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Homeowner's Insurance Binder

- Pranav Khemka Thursday Tidbit

Home insurance protects against fire and other potential incidents that may require repair or replacement of your home and belongings. Before a lender is willing to fund a loan, they require their borrower(s) to arrange for a satisfactory home insurance policy. Without valid insurance protection in place, a buyer’s lender will not fund a loan on the expected Completion Day – as the property is their security for advancing the loan.

Most lenders require evidence of insurance against fire and other hazards for not less than the full replacement value of the property with loss payable to them as first mortgagee. Evidence is provided in the form of an insurance binder. The insurance binder is a 1-to-2-page document that summarizes important details of your insurance policy (ex: the coverage, the names of the insured, the name of the lender as first loss payable, etc.) and verifies that the property will be insured come Completion Day.

Prior to approaching an insurance agent / private insurance company, buyers should obtain a spec sheet of their home so they will be able to answer any questions regarding the property. The spec sheet should cover, among other things, the following items:

 The year the home was built;

 The type and age of the roof (ex: shingles);

 The style of the home (ex: split-level);

 The exterior finish of the home;

 Whether there is a garage on the property and its size;

 Square footage of the home;

 Number of bathrooms, kitchens and fireplaces;

 The improvements to the home (ex: new roof, central air conditioning system, etc.);

 The use of the home (ex: single-family or multi-family);

 Heat source;

 Safety devices (ex: security systems or fire sprinklers);

 Type of electrical service / wiring in the property;

 Type of foundation (ex: poured concrete slab); and

 Material types for floor covering (ex: hardwood), ceilings (ex: drywall) and wall surfaces (ex: wallpaper)

Most of this information, if not all, can be found on the MLS® listing. As such, purchasers can contact their real estate agent to obtain a copy of the listing prior to meeting with their insurance broker or insurance company.

If you have any questions concerning the homeowner’s insurance binder, please don’t hesitate to contact Khemka Law or counsel of your choosing. If there’s a topic you’d like us to cover, please let us know! We are always here to assist you. Thank you for taking time to read this Thursday Tidbit.


Pranav Khemka

Pranav Khemka, Barrister & Solicitor T: (403) 457-9577 | F: (403) 457-9578


LEGAL: The Thursday Tidbit provides   general   information and does not constitute legal advice. Circumstances may vary and no lawyer-client relationship is established from the use and reliance of this information. You are strongly advised to seek any legal advice by directly contacting  Khemka Law or counsel of your choosing.  Khemka Law does not warrant or guarantee the quality, accuracy or completeness of any information found within this Thursday Tidbit.

Data is supplied by Pillar 9™ MLS® System. Pillar 9™ is the owner of the copyright in its MLS®System. Data is deemed reliable but is not guaranteed accurate by Pillar 9™.
The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.