Outgrowing a house is common, and quickly followed by the many to-do’s – home renovations, staging, and listing. You’re also shopping for your new home – narrowing your choices between the semi and fully detached, selecting what’s more important: the school or proximity to the grocery store, and it’s all on top of your everyday living. What a whirlwind!
With that in mind, preventing a catastrophe, especially in these hectic and hassle-filled times, you must consider your insurance needs. Insurance protects you from the sudden and unexpected. If there is a time when you don’t want anything to go wrong, it’s at this critical juncture.
Why insurance matters when moving
Home insurance isn’t government regulated or mandatory, but your mortgage lender requires it. Many of us don’t even look at our policy, considering it a necessary expense. Moving is a great time to review your policy and re-educate yourself. Take time to speak with your insurance broker to not only ensure you’re covered for the unexpected, but to learn of any potential changes to your policy that a move may bring about.
Location, for instance, is a significant factor in your home and auto insurance rate calculation.
If you’re moving to an area with lower vandalism or theft, your rates may go down. Your rates may rise when you’re moving to a bigger home on the water. A bigger home typically has a higher replacement value, so there’s more to insure. Closer to water increases the likelihood of overland water seeping in, so you’ll likely want to add a flood insurance endorsement to your new policy. Any additions to an existing policy will cost more, but a safer, more up-to-date house could cost less.
Should anything happen to your home during the move, it’s important to know how a home insurance policy works. It covers the building, detached structures (i.e. shed), your belongings (contents insurance), and liability (in case someone injures themselves on your property).
For your move, your home insurance protects your home from any mishaps that might otherwise result in a deal falling through. For example, if you forget to lock your door and burglars enter your home and spray paint the walls, your home insurance can pay for the new paint job. Know that if you’re moving any valuables yourself, and they’re stolen from your car, it’s your home insurance that will pay to replace those items.
So, when you’re moving, take a moment to shop around and compare quotes for home insurance to make sure you’re not overpaying or underinsured. You don’t want to be caught off guard.
It’s similar when shopping for a car insurance quote. If you’re moving to an area with higher reported levels of theft, vandalism, or collisions – expect to pay more for car insurance. There are also benefits to moving. If you’re now parking in a secure private garage and walking, instead of driving, because you’re closer to work – expect to see a reduction in the price you pay for insurance.
Pro tip – when finalizing your quote, consider bundling your home and auto insurance with one provider to save up to 15%.
Consider any new risks and adjust accordingly
Many new homeowners want to make a new home their own. Rip up the old carpet, a fresh coat of paint, and why not renovate that quintessential 1970’s green-tiled bathroom while you’re at it.
Your contractor will have insurance for their workers and protect their workmanship. Still, you’ll also need to inform your home insurance provider before you start any renovations to protect your family and your house. You’re paying them to cover your risk, so make sure it stays that way. While they may be happy (and reduce rates) because you’re upgrading the old knob & tube wiring or adding a backflow preventer, thus mitigating risks, they’re the risk experts. Speak with them about all your risk reduction options and how your premium could be affected.
Updating plumbing and electrical, installing a monitored alarm system, or replacing an old roof can reduce risk and, therefore, your premiums. But, even renovations have their own inherent risk.
For example, you’re replacing your roof. If a storm blows the tarps off and rain pours down on the new hardwood, your contractor isn’t responsible. If you don’t have “building under construction” listed on your policy, you’ll be paying out of pocket. Suppose you need to live elsewhere during the reno, being away for more than 30 days can put your policy at risk. Keep your insurer informed at all times.
While your contractors are there, identify any loose railings, weak steps, and poor foundation and ask if they can repair the problems. Water leaking into your house through your foundation isn’t typically covered on most policies without an add-on. If a mail courier slips on your weak step, injuring themselves, your third-party liability portion of your home insurance will come in handy. Ideally, you’re not making a claim, so know that preventative maintenance is critical.
Speaking of liability, if your new property comes with a pool in the backyard, your premiums may go up. Homeowners may be held liable for any deaths or injuries in their pool, even if the victim was trespassing. So, install a fence, keep pool rules visible, and, if you’re throwing a party, keep a watchful eye on anyone drinking too much.
The bottom line
Moving has many tasks and to-do’s, and you don’t need another on your list. But, just as you change your internet providers, your banking information with your utilities, add insurance to the list. Comparing insurance every year can save you hundreds, having the right insurance when you need it can save you thousands.