Home Owners Insurance

If you are using a lender to finance your next home purchase you probably have a long check list of things to do before you sign the final paperwork and pick up your keys. One important, but often forgotten task is obtaining an insurance quote to verify the home's insurability.

Why it's important:

When you are not using cash to make your purchase a lender instead is taking the financial risk to lend you the money. If something happens to the property they want to make sure you can cover their investment with an insurance payout. Just like when you buy a car with financing you can not close on the property until you show proof of insurance.

Where most buyers run into a problem is when they find out that the home is un-insurable. This most commonly occurs for two reasons: 1. The property has had a significant amount of paid claims against it previously or 2. The buyer themselves is un-insurable.

In Arizona forgetting to verify insurability of a property can catch up with a buyer in one primarily negative way. This happens when they do not find out this material fact until after their initial inspection period has lapsed and since they have to break the contract they will lose their earnest deposit to the sellers (which most often is at least 1% of the purchase price).

Buyers beware, and take the simple steps to verify insurability of your next home purchase immediately after the contract has been accepted to prevent any potential loss of your earnest deposit.