If a buyer neglects to acquire a property insurance binder before closing, what typically happens?

In most real estate transactions, especially those involving financing through a mortgage, obtaining property insurance prior to closing is crucial. A property insurance binder serves as a temporary proof of insurance, indicating that coverage will be in place on the property from the date of closing.

If a buyer neglects to acquire this binder before closing, the transaction often cannot proceed as planned. Lenders usually require that property insurance be secured to protect their investment against potential losses. Therefore, without the binder in hand, the closing may be postponed until the necessary documentation is provided. This protects both the buyer and the lender, ensuring that there is insurance coverage that starts immediately upon transfer of ownership.

Postponing the closing until the binder is provided helps prevent any lapse in insurance coverage, which could lead to significant financial risks and complications for both parties involved in the transaction.