Buyer insurance questions that sellers should be prepared to answer

Key Insights

• Buyers need to have their homeowner’s insurance policy in place before a lender will sign off on the mortgage amount.
• With insurance premiums rising and robust policies becoming harder to qualify for, buyers may be more interested in the home factors that contribute to their eligibility.
• As a seller, you should be prepared to answer questions about the home that insurance providers consider.

Congratulations — you have a buyer interested in your house! There’s still a way to go before you arrive at the closing table, but you’ve reached a huge milestone in your home-selling journey. For the most part, the ball is in your buyer’s court. They are working on finalizing the finer details with their lender, which means they are searching for insurance providers to cover their new property.

Lenders require that the buyer have sufficient homeowners insurance before they will sign off on the mortgage amount. But with insurance premiums rising, buyers are asking more questions about the home to help determine if purchasing that property could raise their insurance rates or even prevent eligibility. As the seller, you should be prepared to help answer questions about the home that an insurance company may have as they determine the buyer’s policy and coverage.

Home questions that could impact insurance rates

Here are a few questions about your home that you should be prepared to answer:

• How old is the roof? (The #1 eligibility factor!)
• How old is the furnace?
• Does the electrical system use knob-and-tube wiring?
• What number of amps do the fuses use?
• What is the siding like? What material is used, when was it replaced and what condition is it in?
• How is the plumbing?
• What is the AC system?
• Any major repairs or renovations?

Some of these answers may be included in your disclosures, while others may be uncovered during an inspection or from an appraiser. It’ll also be helpful to the buyer if you provide full documentation of your appliances, systems and any work you’ve had done to them.

Questions about your current insurance coverage

Some buyers may also ask you questions about your current coverage:

• What insurance company do you currently have? How long have you worked with this company? Did you get any additional quotes?
• Have you used any other insurance companies?
• What is the coverage amount for the property and what is the deductible?
• Are there any specific endorsements or riders?
• Have you had any history of claims or denied claims?
• Any history of water damage or flooding?

Get the help of a home expert

Remember that you don’t have to compile, communicate and manage this on your own — your REALTOR^Ⓡ is there to help! If you have any questions or are ready to start a home search of your own, reach out.