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why is a binder not acceptable proof of home owners insurance to buy a house?

I swear they us want to buy houses but they make it near impossible!!!! I have been trying to buy the same house for SIX MONTHS. My financials are fine. But they are making up us jump hoop through hoop and this is the second company Im going through. Im just convinced the first one didnt want to lend the money. We went to the second company with an FHA approved house and its the same BS. We are supposed the close on Friday AGAIN, but now a they want a certificate of insurance as proof of homeowners. We went and filled out all our paperwork last friday and they gave us a binder. Well the mortgage company says thats not good enough, certificate or nothing. My insurance doesn't give out certificates. Since when are frigging binders not enough!!!!!!!!!!!!


Asked by JrSmOm2005 at 12:11 PM on Jun. 22, 2009 in Home & Garden

Level 4 (44 Credits)
This question is closed.
Answers (4)
  • It's been several yrs since I worked for a homeowner's insurance company, but as I recall: A binder is not the same as insurance. A binder is explaining what coverage you will have, assuming that your application is approved, and that nothing changes. For example, if you told them your house is worth $60,000, but an appraisal is done that says it's only worth $50,000, that could change your coverage. So the binder then would be inaccurate, which is why the mortgage company may not want to accept it.

    As for your insurance not giving a certificate of insurance, yes they will. You might have to push them on it, but they will. Plus, and again, it's been many years, so I may be wrong, but I don't think you can get one before closing, b/c it seems to me you cannot insure a home you don't own.

    Answer by tropicalmama at 1:28 PM on Jun. 22, 2009

  • I work in this industry and I have never run into this!!! Ask your insurance Company to provide more than the dec page.

    Answer by mamakirs at 12:17 PM on Jun. 22, 2009

  • We insured our home before the closing. We had to or we couldn't get the loan on it. Seems to me that the mortgage company, insurance company, and everyone else who is supposed to provide something in the deal should all meet together and hash it out amongst themselves.

    I wish you all the best.

    Answer by PrydferthMenyw at 11:56 PM on Jun. 22, 2009

  • I have never heard of an insurance company not issuing a certificate of insurance; try to find another carrier.

    Answer by rkoloms at 8:20 AM on Jun. 23, 2009