New Homeowner Insurance Checklist: What to Buy Before Closing

Your lender won't fund your mortgage without proof of homeowners insurance.It's a closing requirement. Here's everything you need — in order.

✅ The Essential Checklist

1. Homeowners Insurance (Required)

• Dwelling coverage: Replacement cost of rebuilding your home
• Personal property: 50-70% of dwelling coverage (choose replacement cost, not ACV)
• Liability: $300,000 minimum (consider $500K if you have assets)
• Loss of use: 20-30% of dwelling coverage (included automatically)
• Deductible: $1,000 is the sweet spot for most new homeowners
• When: Shop 30-45 days before closing. Bind at least 7 days before.

2. Flood Insurance (If Applicable)

• Required if: Home is in FEMA flood zone A or V
• Recommended if: Home is near water, in a low-lying area, or has a basement
• Warning: NFIP policies have a 30-day waiting period — buy EARLY
• Cost: $700-$1,500/year average through NFIP. Private flood may be cheaper.

3. Umbrella Policy (Recommended)

• What it does: Extra liability coverage above your home and auto limits
• How much: $1 million umbrella costs just $200-$400/year
• Who needs it: Anyone with assets to protect (which includes your new home)

4. Auto Insurance Bundle (Recommended)

• Bundle auto + home with the same carrier: save 10-25% on home, 5-15% on auto
• An independent agent can check if bundling beats separate best rates

⚡ Add These Endorsements

• Sewer/drain backup: $50-$100/year. Covers basement flooding from backed-up drains. Standard policies exclude this.
• Scheduled personal property: For jewelry, art, and valuables over $2,500. Covers full value with no deductible.
• Service line coverage: $25-$50/year. Covers underground pipes and wires from your home to the street.
• Equipment breakdown: Covers HVAC, water heater, and appliance failures beyond normal wear.

❌ 5 Mistakes First-Time Buyers Make

1. Insuring for market value instead of replacement cost: Rebuild cost ≠ purchase price
2. Choosing the lowest premium without comparing coverage: A $200 cheaper policy may have $10,000 less coverage
3. Skipping flood insurance: "It's never flooded here" — until it does. 25% of claims are outside flood zones.
4. Not reviewing deductibles: Percentage deductibles for wind/hail can mean $5,000-$20,000 out of pocket
5. Waiting too long to shop: Last-minute shopping = accepting whatever's available, not what's best

Bottom line: Start shopping 30-45 days before closing. Compare quotes from multiple carriers (an independent agent shops 50+ for you). Choose replacement cost coverage, add sewer backup, and consider an umbrella policy. You'll close with confidence knowing your biggest investment is properly protected.