Buying a home is exciting, but before you can move in, there’s one important step: home insurance. Many buyers ask, “Do I need insurance before closing?” The answer is yes—and here’s why.
Why Do You Need Home Insurance Before Closing?
If you’re getting a mortgage, your lender requires home insurance before they approve your loan. This protects their investment—and yours—if something happens to the home. Even if you’re buying with cash, having insurance is still a smart move to avoid major financial risks.
When Should You Buy Home Insurance?
The best time to start shopping for home insurance is after signing the Purchase and Sale (P&S) agreement and scheduling your home inspection.
Why?
✔️ You’ll have time to compare policies and prices.
✔️ The home inspection might reveal issues that impact coverage.
✔️ Your lender needs proof of insurance before closing.
Waiting until the last minute can lead to rushed decisions or delays in closing.
How Much Does Home Insurance Cost?
Home insurance costs depend on factors like location, home size, and coverage limits. On average:
🏡 National average: $1,000 – $2,500 per year
📍 Low-risk areas: Around $800 – $1,200 per year
⚠️ High-risk areas (floods, hurricanes, wildfires): $2,500+ per year
Your premium will also depend on your deductible, the home’s age, and safety features. The best way to find the right price? Compare quotes from multiple insurers.
What Should Your Policy Cover?
Not all policies are the same. Make sure yours includes:
- Full replacement cost – Covers rebuilding your home if it’s destroyed.
- Personal property coverage – Protects your furniture, electronics, and belongings.
- Liability protection – Covers accidents or injuries on your property.
- Temporary housing coverage – Pays for a place to stay if your home is unlivable.
- Extra protection – Floods, earthquakes, and some disasters require additional coverage.
How to Save on Home Insurance
Want the best rate? Try these tips:
✅ Bundle policies – Combine home and auto insurance for discounts.
✅ Raise your deductible – A higher deductible means lower monthly payments.
✅ Improve security – Alarms and safety features can lower your premium.
✅ Shop around – Compare quotes to find the best deal.
Final Thoughts
Home insurance isn’t just required—it’s essential. Protect your investment and your future by getting coverage early in the home-buying process.
Need help finding the right policy? The team at Vargas & Vargas can be reached at 617-298-0655.
