Selling your house may be a thrilling but difficult process. Among the many decisions you need to make, one that often comes up is whether or not to cancel your National Flood Insurance Program (NFIP) policy.
In this article, we’ll delve into the reasons why you should consider keeping your NFIP policy even when selling your home, especially in the flood-prone region of Southwest Florida.
Understanding the Policy
The NFIP policy is a federally backed insurance program designed to provide coverage against losses from flooding. Given Southwest Florida’s susceptibility to heavy rains and hurricanes, having an NFIP policy is often a wise decision for homeowners.
There are two main types of NFIP policies: building property coverage and personal property coverage. The former covers the physical structure of your home, while the latter covers your personal belongings within the house.
The Importance of NFIP Policy During Home Sale
When selling your home, maintaining continuous flood insurance coverage is crucial. Buyers are often more inclined to purchase a property that already has flood insurance in place. It gives them a sense of security and demonstrates your commitment to their future well-being.
One significant advantage of keeping your NFIP policy is its transferability. By retaining the policy, you can potentially save the new homeowners the trouble of seeking new flood insurance. This can be an attractive selling point and might even make your property more appealing in a competitive market.
Risks of Canceling NFIP Policy
A canceled NFIP policy might raise concerns for potential buyers, potentially leading to negotiations that could lower your property’s value. Keeping the policy in place can avoid such situations and maintain your home’s market value.
Learn more about why you shouldn’t cancel your NFIP Policy in this video:
Additionally, if you cancel that policy, any potential buyer is looking at a hefty $6,500 price tag to put that policy back in place. Instead, you can make your home more appealing by holding on to your policy at whatever price point it’s at and allowing the buyer to assume that policy for just a $500 fee.
Be sure to let the new homeowner know the status of your NFIP policy during the home sale. This transparency builds trust and ensures a seamless transfer in terms of insurance coverage.
Maintaining the policy has benefits for both you as the seller and the prospective buyers. You may comfortably handle the house-selling process by making sure you have ongoing coverage, taking the risks into account, and making the transfer with care.
So, help set yourself and potential buyers up for success, and keep that policy in place. If you want to learn more tips and tricks when selling your home, find related articles in our blog posts.