What Insurance Documents are Needed at a Home Closing?

​Home insurance is a critical and required piece of home purchases if you're securing a mortgage loan.  A number of insurance requirements and documents may be needed for a successful closing, including the following:

Homeowners Insurance: Homeowners insurance is a requirement for mortgage lenders. It protects your home and personal belongings from damage or loss due to events such as fire, theft, or natural disasters. You will need to provide proof of insurance to your lender before closing on the home.

Hazard Insurance: This covers events such as fires, earthquakes, and other natural disasters. Depending on your home's location, lenders may require additional coverage for certain hazards in specific regions.

Flood Insurance: Flood damage is not typically covered by standard homeowners insurance policies.  Your insurance agent may recommend and your lender may require you to purchase separate flood insurance if you live in a high-risk area.

Insurance Binder: An insurance binder is a temporary insurance policy that provides coverage for a specific period of time, usually until a permanent policy can be put in place. Your lender may require you to provide an insurance binder before closing on the home.

Insurance Declarations Page: An insurance declarations page is a summary of your insurance policy that includes the coverage limits, deductibles, and policy dates. Your lender will need a copy of this document to verify that you have the required insurance coverage.

Proof of Insurance: Your lender will need proof of insurance, such as a copy of your insurance policy or insurance binder, before closing on the home. This is to ensure that you have the necessary insurance coverage in place to protect the home and your investment.

Home Inspection Report: Often required by lenders, it will detail any potential issues or concerns with the home. This report may suggest additional insurance coverage to protect against potential losses.

Working with an expert insurance agent well ahead of closing will help you work through any insurance issues that might arise prior to closing.  This will ensure you have the right insurance coverage and documents so closing takes place on time and goes smoothly.