Moving to a new home ranks as one of the most stressful events in your life. And you’ll have plenty to worry about, everything from hiring movers to boxing up your stuff to setting up a date at the closing table.
It’s easy to forget about updating your insurance coverage.
This, though, could be a costly mistake. After you move, your insurance policies will need tweaking. It’s not just your homeowners’ insurance that you must focus on, either. A move to a new home can result in changes to your auto and life insurance policies, too.
So what insurance questions to you need to consider when moving to a new home? Here are some key ones to consider.
Is it time to shop for a new homeowners policy?
Aneel Mattu, digital marketing specialist for Vancouver, British Columbia-based Square One Insurance Services, says that homebuyers need to set aside time during their move, no matter how difficult this might seem, to research new homeowners insurance coverage.
"As soon as your plans for a new home are firm, it's time to talk to your insurance provider," Mattu says. "Insurance can be arranged weeks ahead of time, so it's a great item to get locked down and off the to-do list, leaving more room for you to worry about the hands-on stuff in the days approaching your move."
If you are taking out a mortgage loan to buy your new home, you'll need to obtain insurance coverage on your new residence before your lender will approve you for your loan. You'll have to sign up for new coverage and provide your mortgage lender with your new policy number.
You can continue to work with your current insurance provider, of course, if you already own a home. But this is also a good time to shop around with other insurance companies. You might find a lower-priced policy from a competitor.
Make some time, then, to interview insurance providers by phone. Provide them with the basic information about your new residence. They can then provide quotes. Make sure, though, to consider more than just price. One insurer might offer you a lower monthly premium, but might provide far less coverage than its competitors.
How much more, or less, will you pay after the move?
The amount you pay for your homeowners' insurance can vary widely depending on a host of factors. Your rates might rise if you are moving to an area with higher crime, for instance. That's because you'll be more likely to file a claim in an area with more property crimes than in an area with less crime. Your insurance provider, to protect itself, will charge you higher rates.
If you are moving into a larger home, you'll need to boost the amount of your coverage. If your home is destroyed or damaged, you'll want enough coverage to guarantee that you'll be able to cover a rebuild of or repairs to your home. A larger home generally requires more insurance coverage.
This means talking to insurance agents and providing them with relevant information on your new home: how large it is, when it is built, where it is located, the materials used to build it and other key facts.
Your new homeowners insurance policy might also cost less. Say you move from a single-family home to a condo. You'll still need homeowners insurance, but the cost of insuring a condo unit is far less each year than is insuring a single-family home.
"You will no longer be insuring an entire structure," Mattu says. "Instead, you will buy a policy based upon the value of your possessions."
Of course, going the other way and moving from a condo to single-family home will result in a more expensive homeowners' insurance policy.
"In addition to your possessions, you will now be buyingg a policy capable of rebuilding an entire house," Mattu says.
Are your personal items insured during the move?
Your furniture, electronics or clothing can get seriously damaged during a move, whether while they’re in a moving truck or they’re getting carried up two flights of stairs. Do you have the proper insurance coverage to protect your items during your actual move?
Maybe. Your existing homeowners insurance coverage might provide protection in certain cases. Say a thief breaks into the moving van and steals your property. That might be covered. But if a mover drops your TV down the stairs, that might not be.
Before your move, talk to your insurance agent to make sure you understand what is and isn’t covered during a move. If you are moving items on your own, you might consider purchasing insurance from the moving company issuing you your moving van. If you are hiring movers, you can also purchase supplemental insurance from the company providing them.
Talk to your agent first, though, so that you don’t spend money on coverage you don’t need.
Do you have enough coverage for additional home items?
John Bodrozic, co-founder of El Dorado Hills, California-based HomeZada, a company that provides digital home management services, says that homeowners should revamp their home inventory after moving to a new residence.
What's a home inventory? That's a list of your most valuable possessions — and often photos of these items — and how much they are worth. If something then happens to these possessions, such as they are destroyed in a fire or stolen by burglars, you can submit this inventory to your homeowners' insurance company. Your insurance company can then refer to this information when calculating the amount it will pay out to you in case of damage or theft.
After a move, your home inventory will usually change, sometimes dramatically. It's important to draft a new inventory with updated values assigned to your personal items, Bodrozic says.
"When people move from one home to another, it usually comes with a purge of personal property you no longer need or want that goes to charity or the junkyard," Bodrozic says. "Then in the next 30 days after the move to the new house, new furniture, electronics and tools get purchased."
Homeowners insurance providers strongly recommend that owners create a home inventory. Don't delay on doing this after you move. An updated home inventory might inspire you to increase your homeowners' insurance coverage before it’s too late.
"Many people are under-insured because the total value of their personal property is more than the personal property coverage in their policy," Bodrozic says.
How will a new address affect your auto insurance?
Most consumers understand that their homeowners’ insurance costs might change after a move. But that’s not the only insurance policy that might get more or less expensive.
Evan Roberts, a real estate agent and founder of Dependable Homebuyers in Columbia, Maryland, said that consumers are often surprised by the impact that a move can have on their auto insurance.
If you move to a home that results in a longer commute to work, for instance, you might end up paying more for your auto insurance. That's because your insurer will now consider you a riskier client. You have a greater chance of getting into an accident and filing a claim if you must drive 45 minutes to work than when you had to drive only 10 to get to your office.
You might also see your car insurance rates rise depending on the crime statistics in your new neighborhood, Roberts says. Say you move to a neighborhood in which car thefts or broken car windows are more common. You again become a riskier client, and your auto insurer will adjust your policy rates to reduce the risk they are taking in insuring you.
"Many homebuyers are surprised by the impact a move can have on their car insurance," Roberts says.
Is it time to update your life insurance?
Finally, consider your life insurance coverage, too. Again, you might think that a new home has little impact on life insurance. But a new home might also come with a larger monthly mortgage payment. If you should die unexpectedly, would your current life insurance payout be high enough to cover that new payment?
After the move, talk to the provider of your life insurance to make sure that your policy provides enough coverage for your new living arrangements.