For most people, buying a house is a lifelong dream. One of the most significant expenses of homeownership is homeowners insurance. A homeowners insurance policy is insurance coverage specific to your home. Many people prefer to cancel their homeowners’ insurance policy when they sell a house. Several things will happen to your homeowners’ insurance when you sell your house, including:
Cancellation
A standard action that homeowners take when selling their house is canceling their insurance policy. There are several reasons for this; for one, you cannot transfer a homeowners insurance policy to a new property, and you cannot pass it on to the new homeowners, which usually leaves only one option: cancelling the policy.
A homeowner’s insurance policy will consider various factors, including the home’s value, the mortgage, the cost of repairs, and other issues. These factors will be different depending on the homeowner; hence a new policy is typically necessary.
Find a New Policy
You will have to look for a new insurance provider for your home. Take the time to review homeowners insurance quotes to find another suitable policy. Once you move into a new house, you will need to find a new homeowners insurance policy. You can compare quotes from various companies to get the best rate available. If your old insurer was particularly expensive, then it’s time to shop around to see what other offers are available.
The period of switching insurance policies is usually quick. Your new insurance policy needs to be in place by the time your home sale closes, so as not to raise any red flags with either party or affect them signing.
Ask for a Refund
You have to pay premiums for a homeowners insurance policy. Some people will pay the total amount of the coverage in a single installment, while others will pay for them in monthly installments. Regardless, you might find that you have a significant premium overpayment of premiums when selling your home.
In such a case, you can ask for a refund to redeem the overpayments on your insurance policy. The insurance company will try to pay as little as possible, but it is your responsibility to ask and pursue a refund.
Transfer Your Policy
You may transfer the homeowners’ insurance policy to the new homeowners or a new home in special circumstances. It will primarily depend on the terms included in your insurance policy. There will be many factors to consider, including the new home’s value, location, and condition.
If you can transfer your homeowners’ insurance policy, it is usually in your best interest to do so. Otherwise, you will be forced to cancel the policy and purchase a new one. It will take much due process to transfer a homeowners insurance policy, but it is often better.
Contact Whipple Title today!
No matter the situation, make sure to study your current policy terms to determine your options when transferring or enlisting a new insurance policy. If you have questions or concerns, contact us today, and we can help! Whether buying or selling, we have the tools and expertise to help you through the closing process!