Selling your home involves a lot of moving parts—pricing, showings, offers, inspections—but what about insurance? You might be wondering: Does a house have to be insured to sell? The short answer is no, it’s not legally required in most states. But there’s a big difference between what’s required and what’s smart. Whether you have a mortgage or you’re selling a vacant home, keeping homeowners insurance in place until the deal closes can save you from major headaches—and major costs.
Let’s break it all down.
Can You Sell a House Without Insurance?
What the Law Says in Most States
In most states, you are not legally required to maintain homeowners insurance in order to sell a house. However, if you still have a mortgage, your lender will almost always require that you keep your homeowners insurance policy active until the loan is fully paid off at closing.
What About Cash Buyers?
If you’re selling to a cash buyer, you can technically cancel your insurance policy before closing. But this can be risky. Any property damage—such as a fire, burst pipe, or vandalism—will be your financial responsibility. That’s why most sellers, even in cash transactions, maintain coverage until the closing documents are signed and the deed is transferred.
Real Estate Agent and Buyer Expectations
Most real estate agents and buyers expect the house to be insured throughout the process. If damage occurs before closing, it could delay the deal or kill it altogether. This is especially true if the buyer’s lender requires the property to be in insurable condition.
Do You Need Homeowners Insurance to Sell a House?
The Practical Risks of Selling Without It
Even if you’re not legally required to have insurance, dropping your policy too soon is risky. If a fire breaks out, if a tree falls on the house, or if someone breaks in and causes damage, you’re on the hook for all repairs and liabilities.
Vacant Home Insurance and Why It Matters
If your home is unoccupied, your traditional homeowners insurance policy may not provide full coverage. This is where vacant home insurance comes in. Agencies like Wheatland Insurance Center, Mountain West Insurance, and Group Insurance Inc often offer these types of policies.
What Happens If You Cancel Coverage Too Soon?
Typical Seller Mistake: Canceling Before Closing
One of the biggest mistakes sellers make is canceling their policy before the sale officially closes. Remember, you still own the property until the title legally changes hands.
Insurance Claims Between Contract and Closing
If there’s an insurance claim in the time between signing a contract and closing—say, storm damage or water damage—you could end up covering the entire cost. Worse yet, the buyer might walk away.
Do You Need House Insurance to Sell a House If You Still Have a Mortgage?
Lender Requirements Until the Last Day
Lenders require active property insurance coverage until the loan is paid off. That typically happens on the closing day. So if you cancel early, your lender might step in and buy a policy on your behalf (called force-placed insurance)—at your expense.
What About FSBO Sales?
If you’re selling your house without a realtor (FSBO), you’re still responsible for all risks associated with the property. Insurance is your safety net.
Why Some Sellers Take the Risk of Selling Without Insurance
The Temptation to Save on Premiums
Some sellers cancel their policy to save a few hundred bucks on premiums, especially if the house has already been vacated. But even one issue can cost thousands and potentially ruin the sale.
Working with Investors Like R&H Distressed Properties
If you’re working with a company like R&H Distressed Properties, you might be able to sell your home as-is—even without current insurance. But just because you can doesn’t mean you should.
Homeowners Insurance When Selling a House: What Are Your Options?
Adjusting Coverage for a Vacant or Listed Property
Your insurance agency can often modify your current policy to account for your home being on the market or vacant. Ask about “listed home” endorsements or vacant home insurance.
Recommended Insurance Agencies
Some agencies known for helping sellers include:
- Burns Insurance Agency
- Wheatland Insurance Center
- Mountain West Insurance
- Group Insurance Inc
- Leavitt Insurance Agency
- Defendis Insurance Brokers
- Inszone Insurance Services
Use an Experienced Agent Who Understands Real Estate
Not all insurance brokers understand real estate sales. Look for those familiar with insurance services, property insurance, and vacant policies. Agencies like Leavitt Group, Silver Key Insurance, CIA Leavitt Insurance, and Wafd Insurance Group often specialize in complex coverage.
Selling a Vacant House? Don’t Skip Coverage
Vacant Property Risks
Empty homes are more likely to be burglarized, vandalized, or damaged. Issues like leaks or broken HVAC systems can go unnoticed for weeks.
Types of Coverage to Consider
- Vacant home insurance
- General liability
- Extended dwelling coverage
Providers to Call in California
California homeowners often work with:
- Leavitt Group
- CIA Leavitt Insurance
- Wheatland Insurance Center
- Mountain West Insurance
The Role of Insurance at Closing
What Escrow Companies and Title Agents Look For
Some title companies and escrow officers request proof of active insurance coverage—especially if the home is financed. Make sure your insurance agency can deliver documents quickly.
What Buyers Expect
Buyers often assume the property is covered through the close of escrow. It’s one more layer of trust—and protection—that helps deals go smoothly.
Can You Sell a House Without Insurance If It’s a Cash Sale?
Yes, But You Still Carry Risk
Cash buyers won’t require you to maintain insurance, but if anything happens before the deed transfers, you’re responsible. That’s why many sellers still keep basic coverage or purchase vacant home insurance until closing.
Final Tips for Sellers: How to Avoid Costly Mistakes
Always Keep Coverage Active Until the Deed Transfers
Keep your policy active until the day you no longer legally own the home. Even if you expect to close in 24 hours—delays happen.
Talk to Your Insurance Agency Before Making Any Changes
Always speak to your insurance agency, such as Wheatland Insurance, Leavitt Select Insurance, or Defendis Insurance Brokers, before canceling or changing your policy.
FAQs About Insurance and Home Sales
Do you need home insurance to sell a house?
No, but it’s a smart move to avoid unexpected loss or liability.
Can you sell a house without homeowners insurance?
Yes, especially in a cash deal, but it puts you at financial risk.
What if my home is already vacant and uninsurable?
Seek out vacant home insurance policies from agencies like Mountain West, Burns Insurance, or Group Insurance Inc.
What if I’ve already canceled my policy?
Contact your insurance agency right away. Reinstating may be possible until closing is finalized.
Summary: Does a House Have to Be Insured to Sell?
You don’t have to have homeowners insurance to sell your house—but it’s almost always in your best interest to keep it. From protecting against damage to maintaining lender compliance, insurance gives you peace of mind and protects your equity. Talk to trusted providers like Wheatland Insurance Center, Mountain West Insurance, or Leavitt Group for coverage options that fit your situation.