First Time Home Buyers
Buyers working through a lender's insurance checklist for the first time.
Homeowners Insurance Binder for Closing in Texas
Your lender and title company need proof of homeowners insurance before you close. We line up the policy and send evidence of insurance with the details your loan file asks for.
Who It's For
Move Up and Relocating Buyers
Families buying in San Antonio while selling a home here or moving in from another city.
Buyers of a Home to Live In
Owner occupied purchases. Rentals and flips belong on a landlord or vacant property policy instead.
Buyers in the Option Period
Contracts where the insurance quote should happen while you can still terminate.
What It Covers
Binder or Evidence of Insurance
A document from the insurance company showing the policy, coverage amounts, effective date and your lender as mortgagee. Lenders may call it a binder, evidence of insurance or a declarations page.
Mortgagee Clause
The lender's exact name, its successors and assigns wording (often ISAOA/ATIMA), its mailing address and your loan number, written the way the lender gives them.
Dwelling Coverage
The house insured for what it would cost to rebuild. Lenders set a minimum, commonly tied to a replacement cost estimate or the loan amount.
Paid First Year Premium
Most lenders want the first year paid at or before closing, directly or through the closing statement.
Flood Insurance When Required
If the home is in a high risk flood zone and the loan is government backed, the lender generally requires flood insurance.
Escrow Setup
Many loans collect future premiums through an escrow account, and the insurance company bills the lender at renewal.
Texas and San Antonio Details
Texas law does not require homeowners insurance, but a lender will require it while you owe money on the home. Before closing, the lender and the title company want proof that the policy is bound and effective on the closing date, with the lender listed as mortgagee. Send us four things: the lender's insurance requirements, the mortgagee clause and loan number, the year the home was built with any updates to the roof, plumbing, electrical and heating and cooling, and the closing date with the title company's contact.
Use your option period. The standard TREC resale contract gives the buyer an unrestricted right to terminate during the option period, and the notice has to be given by 5:00 p.m. local time on the deadline. Request your quote as soon as you have the inspection report. Roof age and condition, the electrical panel, plumbing type and foundation notes can change which insurance companies will write the home and how a roof claim is paid.
Insurance companies commonly check a home's claims history through a CLUE report, which covers the last seven years no matter who owned the house. Ask the seller for a copy during the option period. If the seller stays in the home after closing or you move in early, the TREC contract tells both sides to check with their insurance provider first, because coverage may be limited or end when possession changes.
Common Questions
What Is a Homeowners Insurance Binder?
A binder is temporary proof from the insurance company that coverage is in place on a set date, before the full policy is issued. Many lenders accept a binder, an evidence of insurance form or a declarations page, as long as it shows the mortgagee clause, loan number and effective date.
When Should I Get Homeowners Insurance Before Closing?
Start during your option period, once you have the inspection report. As an independent agency, we can request quotes from more than one insurance company, and starting early leaves time to answer roof or underwriting questions before your loan file goes to final review.
What Is a Mortgagee Clause?
The lender's name, successors and assigns wording, mailing address and your loan number as they should appear on the policy. Your lender provides it, and it should be copied exactly.
Do I Have to Pay the First Year Before Closing?
Most lenders want the first year's premium paid at or before closing. The standard TREC resale contract lists required hazard and flood insurance premiums among the buyer's expenses.
Do I Need Flood Insurance to Close?
If the home is in a high risk flood zone and the loan is government backed, the lender generally requires it. A National Flood Insurance Program policy bought in connection with a new loan has no waiting period, and a seller's policy can be transferred to the buyer.
Related Coverage
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