At What Stage Do You Look for Homeowners Insurance?

Homeowners insurance comes in two parts. Liability insurance pays medical bills if someone's injured on your property, and legal costs if he sues you over it. Hazard insurance pays for repairs and replacement if your home or its contents are damaged, for example by fire, wind, theft or a car's striking your house.


Your mortgage lender will require you to take out at least a minimum level of hazard insurance, the Nolo legal website states. Your house is collateral for the loan, so your lender wants to know that if it's damaged, the money is there to rebuild it. You will have to have proof of insurance in hand when you go to the closing, so you need to finish the search before then.

Time Frame

Start learning about homeowners insurance before you even find a house. There are a number of factors that will affect your insurance premiums, the Investopedia website states, including the rate of crime in your area, your home's proximity to fire hydrants and the condition of the plumbing and electrical systems. Knowing what's involved will help you spot situations that might push the price up.


When you find a house that looks promising, you can check its history with a report from the Comprehensive Loss Underwriting Exchange Report. CLUE reports track past claims and even reports of damage that didn't result in claims, MSN Money states, so you can find out about conditions that might result in higher premiums or no insurance at all. Homeowners are entitled to one free report a year, so if the seller doesn't have a recent report, ask her to request one.


If you can't buy homeowners insurance you can't close on the house, and even though it's not your fault, you could pay a penalty for backing out of the contract. Nolo recommends that you protect yourself by including a contingency clause in the contract stating that the sale is conditional on your being able to buy insurance.


When shopping for homeowners insurance, consider whether you'll need to buy extra coverage. If you have valuables such as art, jewelry or collectibles you may need a rider on your policy to cover your collection completely. If the house you're looking at is in a flood plain, CNNMoney states, your lender may require you take out flood insurance as well. And if the house is 20 years old or more, it might be worth paying for an "ordinance" policy that will pay to upgrade the house to current building codes if it's substantially damaged: local governments often make this a condition of rebuilding, and a standard policy won't pay for it.