Selling Your Home? What You Need To Know About Your Homeowners Insurance
Are you trying to decide if now is the right time to be selling your home? Well, it is true that not many business sectors can claim to have rebounded more successfully over the past several years than the real estate market has.
In 2012, housing prices across the U.S. hit rock bottom. Now, just five years later, prices are soaring in many parts of the country, including Massachusetts and Connecticut, open houses are packed, and bidding wars are commonplace. With low housing inventories likely to continue across much of the region, many homeowners like you are thinking that this could be the right time to put your house on the market and actually turn a profit.
Whether you’re still considering if you should test the market or you’ve already signed the contract with the real estate agent, the Bearingstar team is committed to being one of your close advisors during this exciting time in your life.
Why would your insurance agent want or need to be involved when you are selling your home? We’re glad you asked because that is exactly what this blog on Homeowners Insurance is all about. In fact, it’s extremely important to communicate your housing plans to your insurance agent, to work with them to ensure that your personal belongings have the proper coverage no matter where you are living, and to smartly transition your homeowners insurance coverage when you do close the sale.
Know How Your Insurance Can Work For You When You Are Selling Your Home
It may very well be a seller’s market, but that doesn’t mean that the selling process is going to be easy. Your local Bearingstar Insurance professionals understand that this venture may take a good deal of your time and energy. You are going to have a lot on your plate, from finding the right listing agent, to readying your home inside and out and always keeping it clean, to relocating any pets while this mayhem is going on. Next, you will be receiving purchase offers and negotiating, scheduling appraisers, and cooperating with home inspectors. Finally, if all goes well, you will be signing title, escrow and all documents to complete the sale.
One thing that is easily overlooked in all of this activity is what you should be doing with your homeowners insurance every step of the way. At Bearingstar Insurance, we work hand-in-hand with our homeowners as they go from owning a house to moving out to finding a new residence. We make sure that their home insurance, and other personal insurance solutions, adapt with their changing needs and offer critical protection in the case of any unexpected events, including fire, theft, breakage and more.
In the spirit of always educating our clients on their insurance options, we would like to share with you some general recommendations for managing your homeowners insurance policy through a few of the most common stages of selling your home:
Stage I: You’ve Put Your House Up For Sale
You’ve posted it on social media, it’s listed on the MLS, and, of course, there is the “This May Be Your New Home” sign in your front yard. Looks like everything is taken care of, right? Well, maybe not. Now would be a good time to contact your local Bearingstar Insurance team to let us know that your home is on the market. It’s important for us to get the heads up about your plans, and not just the fact that you are selling your home, but also where you plan to move to. This way, while you are focused on all the things you need to do to sell your home and move somewhere else, we can be poised to offer you the proper insurance solutions for your specific needs when the house is under contract or you have an official moving date.
After you notify us of a pending home sale, your Bearingstar agent will regularly check in on you to find out how the selling process is going and where you are looking to move so we can ensure that you do not overpay for your home insurance. You would be surprised by how many people forget to contact their insurance agents to switch or cancel their homeowners insurance when their house sells. So, let us stay on top of this important task for you and make the transition really easy for you. Not to mention, at Bearingstar Insurance, we are connected to a lot of people in Massachusetts and Connecticut, so we may even know a client looking for a home just like yours!
Stage II: Woohoo! Your House Is Sold
Given the market today, this may happen sooner than you expect, and are even prepared for. In fact, the National Association of REALTORS® published an Existing Home Sales report for May 2017 that showed the median days on market for an MLS-listed home was 27 days, which is down from 29 days in April and 32 days a year ago. This is the shortest timeframe since the NAR began tracking these statistics back in May 2011!
With an eager buyer wanting to move the process along as quickly as possible, Bearingstar knows that you’ll have a lot of responsibilities to take care of to ensure the closing goes as scheduled. Among the many details, don’t delay in contacting your local Bearingstar professional to let us know your home is under contract and the expected closing date. With that information in hand, we will then notify your insurance carrier, provide your new address, confirm the appropriate date for the coverage to end, and facilitate any refund that you may be owed.
If you are moving to a new home, your Bearingstar agent will gladly go to work for you transitioning your insurance, which is not as simple as just changing the address on your policy. Our team does due diligence to find out everything we can about the residence you have purchased, including the new home’s value, the type of dwelling, and the square footage of the property. All of these factors, plus your home insurance policy history, will be considered as we seek out the best insurance carriers for your needs and request new quotes for your homeowners coverage. You can count on the Bearingstar team to find you a new policy that offers the best value without sacrificing the coverage you require and the customer service you desire.
This may also be an excellent time for you to discuss what extra protection Bearingstar and our partners can offer you for the systems in your new home. For example, Massachusetts homeowners may want to consider Home Systems and Service Line Protection Coverage. This is an increasingly popular endorsement among our Bay State personal insurance clients because it provides up to $100,000 coverage for damage caused by a sudden and accidental mechanical or electrical breakdown for systems and equipment such as central air conditioning, water heaters, solar energy, well pumps, radiant floor heat, furnaces and heat pumps, pool and spa pumps and more. Plus, it provides up to $10,000 for repair or replacement of service lines.
