Buying a home is a rite of passage for many people. However, it is also uncharted territory for most of them. First time home buyers rightfully have a ton of questions. Issues such as mortgage insurance, taxes, and even home warranties can be overwhelming, especially if you have never dealt with it before. Then, there are the issues of home inspections, utilities, and even repair issues that may come up in the first few months of home ownership.

 

Homeowners insurance questions such as what is covered, how much of a deductible should we carry, and what happens to the policy when we sell the house, will keep homeowner’s in touch with their insurance agent throughout the lifecycle of their homeownership. While most of these questions vary from policy to policy and home to home, the one question that can be answered no matter what type of home or policy you have is what happens to the policy when you sell your house.

 

The Basics of Homeowners Insurance

Unlike some other types of insurances, everything about a Homeowners Insurance policy is specific to your currently insured home. Every little detail of your current home will go into the underwriting of your current policy. Homeowners insurance takes into account:

• The age of your home,
• The amount of money you put down on your home,
• The size of your home,
• The amount of your current mortgage,
• The physical location of your home,
• The cost to repair or rebuild your home,
• And issues that your neighbors may have had with their homes that may be related to the area in which you live, as opposed to the home

In addition, previous repairs, such as a new roof or addition will affect the premium of your Homeowners Insurance policy.

 

Aside from the issues that may affect the premium of your policy, the amount of coverage is also determined strictly on the home in which you have insured. You would not insure a home that is appraised at $250,000 for $1,000,000, as that would not be appropriate. It would be unnecessary coverage. However, if your home is in a wealthy neighborhood, it will be costlier to insure than a home in a middle-class neighborhood, even if the appraisal is the same amount. For these reasons, your Homeowners Insurance policy is specifically tailored to your particular home and is not interchangeable with any other property you may own.

 

Out with the Old, In with the New

Since your Homeowners Insurance policy is specific to the home in which you live, it will not transfer to a new home once you sell your old home. It also will not transfer to the new owners, as they will have different answers to many of the above questions. Therefore, when you are selling your home, you need to notify your Homeowners Insurance company that you will be selling your home.

 

You should be in contact with your agent from the moment you put your home on the market. This will allow your Homeowners Insurance agent to guide you through the process of canceling the policy, getting a refund on any premiums paid in advance, and setting up a policy for your new home.

 

It is important to explore the idea that you may have overpaid premiums on your policy. While many people include their Homeowners Insurance premiums in their monthly mortgage payments, some people may choose to pay the policy in full at the beginning of the year. Sometimes, mortgage companies will even pay three months of the premium at a time. You must determine how much of your premium has been paid and whether you have lived and owned the house throughout the entire payment cycle. If you have left the house and sold to another person with excess premium payments, you are entitled to a refund of that money.

 

It is also important to explore the idea that a new carrier may be necessary for your new home. While you may have had a good premium for the home in which you lived, moving to a new home means a new zip code, street location, and a new home size. All these factors may increase the premium through your current carrier, making them costlier. There may be another carrier that is more suited to insure homes in your new location. Shopping around will help you obtain good coverage now, hopefully for a good, low rate for your new home.

To learn more about Homeowners Insurance for your new home, contact our team at www.protectiveagency.com  Or call (877) 739-9367. Our licensed insurance agents will be happy to answer any questions you have.