Do You Cancel Home Insurance When Selling Your House? What You Need To Know

If you are planning to sell your house, you might be wondering what to do with your home insurance policy.

Do you need to cancel it right away, or wait until the closing date?

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How do you cancel it, and can you get a refund for the unused coverage? Here are some answers to these common questions.

When to cancel home insurance when selling your house

The simple rule is: *do not cancel your home insurance until the closing is finalized*.

As long as the house is in your name, you are responsible for any damages or liabilities that may occur.

If you cancel your policy too early, you will not have any coverage in case of fire, theft, vandalism, or other perils.

This could cost you a lot of money and even jeopardize the sale of your house.

However, you should not wait until the last minute either.

You should contact your insurance agent as soon as you have a contract and a closing date for your house.

Let them know when you expect to close on the house and ask them to cancel your policy effective on that date.

This way, you can avoid paying for unnecessary coverage and ensure a smooth transition.

How to cancel home insurance when selling your house

To cancel your home insurance policy, you will need to notify your insurance agent in writing.

This letter of cancellation should include your name, policy number, the property’s address, the date of desired cancellation, and your wish to cancel.

You can also request a prorated refund if you have paid for coverage beyond the date of cancellation.

Find a sample letter of cancellation [here](^5^).

You can also use this [online tool](^1^) to generate a customized letter based on your information.

Send your letter of cancellation at least two weeks before the closing date to give enough time for processing.

You should also keep a copy of the letter and the proof of mailing for your records.

What to do if the closing is delayed or canceled

Sometimes, things do not go as planned and the closing is postponed or canceled.

If this happens, you should contact your insurance agent immediately and let them know about the change of plans.

You can ask them to reinstate your policy or extend your coverage until the new closing date.

If the closing is canceled altogether, you should keep your home insurance policy active until you find another buyer or decide to keep the house.

You should also notify your mortgage lender about the situation and update them on any changes.

How to get home insurance for your new house

If you are buying another house after selling your old one, you will need to get a new home insurance policy for it.

Home insurance policies are not transferable from one property to another because they are based on different factors such as location, size, age, condition, and features of the house.

You should start shopping for a new home insurance policy as soon as you have an offer accepted on your new house.

Compare quotes from different insurers online or work with an agent to find the best coverage and price for your needs.

You should aim to have your new policy in place before you close on your new house.

This will ensure that you have coverage from the moment you become the owner of the house.

You will also need to provide proof of insurance to your mortgage lender before they finalize the loan.

when to cancel home insurance when selling?

You should cancel your home insurance after you officially close the sale of your house.

This is because you are still responsible for any damages or liabilities that may occur to the property until the closing is finalized.

If you cancel your policy too early, you will not have any coverage in case of fire, theft, vandalism, or other perils.

However, you should contact your insurance agent as soon as you have a contract and a closing date for your house and ask them to cancel your policy effective on that date.

This way, you can avoid paying for unnecessary coverage and ensure a smooth transition.

If you are buying another house after selling your old one, you will need to get a new home insurance policy for it.

Home insurance policies are not transferable from one property to another because they are based on different factors such as location, size, age, condition, and features of the house.

Conclusion

Canceling home insurance when selling your house is not complicated, but it requires some planning and timing.

Cancel your policy too early or too late, but rather on the closing date of the sale.

You should also notify your agent in writing and request a refund if applicable.

If the closing is delayed or canceled, you should contact your agent right away and adjust your policy accordingly.

Finally, if you are buying a new house, you should get a new home insurance policy before you close on it.

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