When Should Home Sellers Cancel Homeowners Insurance?

When selling a property, it's important to remember to cancel your homeowner's insurance. However, do not immediately pull the trigger after your home is under contract. Utilize this advice to determine the best moment to cancel your insurance to strike the optimal balance of protecting your property and saving money.

While you're reveling in the excitement of obtaining a contract on your house, canceling your homeowner's insurance coverage will likely slip your mind. However, this procedure stage should not be overlooked, especially because it results in one fewer bill to pay.

However, you'll want to schedule your cancellation carefully, and the moment your home enters contract is not the best time. Even when you vacate the premises, you should maintain the homeowner's insurance as long as the property remains in your name.

Consult with a reputable agent to determine the most effective methods for canceling your homeowner's insurance. Your agent can assist you in creating a cancellation timetable or reminder so that you do not wind up spending more than necessary.

Is it necessary to cancel my homeowners' insurance when I sell my home?

When you relocate, you must cancel your home insurance coverage. It will not transfer to your new home if you purchase another property immediately, as the two properties will have distinct risks and thus require distinct types of coverage. Even a simple relocation across town may result in a significant change in pricing and policy coverage.

It's prudent to wait to contact your insurance agent until your home is under contract and established a closing date. Notify them when you expect to close on the house so they can assist you with the policy cancellation.

Additionally, if you have not yet sold the house, you must notify your insurance carrier when you vacate. When a home is vacant, it is more susceptible to damage, and some insurance companies will only insure it for a certain period before canceling the policy. Ideally, you can remain in your existing house until you have a contract to avoid your homeowner's insurance canceled prematurely.

How do I terminate my homeowner's insurance policy?

In writing, you must contact your insurance agent if you wish to cancel your house insurance coverage. This cancellation letter should include your name, policy number, the address of the property, the desired cancellation date, and your reason for canceling.

If you purchased coverage after the cancellation date, your letter should contain a request for a prorated refund.

It is recommended that you wait until you have a closing date before submitting your cancellation request. Additionally, keep in mind that if you submit a cancellation request and the closing is delayed or the contract fails, you must notify your insurance agent so that the coverage is not canceled.