When you’re in the midst of a home sale, your to-do list seems never-ending, which is why homeowners insurance may be at the bottom of your list — or not on it at all. But that is a common mistake that could cost you a lot of money. Here are some tips to make sure you’re properly insured when it’s time to sell your home.
Inform Your Insurance Agent
There’s no time like the present! Once your house is listed on the market, put a call through to your insurance agent to let them know you’re in the process of selling. Your agent can walk you through what you’ll need to do in preparation for your home sale, as well as advise you if you’re planning on purchasing a new home at the same time. If you’re moving out of state, your agent can even help you locate a trusted agent in your new area to make sure your insurance needs are handled properly.
Don’t Cancel Too Early
Selling a home is stressful, but don’t let your desire to get it done quickly lead to a gap in coverage. Always wait until the paperwork is signed to cancel your policy. If you cancel your policy and something happens to your home before closing, you could be in for costly repairs or have the sale fall through altogether. The cancellation can be backdated to the date the home is officially closed by providing your closing documents, so it only makes sense to wait until after the closing to cancel your policy.
Document and Catalog
Among the many tips for selling your home, the organization takes precedence when you’re getting your place show-ready. As you sort through items, create an inventory of your household goods, if you’ve not already done so. If creating a list is too cumbersome and time-consuming, photograph your home, or conduct a walk-through while recording a video. If you have the time, it’s extremely beneficial for you to photograph or record serial numbers on your valuables. On the off-chance that something happens to your home goods during the moving process, your well-documented inventory will make the claims process smoother.
Ensure That You’re Insured
Another reason why you want to communicate with your insurance agent is so that you know whether your home goods are covered for your move. If you’re using a professional moving company, then you should know that your items may not be insured under your homeowner’s policy in-transit, but are the responsibility of your movers (Talk to your agent to discuss the specifics of your policy). Your agent can guide you in choosing the insurance options that make the most sense with your moving company.
This is also a good time to talk about different types of personal property protection (replacement cost v. actual cash value) and scheduling valuables on your policy. In fact, a discussion with your agent could uncover that you’re underinsured and put you on the right track for adequate coverage. Your agent should be able to tell if you have the proper endorsements to be fully covered in the event they are residing elsewhere.
Overlap
Many people find themselves in a situation where the closing dates for their home sale and new home purchase don’t coincide, which means they may find themselves owning two homes for a period of time. Again, this is important for your insurance agent to know, especially if you’re moving into your new home before you close on the sale of your current home.
Insurance companies often have different guidelines and coverages for homes considered vacant — which your home will be if you’re moving out before closing. Vacant homes carry higher risks, which is why many insurers have a clearly stipulated time period of vacancy before a policy is canceled; you may need to get a different or new policy to cover your home in the interim. When in doubt, call your agent.
No Transfers Allowed
If you’re purchasing a new home after you sell, you should know that homeowners’ insurance policies are not transferable, so make your agent aware of your plans to avoid any unexpected delays. Home insurance policies are specific to the home being insured, and take into account everything from the age of the home to the materials used to construct it. Allow enough time to have your new policy drafted by your insurance agent and you’ll be set to close on your new home.
Read the guide to Homeowner’s Insurance Coverage & Common Claims for more information on homeowners insurance.
We’re here to help you protect what matters. Call Texan if you have any questions about homeowner’s insurance!
