Most homeowners usually have many questions about home insurance, especially when buying their first home. However, one crucial question that homeowners and potential homeowners usually forget to ask is what happens to their home insurance when they sell the house.
In this article, Beacon Point Insurance explains how selling your home will affect your home insurance and everything you need to know about selling your insured home.
What Happens to Your Home Insurance When You Sell Your Home?
If you are still living in your home while trying to sell it, your homeowner insurance will cover you and your personal properties until you sell the house and the buyer takes over. This means that your home insurance is valid until you close the sale on your home.
However, if you are not occupying the home at the time of the sale or you’ve already moved your personal belongings, you’ll need to buy vacant home insurance to protect the house before someone buys it.
You may also need to buy a vacant home insurance policy if the home you’re selling is not your primary residence and has been vacant for a long time or if you’ve left it unoccupied for a long time before deciding to sell it.
After selling your home, you’ll need to cancel your current insurance policy, as the home now belongs to a new family, and they will be responsible for its insurance and other needs.
It is important that you inform your insurance agent when you decide to sell your home so they can direct you on how to cancel your policy. They will also inform you if you have any premium paid in advance and work with you on getting a refund.
As you prepare to sell your home, you should also be shopping around for a new insurance company for your new property if you do not wish to retain your current agent.
When is the Right Time to Cancel Home Insurance When Selling Your Home?
The best time to cancel your home insurance when selling your home is when a buyer has closed the sale.
You must remember that your home remains your property and responsibility until you sell it and the new owner takes over. So, you must retain your insurance and protect your home until it is no longer yours.
With so many people coming to check your home during inspection, a lot of things could go wrong when selling a home. For example, If someone suffers any injury on your property during inspection, you’ll be responsible for their medical and rehabilitation expenses.
Homeowner insurance covers any damage or liability costs on your home until you finally sell it. This is why you should retain your policy until the sale is complete. Remember that a buyer can back out of the sale anytime, so be careful not to cancel your insurance too early.
When you are ready to cancel your insurance, you can simply call your agent and inform them of your decision to move, and they’ll guide you on the steps to take.
Can You Sell Your Home Without Insurance?
You do not need home insurance to own a home in the US, except if your lender requests it. In the same vein, you do not need home insurance to sell your home, especially if the house is not on mortgage.
However, selling your home without insurance is financially risky, as you’ll be responsible if anything goes wrong with the house during the sale. Home insurance will cover all insured damage in your home, saving you from covering the cost from your pocket. But if you don’t have insurance, you’ll be responsible for any damage, even as small as a faulty faucet.
Also, remember that it’ll be too late to purchase insurance after damage has occurred since insurance companies don’t cover existing issues. So, it is better to protect your property and yourself by buying home insurance or vacant home insurance when selling your home.
Can You Transfer Your Current Home Insurance to Your New Property?
Your home insurance policy is not transferable. This means that when you sell your home, you cannot transfer your policy to your new home. Since your new home is in a new location, under different policies, conditions, and usage, you need to purchase a new policy that suits these conditions.
Also, you cannot transfer your policy to your buyer. Instead, you’ll have to cancel your current insurance policy, and the new owner will purchase the coverage that suits their needs.
What is Auto Insurance and How Does It Work?
Like homeowner insurance protects your home, auto insurance, also known as car insurance, covers your car and protects your financial loss when it suffers any damage.
However, unlike home insurance, auto insurance is compulsory, and no one can drive in the US without the right insurance coverage. In fact, if you are caught driving without vehicle insurance, it can result in a fine, license suspension, or jail term.
Vehicle insurance protects your financial stress when your car suffers damage, gets stolen, or is involved in an accident. It also covers the liability costs if someone suffers injuries while in your vehicle or an uninsured driver injures you.
While coverage may differ depending on your insurance company, your auto insurance should cover certain occurrences like liability, medical bills, collision, uninsured motorist bodily injury, and property damage.
Most insurance companies like Beacon Point Insurance can bundle your home and vehicle insurance into a single package, which helps you save money and manage your policies easily.
About Beacon Point Insurance
Beacon Point Insurance is the best home insurance agency in Independence, Missouri, providing reliable insurance services in Kansas City and surrounding areas. They have experienced agents committed to providing you with valuable information and helping you get the best coverage at the best price.
Beacon Point provides many insurance policies for individuals and businesses, such as homeowners insurance, auto insurance, flood insurance, boat insurance, workers comp insurance, and group health insurance.
For more inquiries about their services, contact Beacon Home Insurance at 816-254-6100 or visit their website.
