Home Insurance and Your Mortgage
The short answer
Your lender requires home insurance before closing. Your lawyer needs an insurance binder showing coverage from your closing date, with your lender named as loss payee, before funds are released. Get quotes as soon as your offer is accepted, since some insurers need a few days to bind coverage.
Lacroix Mortgage Group is a Calgary mortgage team licensed with and powered by Mortgage Connection Inc., a mortgage brokerage licensed in Alberta by the Real Estate Council of Alberta (RECA), and part of the DLCG network. Our brokers are individually licensed. See licence details.
What You Need to Know
Why does my lender require home insurance?
Your lender needs proof of home insurance before it releases mortgage funds, because it protects their security in the property. Without a valid insurance binder, your lawyer can't complete the closing.
What does home insurance cover?
Typically your home against fire, water damage, theft and other named perils, plus liability. Coverage and premiums vary by insurer, property type and location.
What do I need before closing?
An active policy on the new property, a certificate of insurance or binder letter showing coverage from your closing date, and your lender named as loss payee. Your lawyer confirms the exact requirements.
When should I get home insurance?
As soon as your offer is accepted. Some insurers take a few days to bind coverage, especially for older homes or if an inspection is needed. Don't leave it to the week before closing.
How do I find coverage?
Get at least two or three quotes from online brokers, your auto insurer or an independent broker.