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It wasn’t too long ago that I made a big move in my life. Literally. My wife, one year old son, and I moved out of the one bedroom condo in San Mateo that had seemed so perfect when my wife and I bought it about six years ago and then became so hopelessly cramped when young Xavier came along. We recently relocated to a much more family-friendly house in Roseville, California. We love our new home.

In thinking back on our relocation process, it occurred to me that readers of this blog might be interested in what sort of questions about insurance -- not just home insurance, but also auto, health and life insurance -- should you consider when you buy a new home in a new location. So here are a few thoughts on the subject.

Home Insurance. First, assuming you are selling your prior residence, you will have to cancel your old policy. You will need to contact your existing insurer and arrange for termination of the policy on the sale date. Most insurers will pro-rate any pre-paid premiums and return the excess to you. The same consideration applies if you maintained renters insurance (on the value of your possessions). You will need to contact your insurer and arrange for termination of the policy and rebate to you of pro-rated premium amounts.

You will also have to arrange for home insurance on your new home. If you are using a mortgage loan to purchase your new home, your mortgage lender will require that you have a policy satisfactory to the lender in place before you close the purchase. To do so, you will need to provide proof of insurance to the escrow agent. Even if you do not need to borrow in order to purchase your new home, you should be sure to have a homeowner's policy in place at closing. Even for cash purchasers, a house represents a substantial investment, and common sense suggests that there should be no gaps in insurance coverage. Sometimes in the rush to get a homeowner's policy in place in time for the closing, you are not able to consider as carefully as you would like all the factors that are important to you in the policy. Don't worry. After the terror of the closing and the drudgery of the move are over, you can sit down and look for the best policy for you. Nearly all insurers and policies allow for early termination with refund of a pro-rated portion of the paid premium.

Factors will include the reliability of the insurer, whether you want to cover replacement cost or current value, the amount of liability, the amount of deductibles, whether you want special coverage for any contents of your home, and whether you want to
purchase earthquake insurance.

Auto Insurance. You can of course retain your existing car insurance if you wish, if you are staying in the state of California. You will need to notify your insurer of your new address so that premium notices and other policy information can reach you. It is also possible that the cost of your existing policy will change. Insurers determine their premium rate on a number of factors, including the location of your residence. Some geographic areas are more prone to auto theft or to auto accidents than others. So it is possible that your premium will go slightly up or down with your move.

Other factors may affect your premium. Your move may change your daily commute, making it shorter or longer. Some auto policies factor anticipated use of your car (measured in miles driven) into the premium cost. For these reasons it is generally prudent to shop around for auto policies after you have settled into your new home, even if you have the same car or cars. Because Roseville is considered to be a safer location for cars than the Bay Area (fewer thefts, fewer accidents), I was able to reduce my monthly auto insurance premiums by a few dollars. And with the expenses that go with a new home, every dollar counts. If you do find a better deal than your existing coverage, it is relatively easy make a change. Most insurers will rebate to you any prepaid portion of the premium after the termination date.

One additional factor to consider is "bundling." Many insurers will offer you a discount if you purchase two or more insurance policies (say, auto and homeowner) with them. Consider this when you are shopping around. But make sure that any bundled policies are in fact less expensive than comparable separate policies with different insurers.

Health Insurance. If you obtain your health insurance through your employer and your employment hasn't changed, then neither will your health insurance. If you are changing jobs at the same time that you are are changing residences, and you will obtain your health insurance through a plan offered by your new employer, then you will simply consider the plans available through your new employment and choose the plan best for you. Your previous health insurance obtained through your previous employer will be terminated by the employer. But note that you have the right to retain that health insurance for a limited time if you wish, and you may want to consider doing so if you do not have new health policy in place immediately. Finally, if your employer does not offer health insurance (or perhaps the employer offers health insurance but does not include spouses and/or children) or if you are self-employed, then you will need to purchase your own coverage in the individual health care market.

Whether your health insurance will be provided through your employer or on the individual market, you will need to identify one or more primary health care physicians and any relevant specialists in the area of your new home. In my case, my wife and I each needed to find a primary health care physician and we were particularly concerned to find the right pediatrician or our son. Identifying physicians you trust with your health care may be a factor in choosing a health care plan as you will want to confirm that physicians you are comfortable with are "in- network" at the plan you select.

Life Insurance. Relocation will not trigger any necessary changes if you have life insurance (term or whole life). Simply notify your carrier of your new address so that policy information reaches you promptly. However, your move may represent a significant change in your life. Perhaps you have taken on a mortgage for the first time. Perhaps, as in my case, the move was precipitated by a growing family. If so, you may want to consider whether your existing life insurance is sufficient for your new responsibilities. If something happens to you, can your mortgage be paid? Is your family provided for? And if you do not currently have life insurance, is now the time to think about it?

If your pending or recent move has you up at night thinking about these or other insurance questions, please consider contacting me. I am an independent insurance broker - which means that I work only for you and not for any insurer. I am experienced and knowledgeable in all areas of auto, homeowner's, health and life insurance. And my services are free to you. Just don't ask me to help you move.

Alex Pfeifer
650 762-7080

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