Finally, since Bearingstar Insurance serves Massachusetts and Connecticut homeowners, we hope to continue to be your insurance partner if your new home is in these states. However, if you are leaving the area and will be cancelling your homeowners policy, the same early notification process still applies – please give us as much advance notice as possible so that we can make sure to cancel the policy in a timely manner. It’s important to know that, should your policy be due to renew at the same time you are moving out, it will not automatically be cancelled. You must call Bearingstar to let us know that you do not want to renew your policy.
Stage III: You’re Moving Out
Whether you’re a DIY mover, or you’ve hired professionals, or you’re planning on some combination of both, it’s very important to reach out to your insurance agent to discuss what your own home insurance will cover during the move, and what it will not.
In addition, it’s critical that you know exactly what is being moved out of your old home and into your new place of residence. One way to do this, according to Moving.com, is to take lots of pictures. Or, better yet, make a video of your belongings, especially any valuables. Get close-ups of any serial numbers or other identifying details and then keep a backup of this documentation somewhere outside of the home – an online storage service is perfect. Yes, this will take some effort and time, but know that this will make it much easier to file a claim if anything is broken, lost or stolen during your move.
Once you know what you are moving, but prior to putting even one piece of furniture in the moving van, it’s critical to work with your Bearingstar agent to ensure that all your belongings will be properly covered in transit. If you’re moving with the help of professionals, then it’s important to understand that your homeowners policy will not pay for any damage done to your personal property while in the care of these hired movers. In other words, if your HD television is delivered to your new residence with a crack across the screen, you could be paying for a whole new T.V. out of your own pocket, unless you and your insurance partner have discussed the following:
- The Moving Company’s Liability: According to the U.S Department of Transportation Federal Motor Carrier Safety Administration, all moving companies are liable for the value of any good they transport. However, if you want full value protection for your items, this will cost you extra, and it is still up to the mover’s discretion whether they will repair, replace or make a cash settlement for any damaged items. Your other option is released value. This adds no extra cost to your move but significantly reduces the amount your moving company has to pay in the event of breakage.
- What Your Homeowners Policy Provides: Spending some time with your Bearingstar agent prior to making any moving decisions could save you a lot of time and money should anything disastrous happen during the move. We will be able to share with you what, if anything, your current policy provides for coverage for your personal belongings when moving from one home to another.
- Coverage For Breakage: So how do we take care of that T.V. issue and any similar damage to other personal items? Talk to your Bearingstar agent about optional Special Perils Contents Coverage that will cover breakage of all but the most fragile items. If you have high value collectibles, china, vases, fine art, and more, then it will be important to have them appraised prior to your move and work with the Bearingstar team to schedule them on a Scheduled Personal Property/Fine Arts floater with optional breakage coverage added. The same goes for any expensive jewelry. If you don’t already have a special endorsement for items like these that you own, then this would be a great time to investigate buying one.
One last important note about moving day; please don’t forget to take your homeowners insurance with you! Whether you’re moving into a new home, temporary housing, or a rental property, you will want to continue some form of personal insurance coverage to protect you, your loved ones and your belongings.
Stage IV: Alas, Now You Are Juggling Two Homes
What if you find your next dream home before you can find the right buyer for your current one? Well, there are a lot of things to consider in this scenario, but there is only one item that we can expertly guide you through and that is what you need to do about your homeowners insurance policy should this situation occur:
- Insurance For Your House For Sale: You’ve moved out all your personal possessions and turned off some, or all, of the utilities, so this home is now considered vacant. However, each insurer has their own rules on how long a house can be unoccupied before they will cancel your homeowners insurance, or require you to get a special endorsement or a separate, new home insurance policy. Why would insurers do this? Because whenever a residence is empty, there is a much higher risk for damage. For example, if the plumbing backs up or the roof springs a leak, the result can be far more damage than normal because there is no one around to shut off the water or call an emergency repair service. Despite real estate agents and potential buyers coming and going regularly to view your home, it is now uninhabited and wise to work with your Bearingstar agent to find out more about any special insurance requirements for your vacant home as well as the various ways – like having a house sitter – that might lower your vacant home insurance rates.
- Insurance For Your New Home: It probably goes without saying that you need insurance for your new home as well. As we discussed above, this is the perfect time for Bearingstar to carefully review your current homeowners policy, your rates and discounts, and perhaps find a different carrier that can offer you the same or better insurance coverage at a competitive price. Your Bearingstar agent will also use this opportunity to review with you what your homeowners insurance policy covers and, more important, what it does not, from dwelling, to contents, to liability, and make sure that you are taking advantage of additional cost-savings, such as bundling your auto and home insurance with one carrier. We work with multiple carriers, including our parent company, the Arbella Insurance Group, to find you the best home insurance solutions to fit your specific needs and budget.
Bearingstar Insurance Wants To Be Part Of The Team Selling Your Home
We understand how much work it takes to put your house up for sale, pack up, move out, and find a new place that feels like home again. If you add us to the team that is selling your home, we will do everything we can to relieve you of some of that stress and help you with the insurance-related responsibilities. As you move through the selling process, you can count on your local Bearingstar Insurance professionals to answer your questions, listen to your concerns, and facilitate all your insurance needs every step of the way.
When you partner with us, you will have access to thoughtful advice, from knowledgeable agents, on the optimal personal insurance solutions that will provide affordable coverage no matter where you are now and where you are going. Contact a friendly agent near you at any one of our 18 convenient locations across Massachusetts and Connecticut. We will ensure that even as your situation changes, and then changes again, you, your family, and your personal belongings will always be protected.