When purchasing a home, does the home insurance need to be in place prior to closing on the home?

Asked by Steph from Cuba City, WI

Steph:

Thanks for the question.

Yes, most (if not all) lenders require that you have homeowners insurance in place before closing.

Before you buy a policy, be sure to shop around. Services like InsureMe.com make it easy to get multiple quotes from competing insurance companies.

Also, make sure you know the difference between replacement cost and actual cash value. Actual cash value, while cheaper, only covers the market value of lost property. Replacement coverage gives you the money to replace lost property.

Finally, consider bundling your auto and home insurance policies under one insurer. This will often bring significant savings.