If you are planning a big move, then you might be wondering if changing home insurance is necessary. Below, we dive into the topic of transferring home insurance, including whether it can be done, under what circumstances, and how you can switch home insurance policies if needed.
What happens to your home insurance policy when you move
The reality is that when you move into a new home, your home insurance policy doesn’t always move with you. Home insurance policies are dependent on many factors, one of which is your location. Therefore, by changing your location, not only are your coverage needs likely to change but so too is your premium. Depending on your new needs, your current insurance provider may not be able to offer you coverage that meets them. In other cases, such as if you are moving to a new province or country, your insurance company may not be licenced in that jurisdiction, preventing them from offering you any type of coverage at all.
It is important to note that even if your current provider is able to continue offering you coverage, your existing policy won’t technically be transferred to your new address. Instead, your current policy will end and a brand new one will start with your chosen provider that covers your new home. This is necessary given that all homes are unique and that insurance costs depend so heavily on these unique features. For those that don’t know, some of the factors that influence home insurance rates in Canada include:
- the age of your home
- the value of your home
- the age and condition of your home’s roof
- plumbing system
- electrical system
- heating system
- the address of your home
- the presence of any detached structures like sheds gazebos, garages, or pools
- the square footage of your home
- the proximity of your home to a water source like a fire hydrant or fire station
Ultimately, the best way to find out if you can transfer your current home insurance plan to your new home is by contacting an insurance broker. An insurance broker can offer expert advice on whether your insurance can be transferred. If it can be, they can walk you through the process of doing so. Conversely, if it cannot be transferred or you are not satisfied with your current home insurance policy anyway, a BrokerLink insurance advisor can shop around on your behalf to find you a new plan that better meets your needs. Please note that it’s best to inform your insurance broker as soon as possible before moving. Some insurance providers have a 30-day rule, meaning policyholders are required to give no less than 30 days of notice before moving into a new place if they want to transfer their home insurance policies.
Transferring home insurance to a new home
As mentioned above, it may be possible to “transfer” your home insurance policy to a new home. However, given that home insurance coverage is tailor-made to not just each policyholder but each home, you should not expect the cost of your coverage to stay the same. If you decide to move forward with transferring your property insurance policy, and your insurer has confirmed that you are eligible to do so, what happens is that your existing policy will be cancelled and a new policy will be created for your new home. This new policy that is created will likely have a different premium based on your updated home address, the value of your new home, and any potential new risks, e.g. if your new home has a pool and your old one didn’t. Note that if you move to a new province or country, your insurance provider may not be able to offer you a policy for your new home, which means you will have to find an insurance provider licenced in the area your new home is located.
Transferring home insurance to a new owner
Just as homeowners are curious about whether their existing home insurance policies can be transferred to a new home, they might also be wondering if their existing policies can be transferred to a new homeowner. To set the record straight - no, a home insurance policy cannot be transferred from one homeowner to another. For instance, it is not possible to transfer control of a home insurance policy from yourself to the buyer who purchased your home from you. Rather, you will have to cancel your existing policy and buy a new policy for your new home, whether from your existing provider or a different provider. Meanwhile, the new buyer will have to purchase a policy of their own too, cancelling their current policy if one exists and purchasing a unique one for their new home.
Why can’t the new owner of your home assume your existing policy? Again, the answer comes down to the way that insurance companies calculate home insurance policies. Even if the new owner wanted the exact same coverage, limits, and deductibles as you had, there are several other policyholder-specific factors that will inevitably change with a new owner. For example, the value of the belongings inside the home affects the home insurance premium, and the new owner would be moving their own personal property into the home. If they have lots of belongings that are higher in value than you had, they may need to purchase high-value home insurance. Further, the new owner’s credit history, age, and insurance claims history would also be considered, all of which are likely to differ from your own. Therefore, transferring home insurance to a new owner is unfortunately not possible.
