Home Insurance When You're the Seller
Understanding your home insurance coverage is essential - especially when selling your home. You’re probably thinking since you’re selling your home, you can cancel your home insurance, but you’d be wrong. If there’s damage to your home before you make it to closing, you’ll end up feeling the financial burden. And your home insurance won’t be there to help!
Why Should I Keep My Home Insurance?
Suppose damage does occur to the home after you’re under contract. The contract will allow the buyer to cancel or continue the purchase but collect the insurance money. If the home insurance has lapsed, you might risk a buyer canceling the contract, leaving you with damaged property and no insurance money to repair the damage.
If you plan on living in the home until closing day and the home insurance is a part of your monthly payment, you must keep paying your mortgage or pay the bill in its entirety if it’s up for renewal.
If you pay home insurance with your mortgage into an escrow account, everything left in that account will be refunded to you, typically within 1 - 2 weeks after closing. Contact your mortgage servicing company to be sure.
What if My Home Is Vacant?
Many sellers move out before their home is listed. They may also transition to a new home while it’s on the market or before closing. This may significantly impact how the insurance policy will cover a loss. Almost all policies have limitations and exclusions for losses that occur while a property is unoccupied or vacant. The same goes for landlord properties that are typically tenant occupied.
Most policies have limitations or exclusions that will apply to theft or vandalism losses while a property is vacant. Unfortunately, theft of copper wiring and other valuable building materials from unoccupied properties is rising, and repairs for such losses can exceed tens of thousands.
Another common loss is water damage from frozen and burst pipes. Preventative steps like leaving faucets dripping may be overlooked if your home is vacant. This type of loss may be excluded from an insurance policy because the owner is at fault - especially if the home is vacant.
What Are the Possible Consequences of Not Having The Right Home Insurance?
Worst case, coverage can be denied if the property was vacant for a specified period. For some policies, that time frame might be as little as 24 hours or 30 to 90 days. Some companies might offer a rider or endorsement, which can be added to your policy contract to include coverage while the property is vacant or unoccupied. But if you know that your property is going to be vacant for an extended period, taking out a policy with a carrier that specializes in coverage for vacant properties is ideal.
Seller’s Home Warranty
Ask your agent if they offer any home warranty coverage while your home is on the market. eXp Realty provides, together with America’s Preferred Home Warranty, a basic and an enhanced listing warranty. This will help you if covered systems and appliances stop working while your house is on the market.
A lot can happen between listing your home for sale and making it to closing day. Even though there’s plenty to do when selling your home, you must speak with your local insurance agent to ensure your insurance coverage will apply to your specific occupancy arrangement!
Are you looking to sell your home? Do you know what your home is worth? To instantly get a detailed home price estimate, CLICK HEREromidtsund.exprealty.com/seller/valuation/