In real estate transactions, who is predominantly responsible for covering hazard insurance premiums?

In real estate transactions, the buyer typically covers hazard insurance premiums, often through escrow. This aligns with the financing process, where the lender usually requires proof of hazard insurance to protect their investment in the property. The costs for this insurance may be included in the closing costs, and the buyer pays for them through an escrow account that serves to manage funds for such expenses.

Hazard insurance protects against potential damages to the property, ensuring that both the buyer and the lender are safeguarded against loss from incidents like fire, theft, or natural disasters. This responsibility is generally established early in the transaction process, with the buyer making arrangements for the policy before closing. Understanding this financial obligation is crucial for buyers as they prepare for the total costs associated with purchasing a property.