Guide to transferring home insurance
Now you know that transferring home insurance, if this is an option for you, is a bit of a misnomer. Even in situations when you can stick with your current provider, your existing policy will still need to be cancelled before you can purchase a new one for your new home. Given that your current policy will need to be cancelled, insurance experts recommend that you take this opportunity to shop around and compare policies. You might still end up sticking with your current provider, but this way, you will know for certain which insurance provider offers the best coverage for your needs. Below, we break down the differences between changing home insurance policies on your renewal date or midway through your policy, as well as provide some tips for changing home insurance:
Switching home insurance on your renewal date
If you decide to change home insurance policies or providers on your policy’s renewal date, there is unlikely to be any sort of fee or charge. You can simply cancel your existing policy, should you wish to do so, and purchase a new one with your current provider or a different provider entirely. Just make sure you notify your insurance provider in advance of the expiry date.
Switching home insurance midway through your policy term
Changing home insurance before your policy term has expired is a little bit different. Since your coverage is still ongoing, you may be charged a penalty for cancelling early. The best way to find out this information is to review the terms of your original insurance agreement or contact an insurance broker. An insurance broker can give you key pieces of information, such as any applicable cancellation penalties, as well as information about whether your current provider will issue a prorated refund. An insurance broker can also help you weigh the pros and cons of cancelling your policy versus sticking with it for the remainder of the term, especially if the penalty fees are so high that the financial benefits would be limited.
Tips for changing home insurance
Check this list of tips to make changing your home insurance coverage an easy and simple process:
1. Notify your insurance broker as soon as possible
The first step for changing home insurance is to notify your insurance broker as soon as possible. Whether you already know you want to cancel your existing policy outright or transfer it to your new home, informing a local insurance broker is crucial. A broker can help you manage this transition and even give you tips to ensure you don’t experience a lapse in coverage between your two homes. They can also advise you of any applicable fees you may be required to pay if you are cancelling your coverage mid-policy and make you aware of how much notice you are required to give your insurer before cancelling your policy. Further, a broker can review your current policy and provide insight into the ways in which your premium is likely to increase or decrease based on the circumstances surrounding your new home.
2. Make sure the dates align
Our second tip for changing home insurance policies is to make sure that the end date of your current policy aligns with the start date of your new policy. You want to avoid a lapse in coverage at all costs, as this can be dangerous should something go wrong, as well as have a negative impact on your future home insurance rates.
3. Shop around and compare home insurance policies
Anytime you switch insurance, whether it’s home insurance or auto insurance, we recommend shopping around. There is no other way to know that you are getting the best possible deal. Plus, shopping around is easy when you have the help of a broker. We understand that not all customers have the time to research different insurance companies and compare coverage options. But thankfully, BrokerLink does! Get in touch with us and one of our licenced home insurance specialists will be happy to reach out to our contacts and obtain quotes. We can also unlock discounts offered by different Canadian insurers, explain how coverage works, and offer a professional opinion on which coverages, limits, and deductibles make the most sense for you and your new home. In the end, no matter what policy or provider you choose, you can rest easy knowing you have done your due diligence and shopped around for the best rate.
4. Don’t forget to inform your mortgage lender
Your insurance broker and insurance provider aren’t the only people you need to notify if you are switching house insurance policies. Mortgage lenders often require borrowers to purchase home insurance. For homeowners who are still paying off home insurance mortgages, you must inform your mortgage lender of your new insurance policy as soon as possible. Be proactive about it and send them a copy of your new insurance coverage. This should be done before the move-in date.
Contact BrokerLink to find out more about transferring home insurance policies
Are you planning a big move? BrokerLink can help you manage this major transition by taking care of your home insurance needs. If you’re in the midst of a move, then you probably have questions about what happens to your existing property insurance policy. A BrokerLink insurance advisor can answer all of them. We can explain how transferring insurance works, confirm if you’re eligible for home insurance transferring, and help you switch insurance companies if need be. Along the way, we can shop around and compare rates to ensure you get the best coverage at the lowest price for your new home, and even give you tips on how to save money on property insurance, such as informing you about home insurance tax deductibles. To learn more, get in touch with BrokerLink today. We can be reached by email, phone, or in person at any one of our branches in Canada. You can also request a free home insurance quote now.
