Home Insurance Checklist for First-Time Buyers in the Chicago Suburbs

Buying your first home comes with a long to-do list, and home insurance often lands at the bottom until the lender asks for it. Starting early gives you time to compare coverage and avoid a scramble the week of closing. This checklist follows the order things happen.

Step 1: Start as soon as your offer is accepted

Your lender will require proof of homeowners insurance before closing. Starting right away gives you time to ask questions, adjust coverage after the inspection, and avoid surprises. It also gives you an early look at the cost, which matters for your monthly budget if insurance is paid through escrow.

Step 2: Gather what your agent will need

• The property address and year built
• Square footage, number of stories, and the type of construction
• Age of the roof, furnace, water heater, electrical, and plumbing
• Your home inspection report
• Your current auto policy, if you want to ask about bundling

Step 3: Use your inspection report

Your inspection is a coverage tool, not just a negotiating tool. Many homes in Chicago and the older suburbs have aging sewer lines, sump pumps, or original electrical. A newer roof or updated systems can affect your rate, and known issues are worth fixing before they turn into a claim.

Step 4: Insure the rebuild cost, not the sale price

Your purchase price includes the land, which does not burn down. What matters is dwelling coverage: what it would cost to rebuild your home today with similar materials. In Chicago neighborhoods with expensive land, rebuild cost can be well below the sale price. In older homes with plaster walls and custom trim, it can be higher. Ask your agent how the estimate was calculated.

Step 5: Choose the right coverage

• Dwelling: the cost to rebuild the house
• Other structures: a detached garage, fence, or shed
• Personal property: your belongings, ideally at replacement cost
• Liability: if someone is hurt on your property
• Loss of use: living expenses if a covered loss forces you out
• Water backup: sewer and drain backup, added to the policy

Water backup deserves extra attention. Basement water after heavy rain is one of the most common claims in the Chicago area, and a standard homeowners policy does not include sewer or drain backup unless you add it.

Step 6: Pick a deductible you can pay

A higher deductible usually lowers your premium. As a first-time owner, keep it at an amount you could pay from savings without strain, since closing costs and moving often drain cash in the first year.

Step 7: Check the flood zone

Standard home insurance does not cover flooding. If your home is in a high-risk flood zone and you have a federally backed mortgage, your lender will require flood insurance. Even outside those zones, flood coverage is worth a conversation. Flood policies through the National Flood Insurance Program usually have a 30-day waiting period, so do not leave it to the last week.

Step 8: Send proof to your lender before closing

Your agent will send your lender the evidence of insurance, usually called a binder or declarations page, with the lender listed as mortgagee. Confirm your lender received it a few days before closing.

After you move in

• Take a video of every room for your records
• Ask about discounts for smoke detectors, security systems, and bundling with auto
• Schedule a policy review after your first year, or sooner if you renovate

Frequently Asked Questions

When should I buy homeowners insurance before closing?

Start as soon as your offer is accepted, and have the policy in place with proof sent to your lender several days before closing.

Is home insurance required in Illinois?

State law does not require it, but almost every mortgage lender does. It protects both you and the lender’s investment.

Does home insurance cover sewer backup?

Not by default. Sewer and drain backup coverage is usually added to a homeowners policy for an extra cost.

Should I insure my home for what I paid?

No. Insure it for what it would cost to rebuild, which can be higher or lower than the sale price because land is not included.