Q & A - Why is there a Property Insurance deadline?
Over the last few years, property insurance deadline has been added to the Contract to Buy and Sell and some buyers questions why we have to have insurance in place within a couple weeks of going under contract.
Colorado has had many tornadoes, floods and forest fires which have increased rates and or made areas difficult to attain insurance. If you are buying in the foothills, you may have to make many calls to locate a company that will insure a detached family home due to forest fire danger.
This date gives the buyer time to call insurance agencies to be sure the home you are purchasing is insurable. Is the home in a flood zone? Does the home have real shake shingles? Has the home had many water claims? Another factor to attain insurance on your home is the buyer's FICO score, and determines how much you are to pay.
It is wise to contact your insurance company early in the transaction to be sure your home is insurable, especially if you are using financing. The lender will need the insurance information when the file goes to underwriting.
The Insurance Property Deadline is a safety net to be sure a buyer can insure their potential home, and/or live with the rates that are quoted.
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