Step 37 of 48 Phase 5: Prepare for Closing
5.3 Order Homeowners' Insurance
Your lender requires proof of homeowners insurance before closing. Shop around for the best rates and ensure your coverage meets lender requirements.
What Your Lender Requires
- Dwelling coverage at least equal to loan amount
- Binder or declarations page before closing
- Lender listed as loss payee/mortgagee
- First year premium often paid at closing
- Flood insurance if in a flood zone
Questions to Ask Insurers
- What discounts are available (bundling, security systems, new home)?
- What is the claims process and average response time?
- What is excluded from coverage?
- What is the deductible and how does it affect premiums?
- Do you offer replacement cost or actual cash value?
Pro Tips
- Get quotes from at least 3-5 insurers
- Ask your auto insurer about bundling discounts
- Check insurer ratings on AM Best or J.D. Power
- Review coverage limits carefully - do not underinsure
- Provide the insurance binder to your lender at least a week before closing