Moving is an exciting and stressful time! Selecting your new home and selling your old one takes time, lots of work, and so much paperwork.
Figuring out your insurance policies – What happens to your insurance policy when you move? Can you transfer your policy to your new home? If you need to cancel it, how do you do that? Do you receive a refund?
What happens when you move?
Your insurance agent is not notified about your move. Unless you notify your agent, nothing happens! Call your agent about a month before you move to let them know when you are moving and plan what happens to your policy.
The homeowners policy on your current home covers your belongings while they are being loaded into the moving truck. A portion of your contents coverage will transfer to your belongings if they must be placed in storage.
Once your home is no longer occupied, you need to call your agent and change the policy from a homeowners policy to a vacant home policy. If you keep your homeowner’s policy while your home is vacant you may not have coverage for claims because you do not live there.
When you talk to your agent ask about your policy term. The home insurance policy is a one-year contract, when the contract expires can affect your refund amount and how you want to handle the cancellation or transfer.
Can you transfer your policy to a new home?
Unfortunately, no homeowners policies are not transferable to a new location. The policy is rated on your home, it’s value, age, and location. Insurance companies cannot rate a policy change to a new location.
Your insurance company may give you a discount if you place your new home on a policy with them. Many companies will give you a renewal or transfer discount when you are moving and must write a new policy.
It is important to talk to your agents for both of your home policies and make sure they overlap and provide coverage for your belongings while in transit or in storage.
How do you cancel your policy?
Most insurance companies require policy cancellations in writing. Once you have decided the date you need the policy canceled contact your insurance agent and they will let you know how to proceed with the cancellation.
When you cancel your policy ask your agent if there are any cancellation fees or penalties. Some insurance agencies and insurance companies charge cancellation fees regardless of the reason for cancellation. Verify what is being charged before you cancel.
Your current homeowners policy needs to remain active until you no longer own the property and your new homeowners policy is in force. Overlapping the coverage by a day or so can offer additional protection on your belongings and liability.
Will I receive a refund?
It depends! Insurance policies are a one-year contract, but insurance companies offer multiple payment plans. If your policy is paid in full you will receive a pro-rated refund for the time remaining on the policy. If you are on a payment plan the insurance company will figure the credit for the amount of your policy you didn’t use, review how much you have paid in, and you may receive a refund.
Your refund will be issued in the same form you paid your policy. If you mailed a check, you should receive a check. If you paid by credit or debit card, you should receive a credit to the same card or account. If you need to change how the refund is issued ask your agent when you cancel.
Make sure to update the mailing address on your old homeowners policy so your refund and any paperwork comes to your new address. You want to keep any paperwork on your old policy for tax purposes.
If your mortgage company pays the premium, the refund could be issued to them. Some insurance companies issue a refund to whoever paid the premium. Ask your agent when you cancel how your insurance company handles the refund.
