Figuring out what to do with your current homeowners insurance policy when you move 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.
This article will cover
How your home insurance policy changes when you move
When you move from one house to another, your old home insurance policy should stop as soon as you no longer own the property. The new owners will need to get their own insurance policy. When you take ownership of your new home, you should have a homeowners insurance policy in place for it.
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.
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.
What do I need to get a new home insurance policy?
Your insurance company will consider different factors when setting the premiums for your new home. When switching to a new policy, your home insurer will ask you some questions about your new home. This includes the area you live in and the value, age, material and safety features of your new home. You can compare insurance companies before you move in order to get all the coverages you need for your new home at the best price.
Does home insurance cover damage from moving?
Your home insurance policy will cover your personal possessions if they're damaged from a covered loss when you're moving. For example, if your items are stolen in the process of your move, your home insurance policy should cover the damage.
However, if one of the movers you hired drops a piece of your furniture and it gets damaged, your home insurance policy typically won't cover the damage. However, if you hire movers, you can purchase moving insurance from the company.
There are two types of liability coverage you can get from your moving company that are mandated by federal law:
- Released-value coverage is the most basic coverage, and it's free. You will only get up to 60 cents per pound for a damaged item. If your two-pound $1,000 laptop gets damaged, then you would get $1.20.
- Full-value coverage is also required by federal law, but you have to purchase it. If any of your belongings are damaged, this coverage can pay the full replacement cost of the damaged item or offer cash equal to the item's current market value. However, items that are worth $100 a pound or more are usually excluded.
- You can also purchase third-party moving insurance if you choose to use the released-value coverage. With this coverage, the moving company is still liable for up to 60 cents per pound; however, the rest of the amount can be recuperated from a third party. The amount depends on the limit of the policy you've purchased.
When to cancel homeowners insurance when selling a house
It's important that you make sure that you do not cancel your 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 canceled, you may be responsible to pay for any damage done to the old property or injuries that occur there.
During the transition to your new home, you can overlap your policy for your old home and your new home if you don't sell your old house immediately. It's better to have overlapping policies when you move than it is to assume extra risks or accrue coverage gaps.
You should also 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. 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.
Home insurance refunds when canceling policy
If you're not going with the same provider for the coverage on your new home, you will be eligible for a refund as long as you paid your premium in advance. One thing to be aware of is your policy term and how far in advance you have paid. If you pay in advance, you'll usually receive a refund for your homeowners insurance once it's canceled. 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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