Are home insurance policies set in stone for a year or the life of a home mortgage? If you are like most homeowners, you are unsure of the answer to this question. Fret not, as All-Tex Insurance, serving Granbury, TX, is here to help.
Canceling a Home Insurance Policy
Though it is possible to cancel a home insurance policy, doing so poses risk. If you insist on ending your policy, it is in your interest to have another policy in place. Cancel your policy and you’ll be happy to know you have a right to a policy refund, albeit prorated. This means the paid balance will be returned to you as reimbursement.
Be aware that a financial penalty referred to as a short rate cancellation cost is sometimes applicable upon cancellation. In most cases, this penalty is 10% of the yearly premium.
Though it is not recommended to cancel a home insurance policy, doing so is prudent when selling a house. The cancellation of the policy should be aligned with the date of the home ownership transfer. This way, once the sale goes through, the responsibility to protect the house is on the buyer.
What About the Mortgage?
If you still owe money on the house in the form of a mortgage, your lender probably won’t allow you to cancel the home insurance. However, if the mortgage is fully paid or if you own the home outright you can legally proceed without an insurance policy.
The problem with taking this risky approach is that if the house burns to the ground, is vandalized or burglarized, you’ll be tasked with paying for repairs or a full rebuild out of pocket.
Contact All-Tex Insurance Today
Serving Granbury, TX, we provide invaluable peace of mind. Give us a call today for more information about coverage options, including your personally tailored insurance quote.
