When Should You Transfer or Cancel Your Existing Home Insurance?

Having the right home insurance can help cover your home and its belongings in the event of an unfortunate mishap. It’s a must if you want to protect your hard-earned assets; but what if you plan on selling the home you have so that you can buy a different one? Can you transfer your homeowners policy from your old home to the new one, or do you need to cancel your existing policy and apply for another one?

How Homeowners Insurance Works?

Your homeowners insurance covers the structure of your home and its contents. It also covers smaller structures like garages, gazebos, and sheds. Your policy should also offer general liability coverage in case someone has an accident on your property. However, there are certain exclusions to the policy. Not all damages will be covered by your home insurance. Floods, hurricanes, and earthquakes require additional coverage. The same is true if you have antiques or other valuables. You may need to purchase additional coverage for specialty items.

Transferring or Cancelling Your Home Insurance Policy

You may think that transferring your current homeowners policy will save you time and money. The problem is that it is unlikely that your new home will be exactly similar to your old one. In most cases, it’s a better option to keep your old policy in place until you turn over the keys for the last time. When it comes to your new home, most banks require that you have a homeowners insurance policy in place when you take possession of the keys for the first time.

Does New York Require a Homeowners Policy?

The state of New York does not legally require a homeowner to have insurance. If you own your home outright, you have the option as to whether or not you want to purchase a homeowners policy. If you have a loan or mortgage on your home, the lender may require you to have a policy in place to protect their interests. If, for some reason, you don’t have insurance in place by the time the mortgage is put in effect, the lender has the right to buy a homeowners policy for you.

When Do I Cancel My Existing Policy?

It’s important to keep your current policy in place until you turn in your keys for the final time. This ensures the home is protected while it is in your possession. Once the keys have been turned in and you no longer have possession of the home, you can then cancel your policy. By the same token, purchase the policy for your new home in advance and have the policy take effect on your scheduled closing date. This way, there is no lapse in coverage on either home. Once you pass off the keys, insuring the home becomes the new owner’s responsibility.

Buying a new home is a unique and complicated experience. Understanding the need for insurance coverage is extremely important so that you are always protected whether you are buying or selling. By working with our reputable agents at Kneller Insurance Agency, you will be able to cover both homes while you transition from one to the other. Contact us today so that we can help you navigate your way through the insurance process.

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