[Paula M]

First Time Homebuyer: When do I purchase Homeowners/Flood Insurance?

[svetlana p]

I start it the day before we actually close on the house and get the keys.
You should set up the insurances at least one month prior to purchase.
Just the the ins company which day you want everything to start.
Just because you call on a certain day, does not mean the insurance has to start on that day.
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[ben]

If you have a mortgage the mortgage company will require that the policy be in place prior to closing. You'll want to contact the insurance company to get the policy in place as soon as you know that the purchase will go through. The mortgage company will also tell you if you need flood insurance or not.

[jimmyws62]

Well, it doesn't have to be in effect until the day you close on the house, HOWEVER. You probably want to visit your agent several weeks in advance. You want to allow plenty of time for shopping around, and you need to allow time in case you have a harder time finding insurance for your house, than you thought you would.

The insurance company would be HAPPY to write the policy now, and not make it go into effect, until the closing date. If something happens and the deal doesn't go through, you can cancel the policy 'flat' and get all your money back.

[James R]

Good question! There is always so much to do and often this is left to near the end.

Once you make the decision to purchase the home you will be setting up mortgage papers and will hire a lawyer to transfer title. At this point the lawyer will need proof of fire insurance to complete their paperwork and get the title registered. Some people will buy Title protection insurance to prevent someone from stealing their title on the property at this time. This can be done through the lawyer or through the insurance broker. It is a one-time purchase and something you should consider carefully.

To get the insurance set up you will need to provide quite a bit of information to a broker or agent. If you do not have a current policy then you will need to complete the application process and set up a payment plan. It is a good idea to check around for brokers or agents who have quite a few markets as prices vary from company to company. Online is another option and you should explore it during your decision-making.

There are so many variables for home insurance that you need to take a bit of time to try and find the package that will best suit your needs. This time spent now will be well worth it in the long run and if you ever have a claim you won't face a rather unpleasant surprise.

Not all insurance companies will offer flood insurance. Some companies will limit sewer backup coverage in certain areas prone to this type of claim. Again, ask your questions about what is not covered.

Once the policy is set up then your agent or broker will send a binder or cover note to the lawyer's office confirming that insurance is in place. After you receive your policy documents it will be a once a year process for renewal.

Do consider doing an inventory of your contents during this move. Even a video or pictures of the house showing contents including in the cupboards and drawers will be very helpful if you ever have a claim to process.

You might look at the options offered for life insurance vs mortgage insurance. There can be quite a difference at the time of a claim.

Congratulations on the purchase of your home. I hope your weather is good for moving day!