When you are planning to sell a home in New York, don’t underestimate the importance of homeowners’ insurance. This is because the home you are selling is still yours until you finalize the closing process. It may seem like an additional expense, but an active homeowners’ insurance will protect both the seller and buyer from any unforeseen events. We explain why having homeowners’ insurance is crucial if you are selling your property in New York.

Legal And Financial Protection

Most purchase contracts in New York require you to maintain proper insurance coverage until you finalize the title transfer. You will remain responsible for the property until the sale closes. So, the insurance protects both parties during the sale process, especially if you still have a mortgage.

Mortgage lenders in New York also mandate homeowners’ insurance before financing a home purchase. For example, you will need continuous insurance coverage as part of your loan agreement until the loan is paid off at closing. It's a requirement that ensures there are no gaps in coverage that may complicate the title transfer or create liability issues.

Coverage During the Selling Process

Sometimes homeowners continue living in the home while it's on the market. If this is the case, the homeowner's insurance will cover your property against named perils like fire, theft, and vandalism. The period between listing and closing often presents unique risks.

For example, open houses, home inspections, and property viewings will increase foot traffic in your home, which can elevate the risk of accident or property damage. With homeowner's insurance, you get essential liability coverage during this period. Make sure you review your policy to understand what is covered before selling your home.

If someone is injured on your property, homeowners’ insurance provides liability coverage, shielding you from legal claims and medical expenses. This coverage is important during open houses or showings as potential buyers walk through your home.

Coverage For Vacant Properties

Let's say you have already moved out before putting your home on the market. You will still need homeowners’ insurance to protect your property during the sales process. However, standard homeowners’ insurance might not be adequate since many policies limit or void coverage if the property is vacant for more than 30-60 days.

So, focus on obtaining specific vacant home coverage to maintain proper coverage during this period. This insurance covers certain perils that a standard homeowners insurance policy does not cover for vacant homes. However, it might cost more than the standard policy because vacant homes have an increased risk of theft and vandalism. You can buy it as a separate policy or add it to your existing homeowner's coverage.

Peace Of Mind for Buyers

Having homeowners’ insurance will reassure potential buyers. It signals to buyers that the property is well maintained and the seller is responsible. So, the buyer will feel more confident purchasing a home since you care about protecting your investment. This perception enhances the home’s appeal to buyers.

You also get peace of mind while selling the property in case of unforeseen circumstances. Even a minor incident on your property can result in significant financial loss or legal complications, jeopardizing the sale. So, until the sale closes, you need to protect your property with homeowners’ insurance. The insurance gives you the peace of mind to conduct the sale process.

Benefits Of Homeowners Insurance

Once you invest in homeowners’ insurance, you get benefits that go beyond meeting the lender requirements. For one, this insurance will protect your property against natural disasters. Since New York is prone to natural disasters like Nor'easters and hurricanes, getting homeowners insurance will help mitigate the financial losses from these events. At the same time, you can get coverage for personal belongings within your home, protecting against theft or damage.

Bottom Line

When selling a home in New York, maintaining homeowners’ insurance is necessary for legal and financial protection. You will also get the peace of mind. So, until the buyer officially owns the home, you should keep the insurance. If you cancel too early, you may be forced to pay out of pocket in case of damages. Find an insurance agent to help you navigate the homeowner's insurance options and ensure you get the right coverage. They will help understand your coverage needs during the process and ensure the timing of policy cancellation aligns with your closing fate.