Are you thinking of putting your house on the market and relocating to a new home? Be careful – you could be unknowingly putting your finances at risk. A house is one of the largest purchases the average person will make, and most owners are careful to acquire and maintain homeowners insurance that protects that investment for the duration of property ownership. However, despite keeping your insurance until you turn the keys over to a new owner, you might not be covered against major risks. Click here to continue reading and find out more about the limitations of homeowners insurance when you are selling your home.
Does Homeowners Insurance Cover a House that is for Sale?
Only a thorough review of your existing homeowners insurance policy will reveal the limitations of your coverage; however, many insurance companies include exclusions of coverage for houses that are either unoccupied or vacant while on the market. That means that most homeowners who remain in their homes until they are sold are generally safe from these exclusions. Those who choose to relocate early, on the other hand, may be more vulnerable to risks and liabilities.
When a home remains unsold and is either vacant or unoccupied for several months or years, it becomes a nuisance to both the owner and the insurer. According to Bankrate and Illinois Department of Insurance director, Michael McRaith, a property owner is much more likely to file a claim on a vacant home than one they occupy. There are many reasons for the increased risk, including higher rates of vandalism as well as increased risk of trespassers, such as neighborhood children, becoming injured while exploring the property. For that reason, it is not uncommon for an insurer to exclude certain coverage for certain perils or even drop the policy altogether when a property is either vacant or left unoccupied.
Finding Homeowners Insurance when Your House is for Sale
It is important first to note that every homeowners insurance policy is different, and the circumstances surrounding vacancy coverage exclusions will vary. Also, the definition of a vacant or unoccupied property will vary from insurer to insurer, though the industry standard is approximately one to two months of vacancy. That means that many homeowners who remain in their homes until they are under contract will still have coverage until the completion of the sale.
If you are planning to sell your home and leave it either vacant or unoccupied for any period of time, do not do so until you have first reviewed your insurance with a trusted agent. An agent can help you determine if vacancy exclusions apply to your property and explain your obligations as a policy-holder when you relocate to a new home. For example, you may be required to notify your insurer of a vacant home or else face charges of insurance fraud should you try to file a claim.
At our office, we have a team of professionals who are trained to spot vacant home coverage exclusions that could leave you on the hook for damages to your property. We can examine your existing policy and plans for relocating to determine whether vacant home insurance could be right for you. For more information or to request your quote, contact our office today. We look forward to serving you soon.