The Needle
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A Smooth Closing

Don’t let homeowner’s insurance go awry during the contract-to-closing process.

Charles Celesia Compass

If you’re selling, you might think homeowner’s insurance isn’t your problem anymore because it’s on the buyer to get their new home insured. But that’s not entirely the case. All parts of a real estate deal interlock like cogs to get the whole thing moving. Throw a major wrench anywhere in the process and everything can come grinding to a halt. The insurance agent is often the last person to get called in, even though insurance is one of the more vital parts of the deal.

It’s not as simple as it used to be. In days past, you could call insurance agents on closing day to sign a new policy. Now, a myriad of outside factors create delays for reasons like timing, expenses, deductibles, and Acts of God. If a hurricane is in certain proximity of the state, for example, insurance companies suspend underwriting policies. Anyone who hadn’t already secured insurance before Hurricane Irma had to wait, which led to subsequent delays in closing dates.

People coming in and out of the state insurance pool also affect the timeline on getting a new policy. What about flood insurance - does the property need it? What if the property doesn’t qualify for insurance? What if it’s more expensive than a buyer anticipated? The price paid for home insurance varies wildly, even on the same block. A property built in 2015 will be significantly cheaper to insure than one built in 1964, for example, because of changes to county building codes.

Sellers and their agents may be proactive about helping the buyer get a reputable, qualified insurance agent on board as soon as the house goes under contract. They can work together with the buyer and their agent to get quotes rolling. Getting a contract on a property doesn’t mean the deal is done. Bring everyone necessary into the process early to ensure everything moves toward closing like a well-oiled machine. Or as close to one as possible.

Jared Klein