Insurance tips when selling a house

Selling a home can be an emotional – and busy – time. Between finding the right agent, keeping your home ‘open home ready’ for viewings and all the paperwork that comes with the sales process, there’s a lot to remember.

House insurance

You should keep your house insurance in place for as long as you own the property. It can be tempting to cancel your house insurance as soon as your property is sold or goes unconditional, but remember you’re the owner right up until settlement. That means until settlement it’s up to you to insure the property.

When one customer was downsizing, they cancelled their house insurance policy at the time of sale. Unfortunately, a natural disaster struck between the sale and settlement date. This created a difficult situation for the customer – there was no longer a house to be sold, and there was no insurance to rebuild it, leaving the customer facing legal and financial difficulties.

Top tips

• Don’t cancel your house insurance until settlement is complete.

• Let us know if settlement day changes.

• Already settled? Don’t forget to check on your house insurance – you might be due a refund!
• Get a house insurance quote for your new property (if you have one) so you can budget ahead.

Contents insurance

Just like with house insurance, your contents insurance remains important while you’re selling your home – in fact, it may need a review. Essentially, your contents insurance covers what you’ve insured at the location you’ve insured it at – normally, your home. But, when selling a home, many people declutter, and temporarily shift some of their contents to another family member’s home, or a storage unit. Whether these items are covered at their new (temporary) location depends on your policy. Our Plus and Premium contents policies cover your contents temporarily stored at a commercial storage facility for up to $20,000*.

If your parents or other family members are looking after some of your things, you might be covered under their policy but it’s best to check with their insurance company. Once open homes and viewings start, there are a few more risks. Prospective buyers could accidentally break something, or worse – steal something. In this case theft isn’t covered by a contents policy as you’ve technically invited them into your home, however, accidental breakage is*. One customer organised an open home via an agent. When the viewers were gone, a customer noticed that some of the jewellery was missing from a chest of draws in the bedroom. Because prospective buyers were invited into the home, and deliberately stole something, it wasn’t covered.

Top tips

• Remove valuables before your open home, and either have them with you, or stored in a secure (insured) location – and no, a sock drawer isn’t secure!

• Find out whether your policy covers ‘contents in transit’ – that is, while you’re moving them from your old house to your new one.

When to purchase a new policy

When it comes to contents insurance, it’s easy – generally, we’ll just need to change the address on the policy and we’ll calculate any change in premium. If you’ve purchased a new house, it’s not a matter of simply transferring your old house policy. Your new house will likely be a little different – in size, building materials, location and so on. You’ll need to calculate the rebuild cost (sum insured) of this property by using the Cordell Sum Sure calculator or, better, getting a professional opinion.

Selling a house in a natural hazard zone

In areas that have experienced a natural disaster (such as Christchurch and Kaikoura), it can be difficult for the buyers to take out a new house insurance policy. If you’re selling a house in this region, check with your insurer that a new owner can ‘take over’ your existing policy. Some insurers will look into providing ongoing cover for the buyer but you’ll need to make sure the buyer knows the: