Selling your home can be a very stressful experience for various reasons. Moving is the most common among them, as is the sale of your home and everything that goes along with it. Given how much is happening during this critical, albeit temporary, part of your life, it can be too easy to overlook some of the crucial tasks associated with selling your home and moving out.
Most homeowners do a decent job of finding and working with a real estate agent to get their home ready for sale. They also tend to do a great job of canceling their utility accounts and other bills tied to their old home once the sale closes. Where many homeowners typically fall short is in the handling of the little things associated with a move, like canceling or revising their homeowner’s insurance policy. Unfortunately, forgetting to do so can cost you some of what you may have just earned on the sale of your home. Here’s how to save yourself as much money as you can by handling your policy correctly as you get ready to move.
When to Keep or Cancel Your Insurance
Knowing the best moment to cancel your homeowner’s insurance policy can be tricky. Canceling too late may result in penalties and canceling too early could be dangerous. Many homeowners get anxious as the sale of their home is finalized, so they look for ways to accelerate the process either directly or by proxy.
Once the ink is on the page and it looks like everything is good to go, it can be very tempting to start cutting things loose, but this can be a costly mistake. If something happens to the “done deal” and the funds are rescinded by the lender, or the buyer backs out for some other reason at the last minute, it can cost the seller a considerable sum to get their homeowner’s policy reinstated.
Further, it can cost significantly more if something happens to the property (or someone visiting it) with no policy in place. For this reason, if for no other, most experts recommend waiting until the buyer’s funds hit your account before you cancel or transfer your existing policy.
Can You Take Homeowners Insurance With You?
While you won’t be able to simply move your existing coverage over to a new home for obvious reasons (it’s not the same home, not the same value, and not the same risk), your insurance company may be able to transfer your account to your new home and write you a similar policy, at a similar cost, for the new property.
If they can’t do this transaction for you, then they may have a partnering agency or company that can. It never hurts to work those referrals so you can find the right policy at the right price for your new home.
Communicate With Your Agent for Extra Fun and Profit
For this reason, it makes great sense to have a frank discussion with your insurance agent prior to listing your home. Having a plan in place – one that accounts for contingencies such as failing to secure a new home until after the sale of your current home concludes, or having the policy on your new home affected by wildly different state or local laws – can be accounted for in advance. The best news is that this can potentially save you a considerable amount of money.
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