Homeowners Insurance When Buying or Selling Real Estate

Did you know that when buying a home you should have your homeowners insurance coverage begin AT LEAST the day before closing? The last thing a Buyer wants is to be signing to buy a home without homeowners insurance coverage. What if the home burned down while you were at the title company closing? A scary thought, and rare I know, but it has happened. Did you know that when selling a home you should keep your homeowners insurance in place until AT LEAST a day after closing AND FUNDING. It sometimes takes a day (or longer) for the Buyer's loan to fund after all of the paperwork has been signed... and ownership/title does not transfer until then. The last thing a Seller wants is to be signing to sell their home without homeowners insurance coverage. What if the home you were selling was vandalized as you were leaving the title company from your closing? Even after you've signed the paperwork, you still own (and are responsible for) the home until the Buyer's loan funds (and that may be the next day, or longer). Long story short, whether buying or selling, you want an extra day or two of insurance coverage. It will only cost a few dollars but could save you hundreds of thousands. Ideally, good real estate agents would like the Buyer and Seller to have overlapping insurance coverage so that, should something happen to the home during the "grey area" of property ownership/title transfer, the two insurance companies can argue over who's going to pay for it (instead of trying to pin the costs on the Buyer or Seller).

Important note: Most insurance companies require you to notify them if your home becomes vacant (i.e. you move out to head to your new home). It's usually in your policy if you read the fine print (or ask your agent). Without notifying them that you have moved out (and obtaining what some call a "vacancy rider") you run the risk that they could deny claims on your home and leave you, in essence, without coverage.

I'm happy to help answer any general questions about closing, funding, insurance, etc. For any insurance questions specific to your policy, it's best to check with your insurance agent.

Ryan Cave, The "Caveman"
Truth, Honor & Personal Integrity
214-789-9366
www.CaveRealty.com