For real estate agents, there’s nothing more challenging than a last-minute issue that derails a closing, especially when it could have been avoided. One of the most overlooked deal-breakers? Insurance.

Here are the top insurance-related issues that can delay or jeopardize a closing and how you, as an agent, can help your clients avoid them.

1. Undisclosed Property Risks

Features such as knob-and-tube wiring, aluminum electrical systems, oil tanks, or past water damage are considered potential red flags for insurers. If discovered late in the process, they can result in delays, limited coverage, or denied insurance altogether — potentially putting financing at risk.

Realtor tip:
Take note of these features in homes and advise your clients to bring these up to their insurance providers right away.

Even when inspections go smoothly, insurance may still be delayed — for reasons your clients won’t expect. Inspectors can flag potential issues, but they don’t determine whether a property meets the insurer’s guidelines. For example, aluminum wiring might be deemed “safe” by a licensed electrician, but certain insurers will still decline coverage unless it’s been fully updated or pigtailed. That’s why it’s critical to consider both the physical and insurance risk profiles early in the process.

2. Inadequate Lead Time

Unlike mortgage approvals, insurance isn’t always instant. Properties with unique risks, seasonal homes, or multi-use dwellings often need additional underwriting time, especially near holidays or weekends.

Realtor tip:
Recommend your clients start gathering insurance quotes well before closing. A good broker can begin the process based on the offer, not the date of possession.

3. New Builds & Renovations

If a home is still under construction or undergoing significant renovations, it may require a course of construction (COC) policy — which is very different from standard home insurance.

Realtor tip:
Ask the seller or builder for occupancy status and any gaps in insurance. If your client is purchasing a home that’s not yet finished, connect them with a broker who understands builder’s risk policies.

4. Rental or Multi-Use Properties

If your buyer is purchasing a home with a rental unit, planning to Airbnb, or leaving tenants in place, this affects how insurers classify the property — and it can’t be insured the same way as an owner-occupied home. This could also lead to a denied claim if it was not initially disclosed.

Realtor tip:
Make sure your client discloses how the property will be used post-closing. Different usage requires different policies, and assuming standard coverage could be a costly mistake.

5. Missing Tenant Insurance

In a tenant-occupied property, buyers often inherit the lease. But if the current tenants don’t carry their own contents and liability insurance, your buyer could be exposed to risks that aren’t covered.

Realtor tip:
Confirm the tenants have valid renter’s insurance — and if not, recommend the buyer include it as a condition.

Working With a Broker Makes All the Difference

As a real estate professional, your role is to keep things moving — and that’s where insurance brokers can help. We’re here to spot red flags early, explain unique policy needs, and make sure there are no surprises on closing day.

If you have a deal in motion or want to learn more about how to avoid insurance delays, visit us at cassidyyoung.com or reach out to me directly:

Megan Lukacsovics
Associate Broker & Royal LePage Partnership Lead
mlukacsovics@cyins.com
905-999-6821