Buying a house is an exciting life event. Many people spend hours on the computer searching for the perfect home. Once they narrow things down on the computer, they spend even more time driving around town looking for the perfect place to settle down. With all that time spent looking for a great house to buy, people often overlook some important details. One detail is homeowners insurance.
Homeowners insurance is property insurance. It protects against losses to the value of a home due to damage caused by things like broken pipes or fire. It can also cover loss of personal items in the house. Homeowners insurance is also liability insurance, a type of insurance that protects against financial loss due to someone being injured while on your property. Homeowners insurance is as important to your overall home buying plan as getting a home inspection and setting up financing. In fact, if you are buying your home with a loan, not having homeowners insurance will actually prevent the closing of the sale.
Homeowners Insurance And Closing On A House
When a lender agrees to loan you money to purchase a house, they want certain guarantees that their investment in the house will be protected. This is why they do a credit check on buyers. They want to lessen the chance loan defaults. Another way they protect their investment is requiring that a homeowners insurance policy be in effect before escrow closes and you take possession of the property. Why? Because, for all they know, you could move in tomorrow, an electrical short could burn the house down, and their investment is up in smoke! They want to be protected from this type of loss. So they require homeowners insurance. Homeowners insurance benefits you and the lender.
Make An Offer, Call Your Insurance Agent
As a professional real estate consultant, Bob Canning at RexburgLiving.com has some advice for home buyers. “After the excitement of having your offer accepted by the sellers has passed, make a call as soon as possible and chat with your insurance agent about the property. Give them the address and and get a quote in place. Doing this will make things easier at your closing and you won’t have to make hurried decisions about what type of coverage to get at the last minute.”
Bob Canning is an agent at the Real Estate Office in Rexburg ID. He offers free online home valuations and home search tools.