Ask the REALTOR: What’s the “Homeowners’ Insurance Addendum”?

Ask the REALTOR® is a regular video series in which I answer your most commonly-asked real estate questions, with a new Q&A posting every week. If YOU have a real estate question for me, drop me a note here.

This week’s question: What’s the “Homeowners’ Insurance Addendum”? Here’s the answer in this brief video, and don’t miss the transcript below.

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Transcript:

Hi, this is Cari McGee with Keller Williams Real Estate. Welcome to this week’s episode of “Ask the Realtor.” Every week I answer questions from buyers and sellers — and pretty much from everyone in between — regarding real estate.

This week’s question is:

“Cari, what’s the Homeowners’ Insurance Addendum? What does that mean?”

Well, that’s a contingency that is included in almost all purchase and sale agreements, or it’s something I make a habit of including. And what that’s all about is … as the home buyer, you’re going to get a homeowners’ insurance policy on the home that you’re purchasing. And the contingency protects you in the event that, either due to your own personal history with insurance and claims, etc., or the house’s history with insurance and claims, etc., if it becomes too prohibitively expensive to insure the property due to those things, then that’s an out for you. So, that’s what that means. That’s why you have the insurance contingency attached to every to purchase and sale agreement — or why I include it, anyway.

If you have any other questions for me regarding real estate, by all means give me a shout via any one of the methods that follow on the next screen. Thanks so much. Have a great day. Bye!