Figuring out what to do with your current homeowners insurance policy when you’re moving can be confusing. You won’t be able to transfer it to your new house, so working with your home insurance company to wrap up your old policy and get new coverage in place with them or a new insurer requires some steps. The most important thing is keeping home insurance coverage in place until you no longer own your old home. You are still responsible for your former home until the deed goes to a new owner, and you don’t want to be stuck potentially paying huge sums for damages or injuries that may occur there.
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How your home insurance policy changes when you move
When you move from one house to another, your old home insurance policy should stop when you no longer own the property. The new owners will need to get their own insurance policy. When you take ownership of the new home, you should have a homeowners insurance policy in place for it.
The most important thing to do before you move is contact your home insurance company. You’ll want to let them know that you’re moving in the near future. This gives both you and them plenty of time to wrap up any loose ends with your current coverage. They can help you time the cancellation of your old home insurance policy and also possibly help you transition to a new one. You’ll want to adequately time contacting your insurer to make sure there is no lapse in coverage.
Can I keep my old home insurance policy when I move?
You can’t keep your old policy when you move. This is because your old home and new home are two completely different properties that have different risks. Also, the cost may vary between policies for each property because of differing square footage, age, additional structures and more.
The good news is that you may be able to stay with your current insurer. Of course, this depends on where you are moving. If you are moving within the same state, you will likely be able to stay with the same insurance company. But that may not be possible if you are moving out of state. Not all insurance companies or agents are licensed to write policies in all states. So, moving out of state could require you to look for a new home insurance provider.
Talk with your home insurance company to see if they can provide coverage in the new area you’re moving to. Even if they can, you should take this opportunity to compare home insurance quotes from multiple companies. You may be able to get a better deal from another provider.
What to do with your old home insurance policy when moving
Cancelling your old home insurance policy and starting the new policy without a lapse in coverage takes careful timing. Here are some key things to remember:
- Don’t let your coverage go too soon: Make sure that you do not cancel the old policy until you officially no longer have ownership of the property, not based on a future closing date. Closing dates can change, and if the house closes after your old policy is cancelled, you may be responsible to pay for any damage done to the old property or injuries that occur there. Your home insurance liability coverage can help you avoid these unnecessary costs.
During the transition to a new home, It’s not usual for policies to overlap if you don’t sell your old house immediately. In other words, there’s a period of time when you have two separate policies for two different properties.
- Give your provider an early heads up: You should contact your current insurer at least a month prior to the moving date to let them know, regardless of whether you’re moving down the street or across the country. Consider alerting your insurer as soon as you put in an offer on a house. It’s better to have overlapping policies when you move than it is to assume extra risks or accrue coverage gaps. Once you close the sale of your old home, you can cancel the old policy, and some insurers will allow you to backdate a cancellation. There should be no penalty for cancelling your home insurance policy when you move.
- Arrange for a premium refund: If you’re not going with the same provider for the coverage on your new home, you will be eligible for a refund if you paid your premium in advance. One thing to be aware of is your policy term and how far in advance you have paid.
Most payment options for home insurance come in monthly, bi-monthly, quarterly, semi-annually and annual frequencies. If you pay in advance, you’ll usually receive a refund for your homeowners insurance once it’s cancelled. If you plan to buy your new home insurance policy from the same provider, the remaining amount you’ve paid for the year would probably go towards the premium on the new home.
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