When is property and liability insurance typically obtained by a purchaser?

The appropriate time for a purchaser to obtain property and liability insurance is typically aligned with the contract's provisions, particularly when there is an assumption of risk that takes effect at closing. This is important because, at closing, the buyer assumes the responsibility for the property, which includes any risks associated with ownership.

Securing insurance at this point is crucial to protect against potential liabilities or damages that may occur once the buyer officially takes possession of the property. If something were to happen to the property between the time the buyer receives control and when insurance is in place, the buyer could face significant financial consequences.

In contrast, obtaining insurance before making a purchase offer may not be necessary since the buyer does not yet have ownership, and there may not be any risks associated with the property. Additionally, obtaining it only when the seller has a policy does not provide the new buyer with coverage, as the seller's policy typically does not extend to the new owner. Waiting until after occupancy can create vulnerabilities for the buyer, as they would be uninsured during the transition period. Thus, the timing of obtaining insurance should align with the assumption of risk established in the purchase contract, which occurs at closing.