Can the New Owners Take Over My Home Insurance Policy?

If you're preparing to sell your house, it’s good to know what will happen to your home insurance policy, not just for your peace of mind, but for a smooth handover to the new owners. Can the buyers simply "take over" the existing home insurance policy?
Unfortunately, the answer is no the new owners cannot assume or transfer your existing home insurance policy into their name. We’re going to look at what every Canadian home seller needs to know.
Western Financial Group, a 100% Canadian company, can help you navigate your business, car, home, and boat insurance during this period of economic uncertainty.
Why home insurance policies aren't transferable
Home insurance policies are legally binding agreements between the insurer and the current homeowner, tailored to both the specific property and the risk profile of the policyholder.
These contracts factor in the owner's claims history, credit score, and lifestyle, as well as unique details about the house itself (such as construction, materials, location, and replacement cost).
While the home may be more or less the same at the time of the handover, the new owner’s personal details will have changed, making the existing policy no longer valid.
When ownership of a property changes
The existing policy remains valid only for the seller, not the buyer or the property itself.
The new owners must arrange their own insurance coverage to protect their interests (and those of their mortgage lender) from the moment they take possession. Their new home insurance policy will become active at the closing of the sale.
What sellers should do with their home insurance policy
Notify your insurer about your intention to sell. You'll need to maintain your insurance until the buyer officially takes legal possession, as any damages that occur before the sale finalizes are still your responsibility. Once the transaction closes, you should:
- Inform your insurer and provide the date the house is no longer in your possession.
- Cancel your policy effective the closing date (or request a refund for any prepaid premiums).
- Obtain written confirmation that your policy is cancelled.
There is no reason to keep a home insurance policy after you’ve sold your home, so go ahead and cancel it after the sale has fully closed.
What buyers need to know
Home insurance isn’t legally mandatory anywhere in Canada, but of course it’s highly recommended to protect what is likely one of your biggest assets! Besides, most lenders will not approve you for a mortgage without a home insurance policy in place.
Work with a broker like Western Financial Group to compare home insurance quotes across Canada and find the best policy for your unique situation.
Did you know? At Western Financial Group, we help Canadians understand what their home insurance covers and offer expert advice to make sure you’re protected for life’s unexpected events.
Are there any exceptions for keeping previous home insurance?
If you want to keep your previous home insurance and adjust it to your new home, you’re your insurer might be able to transfer elements of your policy to your new home. In that case, contact your insurer for possible policy amendments or to create a new customized policy for your new residence. Remember that no policy can ever be transferred directly to the new owner of your old home.
Key takeaways
Home insurance policies are not transferable to the new owners of your house. The buyer must purchase their own policy independently before taking possession. As the seller, keep your policy active until the sale is finalized, then cancel once everything is in place. Always consult your insurance provider for specific guidance during the selling process.
For further advice and personalized service, speak with one of Western’s licensed home insurance experts! Our goal is to make sure both you and the new owners are protected through every step of the real estate transaction.
FAQs
Can a buyer assume my existing home insurance policy?
No, home insurance policies cannot be transferred to new owners. The buyer must arrange their own policy because insurance contracts are individualized and based on your personal risk profile and ownership.
What should I do with my home insurance policy when I sell my house?
You should keep your policy active until the sale is finalized, then notify your insurance provider to cancel it effective the closing date. Any unused premiums may be refunded to you.
Is it possible to transfer my home insurance to a new property if I’m moving?
Yes, in most cases, you can transfer your policy to cover your new home, but it’s not a direct transfer. Western’s insurance brokers will reassess your risk and likely issue a new policy for the new property, possibly with different terms, conditions, or premiums.
Will I have coverage for my belongings during the moving process?
Yes, some home insurance policies provide limited coverage for belongings during the move, but it’s best to check with us at Western Financial Group or consider purchasing additional moving insurance for complete protection.
Can I cancel my home insurance at any time, and will I get a refund?
Yes, you can cancel your policy at any time. If you paid your premium in advance, you might receive a refund for the unused portion, though cancellation fees may apply depending on your provider and how far you are into your policy term. Western Financial Group can help you navigate this process.