Do I need home insurance before closing?
Do You Really Need Home Insurance Before Closing? The answer can protect your sale and your bank account — read this before signing anything.
Quick answer: Yes — in practice, keep insurance active until closing
If you’re selling a home in Georgetown, Ontario, don’t cancel your homeowner insurance until the keys are handed over and the sale is legally complete. Legally the buyer becomes the owner at closing, but practical risk — damage, liability, or a vacant-home issue — stays with whoever controls the property. The smart move is simple: keep your policy in force, confirm coverage, and coordinate with your lawyer and the buyer so no one gets stuck on closing day.
Why this matters to home sellers in Georgetown, ON
Georgetown sits in Halton Hills — cold winters, spring thaw, and occasional localized flooding mean properties face risks year-round. Even a short gap in coverage can turn a small claim into a closing-day catastrophe: water damage, a fire, a guest injury, or vandalism. Those events don’t care about legal paperwork. If they happen when your name is still on the deed or when you control the home, you’ll be the one answering the claim — and you’ll still have to close the sale.
This isn’t theory. I work with sellers who avoided last-minute claims by keeping coverage active and documenting it for the buyer and closing lawyer. It’s fast, cheap insurance for peace of mind — and the kind of detail that differentiates a smooth sale from a delayed one.
How insurance timing usually works (plain and practical)
- Buyer responsibility: Buyers typically arrange insurance to start on closing day. Their lender will insist on proof of insurance effective on or before the mortgage funds release.
- Seller responsibility: Keep your existing insurance active until ownership transfers and the buyer has access. Even if you move out early, maintain the policy or switch to vacant-home coverage if required.
- Communication: Provide proof of your active policy to your lawyer and keep lines open with your insurer.
Step-by-step checklist for sellers in Georgetown (do this now)
- Do NOT cancel your homeowner policy until the deed transfers and keys are handed over. Simple.
- Call your insurer and tell them you’re selling. Ask about:
- Date coverage will end once you cancel.
- Vacant-home requirements if you move out before closing.
- Any short-term endorsements needed for showings or open houses.
- Get a declaration page (proof of insurance) and share it with your lawyer/closing agent and the buyer’s team if requested.
- If you’ve already moved out, ask about vacant-home coverage. Some insurers require it after a set number of days or if utilities are shut off.
- If you plan to accept possession early or leave possessions behind temporarily, document condition and have written consent from the buyer and your lawyer.
- Coordinate closing-day timing: confirm the buyer’s insurance starts on the exact closing date and time the lawyer will transfer funds.
Do these steps and you remove surprises.
Real risks sellers underestimate in Georgetown
- Winter damage: Frozen pipes burst after a cold snap. If you moved out and turned off heat, your insurer may deny a claim.
- Basement flooding: Spring melt and localized backwater events happen. Without proper sewer backup coverage, a claim can be denied or underpaid.
- Liability exposure: A contractor or prospective buyer injures themselves during a showing. If you still control the property, liability may fall to you.
- Vacancy issues: Empty homes attract vandals and squatters. Standard policies often exclude losses for vacant properties.
These are real. Don’t let a gap in coverage cost your sale or your savings.
How much does keeping coverage cost? (it’s usually small)
Canceling a policy and restarting often costs more than simply maintaining it for a few extra weeks. If you must adjust, a short extension or a vacancy endorsement is usually inexpensive — a fraction of the risk. Buyers’ lenders also require proof of insurance, and any delay can stall mortgage funding. The cost of a night or two of coverage is tiny next to the cost of a delayed closing or an uninsured claim.
Common closing-day scenarios and what to do
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Scenario: Buyer’s lender demands proof of insurance before funds release.
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Action: Confirm buyer’s policy start date. If there’s a gap, provide your proof of coverage to bridge the time or get a certificate showing continuous coverage until the buyer takes ownership.
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Scenario: Your home is vacant before closing and a loss occurs.
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Action: If you confirmed vacant-home rules ahead of time, your policy may cover a claim. If not, you’ll face denials. Avoid this by notifying your insurer and getting the right endorsement.
