Did you know there might be money waiting for you? And if you don’t claim it, it may never be yours to keep. I am referring to homeowner’s insurance refunds.
When you buy a home you purchase homeowners insurance for it. And most of us have that insurance policy premium paid by our mortgage lender. In this case, every month a portion of your house payment goes towards your property taxes and homeowners insurance. That money is kept in an escrow account by your mortgage lender, and annually when these expenses come due your lender actually sends the payments for you.
When you sell your home, after the sale your lender will mail you a refund check for the monies still sitting in your escrow account. That check usually arrives within 3-6 weeks of closing.
But if you do not actually call to cancel your homeowners insurance, then the premium already paid will not be refunded. The insurance company has to be notified to cancel the policy. Once you do that, they have to refund the portion of the year’s policy which you did not use. Example, if your homeowners policy begins every November 1st, then your annual premium is paid at that time. If you sell your home six months later, you have only used six months worth of your policy. But you have already paid for the entire year, so a refund is now due for the unused portion.
Be sure to call your insurance company and tell them you sold your house and want your refund for the unused portion of the year. Otherwise, that’s money you’ll never see again!
If you have any other questions, feel free to give me a call.