Buying a Home Insurance Checklist
Buying a home is likely the biggest purchase you’ll make. Proper insurance protects your investment, satisfies your lender’s requirements, and gives you peace of mind. Use this checklist to ensure you have the right coverage before and after closing.
Before You Start House Hunting
Understanding insurance costs early helps you budget accurately and avoid surprises.
Research Insurance Costs for Target Areas
- Check average homeowners insurance rates in your target neighborhoods
- Research flood zone designations for areas you’re considering (use FEMA Flood Maps (opens in new tab) )
- Understand if the area has higher rates due to wildfire, hurricane, or tornado risk
- Factor insurance costs into your monthly housing budget
Understand What Lenders Require
- Homeowners insurance - Required by all mortgage lenders
- Flood insurance - Required if in a FEMA flood zone
- PMI (Private Mortgage Insurance) - Required if down payment is less than 20%
- Title insurance - Lender’s policy required; owner’s policy recommended
Related: Homeowners Insurance Guide
After Your Offer Is Accepted (2-4 Weeks Before Closing)
Once you’re under contract, it’s time to secure coverage.
Shop for Homeowners Insurance
- Get quotes from at least 3-5 insurers
- Verify the dwelling coverage equals full replacement cost (not purchase price)
- Check contents coverage is adequate (typically 50-70% of dwelling)
- Review liability limits ($300,000 minimum recommended; $500,000 if you have assets)
- Understand your deductible options and how they affect premiums
- Ask about discounts:
- Multi-policy bundle (auto + home)
- Security system/smart home
- New construction/recent updates
- Claims-free history
- Loyalty/longevity
Understand What’s NOT Covered
Standard homeowners policies typically exclude:
- Flood damage - Requires separate flood insurance
- Earthquake damage - Requires separate earthquake coverage
- Sewer backup - Often requires endorsement
- Maintenance issues - Wear and tear, mold, pest damage
- High-value items - Jewelry, art may need scheduled coverage
Get Title Insurance
- Lender’s title insurance - Protects the lender; required
- Owner’s title insurance - Protects you; optional but recommended
- One-time premium paid at closing
- Protects against liens, ownership disputes, clerical errors
- Coverage lasts as long as you own the home
Assess Additional Coverage Needs
- Check if property is in a flood zone → flood insurance
- Check if region has earthquake risk → earthquake coverage
- Consider umbrella policy if you have significant assets
- Review sewer backup endorsement (especially for older homes)
Related: Umbrella Insurance
1-2 Weeks Before Closing
Finalize coverage and prepare documentation.
Bind Your Homeowners Policy
- Select your policy and pay premium (or arrange escrow payment)
- Confirm coverage start date matches your closing date
- Get your declarations page (proof of insurance)
- Provide insurance information to your lender and title company
Required Information for Your Lender
Your insurance agent will need:
- Property address
- Closing date
- Lender name and loan number
- Mortgage amount
- Lender’s mailing address (for policy copy)
Understand PMI (If Applicable)
If your down payment is less than 20%:
- Know your PMI amount (typically 0.5-1% of loan annually)
- Understand when PMI can be removed (usually at 20% equity)
- Ask about lender-paid PMI options (higher rate, no separate PMI payment)
After Closing
Your home is now yours—but your insurance responsibilities continue.
First 30 Days
- Review your policy documents carefully
- Create a home inventory (photograph belongings, keep receipts)
- Store important documents safely (policy, deed, title insurance)
- Set up automatic payments to avoid lapses
Review Life Insurance
Buying a home often means reviewing life insurance:
- Calculate coverage needed to pay off mortgage plus living expenses
- Consider term life insurance matching your mortgage length
- Update beneficiaries if needed
Related: Life Insurance Guide | Term Life Insurance
Annual Review
- Review coverage annually as home values change
- Update coverage after major renovations
- Shop for competitive rates every 2-3 years
- Adjust coverage as mortgage balance decreases
Cost Overview
| Insurance Type | Typical Cost | When Required |
|---|---|---|
| Homeowners | $1,500-3,000/year | Always (lender requirement) |
| Flood | $700-2,500/year | In flood zones |
| PMI | 0.5-1% of loan/year | Down payment < 20% |
| Title (Owner’s) | $500-3,500 one-time | Recommended |
| Umbrella | $200-400/year | Optional but recommended |
Costs vary significantly by location, home value, and coverage levels.
Frequently Asked Questions
Frequently Asked Questions
When should I get homeowners insurance when buying a house?
Get homeowners insurance before closing—your mortgage lender will require proof of coverage. Start shopping 2-3 weeks before closing to compare quotes and ensure coverage begins on your closing date. The policy must be paid in full or the first year’s premium escrowed.
Is title insurance required when buying a home?
Lender’s title insurance is typically required by mortgage companies to protect their investment. Owner’s title insurance is optional but strongly recommended—it protects you from ownership disputes, liens, and defects in the title that could cost thousands to resolve.
Do I need flood insurance for my new home?
Standard homeowners insurance doesn’t cover flood damage. If your home is in a FEMA-designated flood zone, your lender will require flood insurance. Even outside flood zones, consider it—25% of flood claims come from moderate-to-low risk areas. Flood insurance has a 30-day waiting period.
What's the difference between PMI and homeowners insurance?
PMI (Private Mortgage Insurance) protects your lender if you default on your loan—it’s required with less than 20% down payment. Homeowners insurance protects you and your property from damage, theft, and liability. Both are often required but serve completely different purposes.
How much homeowners insurance do I need?
Insure for the dwelling replacement cost—what it would cost to rebuild your home, not the purchase price or market value. Your policy should cover full reconstruction costs including materials and labor at current prices. Also ensure adequate contents coverage (typically 50-70% of dwelling coverage).
Should I increase life insurance when buying a home?
Yes, review your life insurance when taking on a mortgage. Ensure your coverage would pay off the mortgage and cover family living expenses if you died. A 30-year mortgage means 30 years of payments your family would still owe. Term life matching your mortgage length is often the most affordable option.
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Related Resources
- Homeowners Insurance Guide
- Flood Insurance
- Life Insurance Guide
- Umbrella Insurance
- Insurance Costs Quick Reference
Need help understanding your homeowners insurance options? Use our Coverage Quiz for personalized recommendations.
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