Definition
The process of activating homeowners insurance coverage on your new property, typically required by lenders before closing. Insurance should be effective on closing date.
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Lenders require proof of homeowners insurance before releasing closing funds, making it essential to activate insurance before closing. Insurance should provide full replacement coverage and include liability protection. Coverage typically becomes effective on the date specified in the policy.
Pro Tip
Obtain multiple insurance quotes before closing and activate policies to be effective on your closing date.
Example
The buyers obtained homeowners insurance quotes from three companies before closing and activated their chosen policy to be effective on their closing date.