I don’t think I can count on all my digits (and I have at least the average amount) the number of times I’ve received a call asking for Evidence of Insurance on a home set to close that same day or the following. Now, that’s not a complaint… not at all! We, insurance agents, appreciate the business and your trust that we can “get’r done!” on short notice. But from your perspective, I wonder if you’re comfortable risking your paycheck on an insurance agent’s ability to deliver the necessary documents needed – often times, in just a few short hours.

And here is where this insurance tale begins. In the next few paragraphs, I’ll share with you a couple of home insurance tips that are often overlooked by many homeowners. These tidbits can have serious consequences for the homebuyer (and seller, I’ll explain later), and a few of them can put your sale closing and payday in serious jeopardy. Let’s make you the hero of the day and prevent any delays for those new homebuyers, okay?

When is it appropriate to get the insurance process started? In short – as soon as possible! If there is a lender involved, proof of insurance will be required to complete closing. BUT well before closing, the lender will be running numbers to determine if the buyer qualifies for the amount needed for the purchase.

The cost of insurance (premium amount) will be included in these numbers, and putting the mortgagee and insurance agent in touch early can work in everyone’s favor. In the event a lender is not involved, the need for insurance is still present, though at the buyer’s discretion. If a cash buyer waits to obtain home insurance with the approach “I’ll take care of it after closing,” a few things inevitably happen. Most common, in the chaos of changing residences, insurance moves lower and lower on the long list of to-do. H ere’s a fact that may not be well known: many insurance companies rate premium on insurance history – that is to say “the duration on which continuous coverage has been in place.” A gap in coverage can skyrocket the cost of insurance for a number of years or even make the home/client ineligible for coverage through some companies. Yikes! Knowing this and sharing it with your clients will save many a headache and ensure protection in the event of a claim.

Now that we are aware of the need to get started early, what else is important to know about home insurance? A quick search on your favorite internet search engine will result in a number of articles (though not one that I could find published recently) that describe, at length, important details regarding home insurance.

I’ll touch on two not well known aspects of homeowner, landlord, and condominium policies that lenders and clients may find important.

First, the standard property policy doesn’t usually cover every possible reason for loss. This is especially true for a loss caused by flood. Living here in Las Vegas, surrounded by miles and miles of desert, we might only think of flooding during the few days of rain each year. But under federal law, flood insurance may be mandatory for homes in certain flood zones. And these zones do exist here in Nevada. Flood zone maps are frequently updated and can be found via an address search at www.floodsmart.gov. Lenders will generally be aware if the home requires flood insurance, and this may be an important consideration for your buyer.

A second risk not covered by a typical property policy is damage caused by an earthquake. Did you know Nevada is ranked third in the nation for being at risk for large magnitude seismic activity, behind Alaska and California? Moreover, The Silver State is ranked fifth nationally in estimated losses on an annualized basis due to earthquakes (http://earthquakes.unlv.edu/). These are two significant facts homebuyers should consider. Protection may be available with a simple earthquake endorsement to a home policy or a stand-alone earthquake policy.

Lastly, how does the timing of home insurance matter to your seller? Another example of the aforementioned moving chaos is the frequency of sellers ‘forgetting’ to cancel home insurance on sold properties – it happens more than you’d believe! Insurance companies generally refund unearned premium without question if cancelled in a reasonable timeframe (~30 days). After a certain timeframe (varies), companies will require proof. If never notified, they’re unable to apply a refund.

We know the home selling process has a LOT of moving parts. Getting an insurance agent on your side can help set the process of closing in motion and may help you get the sale. Insurance agents are salespeople too… they want you to close the deal. Work closely with them as part of your team; a good one will make you look incredible and remove one more roadblock to your next commission check.

After all, teamwork makes the dream work!