What type of home insurance do you need when selling a house?

What to know about insurance coverage before you list your home. (iStock)

Selling a home can be just as stressful as the purchase, particularly as a first-time seller. One often overlooked area is home insurance. The big question: does insurance coverage need to change when someone goes from owner to seller?

It's always important to ensure your home is properly insured, as policies are very nuanced and can vary by insurance company. Credible simplifies the process, breaking down types of homeowners insurance coverage and giving you the chance to get free quotes from multiple insurance brokers.

What home insurance do you need when selling your home?

Most home insurance policies cover accidents, damages, and losses to the dwelling and the contents within the home. Additionally, most home insurance covers liability for any personal injury that occurs to others while on the property. If you're in the process of selling your house, this amount of coverage is more than sufficient.

Brian Haney of The Haney Group, a financial firm with insurance expertise, encourages homeowners to review coverage annually, whether they are selling or not. “The selling price (fair market value) minus the land value is usually the base value insurance companies use to determine coverage. If a homeowner has new special features or more costly materials in the home, they should consider what it will cost to rebuild and increase the coverage accordingly.”

Homeowners can explore pricing and find the right home insurance plan​ that fits their needs on Credible.

Homeowners who have already vacated their property will need a different type of insurance: the vacant home policy.

A vacant home policy can either be added as a rider on your current homeowners’ insurance or as a stand-alone policy. Before you buy additional coverage, however, it’s important to double-check the language in your current policy. Some policies may require vacant coverage 30-days after move-out, while some will go up to 60 days after a home has been vacated.

In a home seller’s market, two months may be more than enough time to offload the home without the purchase of an additional policy.

3 THINGS YOUR HOME INSURANCE POLICY SHOULD COVER

When should I cancel my existing home insurance?

Say you’re planning to build a custom home and decide to move in with family while the home is under construction. Wouldn’t it make sense to cancel your homeowners’ insurance on moving day? Not necessarily. It's important to maintain insurance up until the point the ownership of the property has been transferred.

Before canceling your homeowners insurance, reach out to a broker who understands insurance policies and can help you determine what coverage you need. Credible can connect you to experts with the click of a button.

DO YOU NEED HOMEOWNERS INSURANCE?

What type of homeowners insurance coverage should you get?

For most, dealing with homeowners’ insurance during the sale of a home is a fairly straightforward process, but there are a few times when it makes sense to add additional coverages.

If you are making any improvements to your home while you are preparing to sell, it is important to notify your insurance carrier about the changes in order to maintain proper coverage (if you have added new appliances or updated any features of the home this may require more coverage in case of any damage).

Updating your coverage is the perfect time to shop multiple insurance companies. Comparing quotes is important, but it can take time. With Credible's partners, ​you can eliminate the time-consuming part of your search​.

HOW MUCH DOES HOME INSURANCE COST?

How can I save money on home insurance when selling a home?

You’ve heard of comparison shopping for interest rates, but you should do it for homeowners’ insurance too – whether you’re buying or selling. Not every insurer offers the same amount of coverage for the same price, so it is important to shop multiple companies to ensure you’re getting the best deal and saving the most money while protecting your largest financial asset.

To make sure you are not overpaying for homeowner’s insurance, ​it’s free to check online through Credible’s partners.

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