Are you going to be selling your home soon? If so, you should really know how this impacts your home insurance. You don't want to be caught in a situation where you don't have coverage, even if you've moved out of your current home and are waiting for it to sell. Here are a few important things to know.
You May Have Coverage For A Limited Time After Moving Out
Every homeowner's insurance policy is different when it comes to covering a vacant home. That's why it's important to talk to your insurance agent to understand the details of your specific policy. For example, one insurance provider may only give you a month after moving out until you need to purchase a vacant home endorsement, while another company may give you two months. It all depends on what is in your policy.
Your Vacant Home Will Cost More To Insure
You may wrongly assume that a vacant home is going to cost less to insure than your current home, mainly because all of your personal property is gone. However, your insurance provider considers the home more at risk of having a problem due to nobody living in it.
When you occupy a home, you're more likely to catch problems when they are small. This can include a pipe bursting in your basement that causes water to come inside, or calling the fire department if a fire were to happen. A vacant home doesn't have someone there watching it all the time, so the chance of a bigger loss due to an incident is more likely.
Thankfully, you can choose a high or low deductible policy to reduce your monthly premiums and make your home insurance more affordable.
You Have Options For Coverage
Insuring a vacant home will give you some options for the type of homeowner insurance that you want to have. You can get coverage for the replacement value of the home, which means that in a total loss situation where the home was to burn down, you would receive enough money to rebuild the home so it could be sold.
The other option is to purchase a policy worth the actual cash value of the home. This would be the approximate amount the home would sell for. In a total loss scenario, the insurance provider would cut you a check, you'd need to clear the land of debris, and you could then sell the land to a new home builder.