When you sell your home, it’s often a priority to terminate any expenses connected to the home as soon as possible—including your NY Homeowners insurance as soon as possible. But, canceling your NY homeowners insurance too soon is a much loftier risk than you may think.
Let’s say, while your home is still pending closing, a pipe breaks and floods the home or a tree falls and causes damage to the structure. Not only will this likely be an unexpected and costly event for you as a homeowner, but it can even cost you the sale of the house. So, although you might be prepared to pass the torch the next owner, you are still responsible for the property while awaiting the pending closing. If the empty structure gets damaged or someone gets injured on the property, you, as the legal owner of the home need to be insured. If you are tempted to cancel you NY homeowners insurance as of the set closing date, remember closing dates frequently change, so be wary of canceling your policy based on this.
The average NY homeowners insurance policy covers the structure of the home, any permanent fixtures, and any other structures—like a shed or gazebo—and your personal belongings. A good NY homeowners insurance policy will cover you for accidents on your property where you are held liable and also, to a certain extent, medical payments to guests that may get injured in your home or on your property. In most cases, dependent upon your particular insurance carrier and policy, your home is covered on an “all-risk basis” with the exception being anything explicitly excluded within the homeowners policy language.
Depending on where you are moving next, you may be wondering if you can just transfer your existing NY homeowners insurance policy to the new address. In most cases this is a tough thing to do because the policy will change based on location, square footage, age and composition of the home as well as other factors. On the plus side, you can likely remain with your insurance company unless they do not write policies in the area you are moving to.
While you don’t necessarily need homeowners insurance in NY, most mortgage lenders require that you have a NY homeowners insurance policy. If you don’t meet the requirements specified by the bank or choose to cancel your policy, they will likely force place coverage. Often times, you can work out a payment plan with your lienholder so that your payments include the cost of insurance and/or property taxes. These funds go into an escrow account. However, if your homeowners insurance is not escrowed or you pay the premium directly, you’ll want to reach out to your mortgage company to provide proof of coverage. Similarly, if you are canceling your policy, you may want to reach out to your mortgage company to make them aware of the situation.
Ultimately, you’ll want to hold off on the cancellation of your policy until the closing papers are signed and everything is set in stone. This will avoid any unexpected headaches and ensure that you are protected against losses that might occur during this time period. Once everything is official, contact your New York home insurance company. From there they can direct you on how to cancel the policy. It is advisable to submit documentation in writing stating when you’d like the policy canceled so there are no lapses or gaps in your insurance. It is also important that you provide a forwarding address as your insurance company will want to forward any refund owed to you directly. If your insurance is paid by your mortgage company, they will request the money be deposited into your escrow account.
TSC>Direct has been providing first time home buyers, renters and those living in a condo or co-op association in New York with affordable insurance since 1986. We provide coverage in New York City, Brooklyn, Queens, The Bronx, Long Island, Staten Island, Westchester and Orange counties. Our insurance company communicates directly with our customers and we offer competitive NY homeowners insurance rates. Get a free online quote for affordable homeowners insurance in NY or call TSC>Direct today at 1-800-JOIN-NOW (800-564-6669)!
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