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  • Writer's pictureDaniel Rangel

Property Buyers, Getting an Insurance Quote Is More Important Than You Think

Homeowner’s insurance—for many buyers, it’s just something they must get in order to fund their purchases. Many don’t even think about it until they’re about to close escrow and the lender demands it. It’s only then—when it’s too late—that they realize this was a big mistake.

“I get it all the time. Buyers and lenders calling me for insurance to close escrow, tomorrow,” Steve Little says. Little is owner of Steve Little Insurance Agency, Inc., a top insurance agency in West LA. I sat with him to discuss this.

Little wisely recommends that buyers get in touch with their insurance agents from the beginning.

Here are two huge reasons.

One, “your insurance premium is part of the mortgage equation,” Little says.

Many lenders will pre-approve you for a loan amount, based on an estimated insurance premium cost, not the actual cost. This means you can spend months looking for a home and have an offer accepted, only to find out at the last minute that your coverage is more expensive than the estimated amount, and now you don’t qualify.

Two, “An insurance quote won’t only reveal a price, but also important information regarding your purchase.”

Insurance companies accumulate a huge amount of information and statistics to reduce their risk. Use this to your advantage!

For example, your agent might tell you that your quote is high because the property is in a flood zone, a high-fire hazard zone, or in a zone with a high propensity for loss (a nice way of saying you’re likely to get robbed). Your quote can even teach you that homes with raised foundations are “significantly costlier to insure than those with slab foundations because raised foundations pose a higher hazard in case of an earthquake,” according to Little. This is all information buyers should know in advance, not a day before closing.

So, remember, when setting up your property-buying team, don’t forget the insurance person. This person is more important than current real estate practices make them out to be. Take Little’s advice. Don’t wait till the last minute—when it’s too late.



Writer: Daniel Rangel is a real estate agent. "I love doing these interviews. Aside from fun, they give me access to knowledge, which I pass down to my clients."

A big thanks to Steve Little @ for contributing to this article.


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