Closing Protection Insurance: What Home Sellers Need to Know

Vaughan homeowners insurance

You purchase travel insurance when you fly overseas, car insurance for your vehicle, and life insurance to ensure the well being of your loved ones should something happen to you. But did you know that there is a specialized insurance for selling your home? It’s called closing protection insurance, and it’s a policy that home sellers should know about.

 

What is closing protection insurance?

Closing protection insurance covers additional costs that can result from delayed or canceled home closings.

 

Why do I need closing protection insurance?

Due to the possibility of your home closing being delayed or terminated, you need some protection in case you are forced to carry the costs of two homes for an extended period of time.

 

If your home closing is delayed for reasons beyond your control (such as buyers being declined their financing at the last minute), unexpected expenses begin to pile up. These include temporary accommodation, living expenses, bank fees, additional moving and storage charges, and other incidental costs. These can potentially add up to thousands of dollars!

 

Unfortunately, the only recourse for most sellers is to get involved in costly litigation. However, there is no guarantee that this will recover the costs incurred due to the home closing being delayed or falling through. Closing protection insurance, on the other hand, acts as a safeguard against these unpleasant and costly surprises.

 

What are the benefits of closing protection insurance?

Closing protection insurance provides peace of mind, confidence and security to the home seller. It solves many of the problems associated with delayed closings and it’s quick, easy and affordable to obtain.

 

Where do I get closing protection insurance?

Numerous companies provide closing protection insurance. One well-known example in the industry is Canadian Home Shield. There are plenty of options to chose from – be sure to do your research, ask questions, and get to know your options before selecting a company.

 

How much does closing protection insurance cost?

On average, for around $99, sellers can purchase a $25,000 insurance policy that will cover all mortgage payments, real estate taxes, utilities and insurance premiums up to a total of $25,000 in the event that the deal does not close through no fault of the seller.

 

As a home seller you are especially vulnerable when buyers are unable to close. There are numerous extra costs involved when it comes to maintaining a home that has failed to close, and that is especially stressful when you have already purchased another home. By purchasing closing protection insurance, you can protect yourself and your family from uncertainty, and unpredicted costs in case the closing of your home is delayed or canceled at the fault of the buyer.

 

Have questions about Closing Protection Insurance? If you live in Vaughan or the York Region and would like additional information, feel free to contact me here.

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