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Scenario: A buyer wants early possession.
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Action: Get everything in writing. Notify insurer and lawyer. Update liability and property risk expectations. Don’t agree verbally.
Who to loop in (and why)
- Your insurance broker: They’ll confirm coverage details and offer endorsements.
- Your lawyer or notary: Closing is a legal transaction. They need proof of insurance and any special agreements in writing.
- The buyer’s agent: Coordination prevents surprises. Agents can confirm buyer insurance timing.
Good coordination short-circuits delays.
Local tips for Georgetown sellers (neighborhood-level savvy)
- Basement and sewer backup add-ons: Georgetown properties near rivers or older infrastructure benefit from sewer backup coverage. Ask your broker.
- Winter checklist: Keep heat to required minimum, winterize irrigation, and check roof/attic ventilation to reduce ice dams.
- Showings: Keep liability in mind during multiple showings. Temporary ramps, plugs, and locked hazards reduce risk and limit insurer exposure.
These small, local steps save time and money.
Why an experienced local realtor matters here
A local agent who understands insurance timing and the quirks of Georgetown real estate will protect your sale. They’ll flag issues like vacant-house risks, advise on proper endorsements, and coordinate proof of coverage with your lawyer and the buyer’s team. That prevents the ugly calls on closing day.
I’ve handled dozens of Georgetown listings and seen preventable issues derail sales. The smallest detail — a canceled policy a week early — can cause the biggest headaches. Work with a pro who enforces these checks so you don’t have to worry.
How to move forward (the simple action plan)
- Call your insurer now. Tell them the closing date and ask about vacant home rules.
- Ask your realtor to confirm buyer insurance timing and provide contact details for the buyer’s lender if needed.
- Get your declaration page and share it with your lawyer.
- If you must move out early, add a vacancy endorsement.
Do this and you remove the biggest closing-day risk sellers face.
FAQ — Quick answers for Georgetown, ON home sellers
Q: Is home insurance legally required in Ontario before closing?
A: No legal rule forces sellers to carry insurance past a certain point. But practical risk makes it essential. Lenders and buyers require proof of coverage on their side. Sellers should keep their policy until ownership transfers.
Q: Can I cancel insurance the day before closing?
A: Don’t. Unexpected damage or liability before transfer can leave you exposed. Keep it active until keys change hands and the sale is registered.
Q: What if I moved out before closing — does my policy still cover the house?
A: Maybe. Many standard policies restrict coverage for vacant homes. Inform your insurer and add a vacancy endorsement if necessary.
Q: Buyer says they’ll insure — can I rely on that?
A: Only if the buyer’s policy starts exactly at closing and your lawyer confirms funds will be released. Confirm in writing and don’t cancel your policy until the sale is legally complete.
Q: Any insurance add-ons Georgetown sellers should consider?
A: Yes. Sewer backup, overland flood endorsements (if available), and vacant-home coverage are common and useful in Georgetown.
Q: Who pays if damage happens before closing?
A: If the seller still controls the property and the name is on the title, the seller typically bears the claim. Specifics depend on contracts and timing. Avoid disputes by keeping coverage.
Q: How do I prove my home is insured for closing?
A: Provide a declaration page or a certificate of insurance to your lawyer and the buyer’s agent. Your broker can issue a proof-of-insurance letter quickly.
Q: Does the buyer’s policy need to start at a specific time?
A: Lenders usually ask for insurance to be effective at or before the mortgage funding time on closing day. Confirm exact timing with the buyer’s lawyer.
If you want a smooth sale in Georgetown, preventable problems start with simple actions: keep your insurance active, communicate with all parties, and document proof of coverage. Little effort now saves time, money, and stress on closing day.
Need help coordinating your insurance and closing in Georgetown? Contact local realtor and listing expert:
Tony Sousa — Local Realtor & Listing Specialist
Email: tony@sousasells.ca
Phone: 416-477-2620
Website: https://www.sousasells.ca
Call or email today. I’ll make sure insurance won’t be the thing that derails your sale.
