Insurance Binder

So, you have finally found your DREAM home, the ink is dry and you are excited to move towards closing!  CONGRATULATIONS!  Your mortgage is preapproved and the anticipation and race to the finish line is on!   
When you signed your contract, one of the contingencies named is relative to obtaining insurance on your home.  It’s very important to start this process early on, as you will find different companies will quote different rates, and having an insurance “binder” is going to be a lender requirement to complete your loan process.  Also, in the Northwest MLS Insurance Addendum that we include with your contract, the boilerplate designates a contingency period of 5 days after mutual acceptance to apply for insurance, and then 15 days after mutual acceptance to obtain a binder that is acceptable.
So….what’s a binder? Simply put, it’s proof of insurance your lender requires as evidence that your new home is covered against any loss, fire, theft, damage, etc.  It does take some time for your insurance agent to put this together, so save them some stress of rushing and try to have them begin working on this as soon as possible, so you have adequate time to verify your coverage is what you want and also allowing them enough time to supply the copy of the binder to your lender to pay the premium at closing.
Once you have decided WHO will be your insurance provider, it’s easiest to have your loan officer contact them to obtain what they need for closing. The insurance premium will be calculated into your closing costs, and your lender will collect monthly escrow funds that are saved over the year to be disbursed when the next annual premium is due.
It’s that simple! 


Keeley Wagner is a licensed Realtor with The Connors Group at Windermere Group One and a former Licensed Closing Agent.  Check out for more information.

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