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FAQs on transferring home insurance
If I’m moving houses, do I need to stay with the same home insurance provider?
No, you do not need to stay with the same home insurance provider when moving into a new home. That said, if you are moving midway through your current home insurance policy term, then you should contact an insurance broker to ask about any applicable cancellation fees. If your insurance company charges a penalty for cancelling early, you might decide that you’re better off sticking with your current provider. However, if you are willing to pay the fee, or your provider doesn’t have any cancellation fees, or your policy term is expiring anyway, then you can certainly change home insurance providers if you wish to do so.
Do I need to have home insurance when I’m moving into a new home?
You will likely need to purchase a home insurance policy when moving into a new home. Though property insurance is not government mandated, many mortgage lenders require it. Thus, if you bought your new home with a mortgage, you will likely need to purchase home insurance coverage. Failure to do so would put you in breach of the legal contract you signed with your mortgage lender. When moving into a new home, make sure to notify your mortgage lender and provide a copy of any new home insurance documents.
When should I cancel home insurance after selling my home?
It is recommended that homeowners wait until their home has been sold to cancel their home insurance policy. You also want to avoid a lapse in coverage between your old home and your new home, so make sure that your new policy begins the same day or the day after your old policy ends. Another tip? Do not cancel your current policy on the closing date. Instead, wait until the last of your belongings have been moved out of the house. This is because it is possible that the home will be damaged as you move items out of your home. If your insurance policy is still in effect, it may cover you. Waiting a few days after closing to cancel your policy can also help you avoid a hassle in the unlikely event that your buyer backs out at the last second.
Can a home insurance policy be transferred to a new owner?
No, home insurance policies cannot be transferred to new owners. The new owner of your home will need to buy their own insurance coverage.
Does home insurance cover my belongings while they are being moved to my new home?
Home insurance policies do not typically cover a policyholder’s belongings while they are in the process of being moved. Rather, contents coverage, which is the portion of home insurance that generally pertains to your belongings, protects your items once they are inside your home. More specifically, contents coverage protects a policyholder’s personal belongings from damage caused by perils named in your policy, like fire, lightning, smoke, theft, and more. If you want your items to be covered while moving, you will likely need to purchase a separate policy. Moving insurance policies can be purchased from independent insurance companies or via your moving company.
Do I need new coverage if I’m going from a tenant to a homeowner?
Yes, tenants and homeowners require different types of insurance coverage. Tenant insurance or renters insurance is the type of home insurance policy that is designed for renters, whereas homeowner’s insurance is the type of policy designed for homeowners. The coverage varies drastically as homeowners have a lot more responsibility. Therefore, their coverage needs are usually greater. If you are transitioning from a tenant to a homeowner, speak with an insurance broker about changing home insurance policies.
Can I change my property insurance coverage at any time?
Yes, technically, you are legally allowed to cancel your home insurance policy and start a new one at any time. However, you may incur fees if you cancel your policy before the term has expired. These fees vary so it’s best to speak with an insurance broker or agent to learn more about the financial penalties that may come with cancelling a home insurance policy early. If you wish to make changes to your home insurance policy coverages, this can be done at any time, however may increase or decrease in your premiums depending on what your changes are.
Can I switch my home insurance policy if I have an open claim with my insurer?
Yes, you might be able to switch your home insurance policy, even if you have an open claim with your insurance provider. That said, the claim won’t be transferred along with your insurance. The insurance company currently handling your claim will continue to do so, and you will still have to deal with them until the claim is resolved.
Will I get a refund if I cancel my home insurance coverage mid-policy?
This depends on the insurance provider. If you paid for your policy annually or otherwise overpaid your premium at the time of cancellation, your insurance provider might issue a refund. However, if you pay for your home insurance policy monthly, you may only be eligible for a small refund, and that’s only if you overpaid your most recent month. Please note that if you are cancelling your policy midway through, you may have to pay a cancellation fee, which would eat into any money refunded back to you.
If you have any questions, contact one of our local branches.
