Purchasing Home Owners Insurance During the Home Buying Process
Posted by Beckerman & Company on
Typically, home buying is a multi-step process. One of those steps is purchasing homeowners insurance in a timely manner to bring evidence of insurance to the closing table. Since the purchase of home insurance occurs at the end of the home buying process, it can be handled as an afterthought which results in home buyers not being prepared to obtain a homeowners quote. As an insurance agency assisting homeowners purchase insurance since 1986, Beckerman & Company knows the ins and outs of purchasing homeowners insurance in a timely manner and is willing to share the knowledge with you.
To start the process, give the insurance agent a two week lead time. This serves two purposes. First, it allows enough time for the policy buyer to collect all of the information they need to get an accurate quote. Secondly, it gives the insurance agent enough time to shop different carriers to find the most competitive quote as well as enough time to present and fully explain all options to the policy buyer.
Have all pertinent information on hand when you call the agent. You will need to know the details regarding the home’s condition. Typical questions will include the year it was built, construction type, and when the roof, electrical, plumbing, and heating etc. was last updated. You can obtain this information from the property disclosure form, if the seller completed it, or have your agent obtain this information from the selling agent. It will be impossible to get a quote without this information.
Besides the structural integrity of the home, insurance agents need to know the dimensions of decks, patios and the square feet of the entire home. The agent will also ask if the home has a pool, a trampoline and other toys the kids find fun, but pose real risks for the homeowner. Having all of these items handy on the first call will make getting the quote very simple.
Finally, there are things that insurance agents and policies cannot do. We cannot bind policies with an open date. We realize that sometimes a closing date gets pushed back for various reasons. However, insurance policies have a definitive effective date and, once bound, the dates can not be changed. The best bet is to get the quote two weeks before closing, but have the agent hold off on actually binding the policy until the closing date is confirmed. Once the policy is quoted, your agent should only need a two day lead time to bind and produce a certificate of insurance for the closing. Just be aware that the agent will need a check for the premium and applications signed so be prepared to provide these items when you call to give the okay to bind.
We cannot bind a policy without the premium. Just as your real estate transaction is based on a promise for a promise (i.e. you promise to pay the sale price –or obtain financing- and the seller promises to sell the house to you) an insurance contract is the same situation. The insurance company is promising to indemnify you should a covered loss occur, and you promise to pay the premium. The premium payment is your fulfilment to the contract and is necessary to bind.
While this blog covers the basic challenges homeowners face when purchasing home insurance, we realize there are many questions a policy purchaser may have. Feel free to call Beckerman & Company at any time. We are here and happy to answer any questions you may have.