Got a closing date and your lender just asked for proof of insurance? Here’s exactly what you need and how to get it quickly — without the stress.
What Lenders Require
Your lender needs three things: proof that the dwelling is covered for at least the loan amount, confirmation they’re listed as an additional insured (also called a mortgagee), and an insurance binder showing coverage is active on or before closing day.
What an Insurance Binder Is
An insurance binder is a temporary document issued by your insurance company that proves coverage is in place. It’s valid for 30 to 60 days. Your lender will accept this at closing — you don’t need the full policy in hand. A local agent can issue a binder the same day in most cases.
What You Should Want (vs. the Minimum)
The lender’s minimum protects the bank’s collateral — not you. Make sure you also have replacement cost coverage (not just the loan amount), adequate personal property coverage for your belongings, liability protection of at least $300k, and flood coverage if you’re near any waterway.
How Fast Can You Get Coverage?
Same-day or next-day coverage is common when working with an independent agent. Don’t wait until the week of closing — if there are questions about the property (older roof, prior claims, etc.) you want time to resolve them. Two weeks minimum is ideal.
Avoid Force-Placed Insurance
If you close without arranging your own coverage, your lender can place their own policy on the property — called force-placed insurance. It’s significantly more expensive than a standard policy, doesn’t cover your personal belongings, and only protects the lender’s interest. Avoid it entirely by getting your own coverage in place first.
Get Your Binder Before Closing Day
Call (502) 214-3200 or request a quote online. We can get your coverage bound and send the binder directly to your lender — so this is one less thing on your closing checklist.
