides you with coverage to replace or repair your home as well as the property within your home. This affords you and your family peace of mind with the knowledge that whatever happens, you won’t have to pay out of pocket for any damages or replacement costs your property may have suffered.

Home insurance policies can also cover the costs of any legal fees associated with injuries or lawsuits that may be brought against you from any injuries caused by you, your family members or pets, regardless of whether or not you’re at fault.

Additionally, a good property insurance policy can protect you from having to pay any medical costs associated with these potential lawsuits.

What does homeowners insurance not cover?

Homeowners insurance won’t cover a number of things, such as:

  • Certain valuables: Many homeowners insurance policies only cover belongings up to a certain amount, so if you have expensive valuables it can be a good idea to consider additional coverages.
  • Damage from flooding: Any damage that’s caused by a slow leak over time is often not covered by homeowners insurance, so if you’re in an area that suffers from heavy flooding, you should consider flood insurance. Typically, any damage from water that hits the ground before it enters your property is considered not covered by homeowners insurance.
  • Damage from pests: Another type of slow leak of damage, any structural demolition from pests like rats or termites are also not covered under homeowners insurance. Since there’s no such thing as termite insurance, it can be a good idea to set up an annual full house inspection from a reputable pest extermination company.
  • Vacant properties: If you own a property that will be vacant for an unknown period of time, be sure to get vacant property insurance, as homeowners insurance runs out on vacant properties after 30 days.

Other frequently asked questions about homeowners insurance policies:

Q: How long does it take to get a homeowners insurance policy in place?
A: When to get home insurance is an important and often overlooked aspect of purchasing a new home. The good news is that insurance companies like NEXUS can get a quote the same day.  Some companies will require approval before they will insure your home; and may require home inspection before the home is insured.

Q: Can I get homeowners insurance before closing?
A: Yes, the buyer should have homeowners insurance before closing on the property. In fact, some lenders will require you to have the policy in place in the days leading up to the closure of the property.

Q: How much does homeowners insurance cost?
A: Home insurance costs can differ greatly, as they’re dependent on numerous different factors. These factors include things like the location, age, and state of repair of the property. As there can be great difference in costs, it’s important to get quotes to ensure you get the best price possible.

Q: Is homeowners insurance required to purchase a home?
A: While homeowners insurance isn’t a legal requirement to purchase a home, lenders will require proof of insurance before they will fund your loan.
However, even if you’re paying the full purchase price of the home in cash, it’s still a good idea to insure your home, as it can save you from having to pay out of pocket for any damages or lawsuits that may occur, even if it’s no fault of your own.

Q: Am I required to have homeowners insurance once my mortgage is paid off?
A: Once you’ve completed your mortgage payments, your mortgage lender will not require you to continue paying for homeowners insurance. However, it’s still a good idea to have a homeowners insurance policy in place even once you’ve paid off your mortgage, since it can end up protecting you from paying potentially crippling fees yourself.

When it comes to home insurance, companies will offer different liability coverage depending on the individual company and your particular case. Remember to always check with your company to understand what your individual policy does and does not include.

Find out how much a tailored homeowners insurance plan will cost for you with a free quote from NEXUS. Our insurance advisors are ready to answer your questions over web chat or phone.

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