In today’s insurance market, obtaining homeowners insurance isn’t always as simple as making a few phone calls. More homebuyers are discovering that securing coverage can be one of the biggest obstacles between an accepted offer and a successful closing.
For Realtors, a delayed insurance approval can create stress, uncertainty, and even put a transaction at risk. Fortunately, there are steps agents can take to help buyers navigate insurance challenges and keep the deal moving forward.
Why Are Buyers Having Trouble Getting Homeowners Insurance?
Insurance companies have become more selective in recent years. Some common reasons a buyer may struggle to obtain coverage include:
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Prior claims on the property
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Older roofs or aging home systems
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Knob-and-tube wiring or outdated electrical panels
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Homes with a history of water damage
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Vacant properties
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Rural properties or homes with unique risks
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Buyers with prior insurance lapses
In some cases, the property itself—not the buyer—is the reason coverage is difficult to obtain.
Encourage Buyers to Start Shopping Early
One of the biggest mistakes homebuyers make is waiting until a week before closing to secure homeowners insurance.
As soon as a buyer is seriously considering making an offer, encourage them to begin conversations with an insurance professional. This can help identify potential issues before they become last-minute surprises.
If the property has an older roof, previous claims history, or unique characteristics, buyers may need additional time to explore coverage options.
Work With an Independent Insurance Agency
Not all insurance companies have the same underwriting guidelines.
A buyer who is declined by one carrier may qualify with another.
Independent insurance agencies can shop multiple insurance companies at once, giving buyers access to more options than a single captive carrier can provide. This can be especially valuable when a property has underwriting concerns.
Having a trusted insurance partner available early in the transaction can save valuable time and reduce closing delays.
Gather Information About the Property
If insurance concerns arise, Realtors can help by gathering documentation that may support an application.
Useful information may include:
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Roof replacement dates
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Electrical system updates
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Plumbing updates
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HVAC replacement records
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Recent inspection reports
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Proof of repairs following prior claims
The more information available, the easier it may be for underwriters to evaluate the property’s risk.
Prepare for Additional Insurance Requirements
Some insurance companies may require:
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A four-point inspection
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Roof certification
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Updated photographs
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Evidence of completed repairs
If these requirements surface during the transaction, acting quickly can help prevent delays.
Consider Alternative Coverage Options
If standard insurance carriers decline coverage, alternative solutions may still exist.
Depending on the property and situation, buyers may have access to:
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Regional insurance carriers
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Specialty insurance markets
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State-sponsored insurance programs
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Excess and surplus lines coverage
While these options may come with different pricing or coverage structures, they can often help keep a transaction on track.
Communicate With the Lender Early
Most lenders require proof of homeowners insurance before closing.
If insurance challenges emerge, keeping the lender informed can help avoid last-minute complications. In some cases, additional time may be needed to secure acceptable coverage.
Early communication allows all parties to work together toward a solution.
The Realtor’s Role: Be Proactive, Not Reactive
The best way to prevent insurance-related closing delays is to address potential concerns early in the transaction.
When buyers begin discussing financing, inspections, and home searches, insurance should be part of the conversation as well.
By encouraging buyers to obtain insurance quotes early, partnering with experienced insurance professionals, and identifying potential property concerns upfront, Realtors can help protect their clients and improve the likelihood of a smooth closing.
Frequently Asked Questions
1. Can a home sale fall through because a buyer can’t get homeowners insurance?
Yes. Most mortgage lenders require homeowners insurance before closing. If a buyer cannot secure acceptable coverage, the lender may not be able to finalize the loan, potentially delaying or jeopardizing the transaction.
2. When should homebuyers start shopping for homeowners insurance?
Ideally, buyers should begin obtaining insurance quotes as soon as they are seriously considering a property or preparing to make an offer. Starting early provides time to address any underwriting concerns before closing.
3. Why would an insurance company decline coverage on a home?
Common reasons include an older roof, prior claims history, outdated electrical systems, water damage concerns, vacant property status, or other factors that increase the home’s perceived risk.
4. Can a buyer get insurance if the home has a previous roof or water damage claim?
In many cases, yes. However, coverage options may be more limited, and some carriers may require documentation showing repairs were completed. An independent insurance agency can often help identify alternative carriers willing to consider the risk.
5. What information can help a buyer get approved for homeowners insurance?
Documentation such as roof replacement records, inspection reports, electrical or plumbing updates, proof of completed repairs, and photographs of improvements can help underwriters evaluate the property more favorably.
6. How can Realtors help buyers avoid last-minute insurance issues?
Realtors can encourage buyers to obtain quotes early, identify potential property concerns before an offer is submitted, gather relevant documentation, and connect buyers with experienced independent insurance professionals who have access to multiple insurance carriers.
Need Help Finding Homeowners Insurance Before Closing?
If your buyer is having trouble obtaining homeowners insurance for a property in Chester County, including Kennett Square, Oxford, Avon Grove, West Chester, Downingtown, Exton, Chester Springs, Coatesville, and surrounding Pennsylvania communities, the Longen Group team can help explore coverage options and identify potential solutions before closing day arrives.
Contact us today to discuss your buyer’s situation and keep your transaction moving forward.
