Buying Your First Home – What to Know About Insurance and Mortgages 

Buying your first home can be a significant milestone, as well as a complex one. Between securing a mortgage and understanding insurance requirements, it’s easy to feel overwhelmed. But with the right knowledge, you can navigate this process with confidence. At Liberty Auto Insurance, we can help you understand how insurance and mortgage requirements work when purchasing your first home.

Am I Required to Have Insurance?

Although there are no sweeping laws requiring home insurance, if you’re financing your home with a mortgage, your lender will typically require you to have coverage. This can help protect their investment in case of damage from fire, storms, burglaries or other covered events. Even if you’re buying a home outright, insurance is still highly recommended to financially protect your property, belongings and interests.

How Does My Mortgage Affect My Insurance Needs?

Your mortgage lender doesn’t just require insurance; they can also influence the type and amount of coverage you need. For example, if your home is in a flood-prone area, your lender may require separate flood insurance. Additionally, your loan amount may determine your minimum coverage limits. Some lenders also require you to list them as a loss payee on your policy, meaning they’ll be notified if your coverage lapses.

When Should My Insurance Coverage Start?

You’ll typically need to have your homeowners insurance policy in place when closing on your home. It’s usually a good idea to start shopping for insurance as soon as your offer is accepted to avoid delays. Your lender may require you to pay the first year’s premium up front and include it in your closing costs.

We’re Here to Help

If you’re purchasing a home in or around San Antonio, TX, the dedicated team at Liberty Auto Insurance has the knowledge and experience to help you secure ideal insurance that complies with lenders’ requirements. Contact us today to learn more or get a personalized quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.