When to Start Shopping for Home Insurance
The experts at Perch offer some pro tips on making sure you find the right policy, at the right time.
When should homebuyers look for home insurance?After you’ve successfully purchased a home, you should start shopping around and take a look at different insurance policies. Be sure to start this process before closing, as it is up to you as the buyer to have the property insured before your closing date. It’s advised to start shopping for a policy at least 30 days before your closing date. This will give you enough time to compare quotes, ask questions and gather all the relevant information needed to get a quote. Some lenders require you to have a home insurance policy in place in the days leading up to your closing day.
If you are using a mortgage lender to fund your mortgage, check to make sure the insurance policy you’re looking at meets the requirements of your lender — while home insurance isn’t required by the province, most lenders require you have home insurance with certain coverages in place. You can purchase insurance once you have determined that your policy meets your lender’s requirements and your specific needs. Your insurance company can usually email or fax your proof of insurance to the necessary parties before your closing date.
Why is it important to have home insurance?Having home insurance is crucial as it helps protect your home and belongings in unexpected events. Home insurance provides you with coverage to repair or replace your home and your belongings so you don’t have to pay out of pocket for any damages. Home insurance can also cover legal fees associated with any lawsuits that could be brought against you from injuries sustained on your property by you, your family members or pets, regardless of whether or not you are at fault. Some insurance policies can also protect you from medical costs that are associated with these potential lawsuits and can also include coverage for additional living expenses in the event that you are temporarily unable to live in your home due to an insured loss.
When you’re covered with Onlia, your policy documents clearly outline your coverage — so you know exactly what you’re paying for, and how you’re protected.
Is mortgage insurance and home insurance the same thing?No, they are not the same. Mortgage insurance is mandatory when a borrower puts less than 20% down payment on their property purchase. This type of insurance protects the lender in the case that the borrower can no longer make mortgage payments or goes into default. Home insurance will protect the homeowner, their property and their belongings.
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How long does it typically take to get home insurance?It depends on the provider you’ve chosen. With a direct insurer like Onlia, you can get insured as soon as the next day — get a quote online, customize your coverage, and access your policy on the start date you’ve chosen.
If you opt to work with a broker or more traditional insurance company where you need to speak to someone to get your policy in order and activated, you’ll need to connect with them during their business hours to complete your purchase.
What information do I need to provide to get a quote?
Insurance companies will require some details about your home before they can provide you with a quote. Some information you’ll need on hand includes:
- When your home was built
- If there have been any claims on the house
- When the last time the roof was repaired or replaced
- What types of wiring, heating and plumping are in the house and when they were last updated
What does the mortgage lender or real estate lawyer require as proof of insurance?
Home insurance is not mandatory by law but most mortgage lenders will want proof of home insurance before they grant you a mortgage. Otherwise, if your property was damaged in an accident, they would have no collateral if you default on your loan. You will need a certificate or proof of insurance, which is a document that shows your lender or lawyer that you have an insurance policy in place and will provide information such as:
- Insurer details
- Policy numbers
- Policy effective dates
- Limits of coverage
- Names of insureds
What happens if you don't get insurance in time?
It’s advised to purchase home insurance before closing in order to protect your new investment. Most mortgage lenders won’t fund a mortgage without home insurance before closing. If you don’t have home insurance in place by the time your closing date comes around, your home (and its contents) will be left vulnerable and without protection.
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