Personal Insurance Blog

Insurance Binders for home closing made Easy

If you are buying a home for the first time, you may find yourself asking a simple question: "What is an insurance binder?" After spending months searching for the perfect home, first time property owners are supplied with an unwieldy list of documents required for the mortgage closing. One of these documents is the home insurance binder. 

If youre a first time home buyer cover yourself with homeowners from Gordon Insurance

An insurance binder is a one page document showing the insurance company's written confirmation to insure your newly purchased house. In other words it is a temporary proof of insurance that will cover or "bind"  coverage until the formal policy is issued. The binder may be issued by the agent or the company.

Typically, a home insurance binder is issued for a 30 day period. This allows ample time for the company to process the policy; or alternatively to hold off issuing a policy if the closing is delayed.  .

The insurance binder itself lists the home insurance coverages, property location, policy period, annual premium and mortgagee information. Typically, the bank or mortgage company will request that the insurance be paid in full for the closing, and that the binder state that. This may be paid to the agent or collected at the closing.

While the binder is a simple document, get the insurance right first.

Our agency keeps it simple for you. While we work well under pressure and can ordinarily produce a binder quickly, we do recommend enough advance notice of a closing to gather information and give you time to consider your options deliberately. 

Here are the steps:

  • First, we calculate an amount of insurance needed to replace your property. known as the "replacement cost".
  • Next, we quote with our different carriers, and compare from all available companies to secure the best  pricing.   We may coordinate with your auto insurance (at your option) to take advantage of account discounts.  
  • Finally, you select deductibles, and consider options for jewelry, coverage options and  customizing the insurance as it makes sense to you. 

Once you've decided on a company, insurance underwriters may ask some additional questions.  We coordinate that with you.

The binder is often transmitted to you and the closing attorney or the mortgage broker in advance of the closing, just so they can double check lender wording and other details.  

For a short video on this subject, visit our homeowners insurance video library and click the video "For New Home Buyers".

Home buying can be stressful but securing an insurance can be an easy process with good guidance.  Our agency can make sure your insurance is properly in place and the binder delivered quickly for a smooth mortgage closing.

If you're moving to Massachusetts, check out our New to Massachusetts blog for lots of how-to steps you'll be taking after you've bought your new place, including how to get a new license, tags, public transportation info and plenty of South Shore local town info as well.

Top 10 Things to Know about Homeowner's Insurance


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