Buying or selling a home in Texas — when your insurance starts and stops

Two moments trip people up, and they're both on the calendar months in advance: the day you close on a new house, and the day you hand over the keys to an old one. Neither of them handles your insurance for you.

The rule underneath both is the same, and it's worth having in mind before the details: a home policy covers your interest in a house — it doesn't travel with the deed. The buyer doesn't inherit the seller's policy, and the seller's policy doesn't switch itself off at closing. Two separate things have to happen, and both are your job to start.

Here's what we'll cover: when a policy has to be in force if you're buying, the two timing traps that can push a Texas closing, what actually happens to your old policy when you sell, and the vacancy problem that catches people whose house doesn't sell right away.

If you're buying: the deadline is set by your lender, not the state

Texas doesn't require home insurance. Your mortgage does. The Texas Department of Insurance (TDI) puts it plainly: "The law doesn't require you to have home insurance. But if you still owe money on your home, your lender will require you to have it."

The requirement usually isn't just some policy, either. TDI's shopping tips note that "Most mortgage companies will require that you have a replacement cost policy as a condition of your loan." Replacement cost coverage, in TDI's own glossary, "pays to repair or replace your house and personal property at current prices" — as opposed to actual cash value, which "pays replacement cost minus depreciation."

So the practical deadline is your closing date, and the practical answer to when should I start is: as soon as you're under contract, not the week of closing. Two things in Texas can take longer than a shopping trip.

Timing trap one: flood insurance has a waiting period

A standard home policy is not a flood policy. TDI: "Most home policies don't cover damage caused by floods. If your home is in a designated flood zone, your lender requires you to have flood insurance."

That's the part people plan for. This is the part they don't: "Most flood policies have a 30-day waiting period before kicking in so don't wait for an approaching storm before deciding to buy coverage." A 30-day wait and a 30-day close are on a collision course. If the home you're buying sits in a designated zone, flood is the first call, not the last.

TDI also makes the point that zone maps aren't the whole risk picture: "But floods can happen anywhere. More than half of homes flooded by Hurricane Harvey were outside of designated flood zones."

Timing trap two: coastal wind coverage, and inspections

If the house is on the coast, wind may not be in the home policy at all. TDI: "If you live on the Texas coast or in Harris County on Galveston Bay, your home policy might not cover wind and hail damage. The Texas Windstorm Insurance Association (TWIA) sells wind and hail coverage for coastal residents."

That coverage comes with its own prerequisites and its own clock. TDI: "Depending on where you live, you might need flood insurance before TWIA will sell you a policy. You also might need a home inspection by an engineer or a windstorm inspector." And the hard stop: "Don't wait until the last minute to buy wind and hail insurance. TWIA won't sell you a policy if there's a hurricane in the Gulf of Mexico."

Inspections matter inland too, and in a way most buyers never hear about. TDI lists what a company may do in the first 60 days of a new policy — it may cancel if "It doesn't accept a copy of a required inspection report before the policy starts." A policy issued at closing isn't necessarily a policy that survives the first two months if an inspection comes back badly. If your new home has an older roof, that's the thing to raise before you bind, not after — and it's worth knowing how the roof will be settled if a storm hits, which how the wind and hail deductible works covers.

If you're selling: nothing cancels itself

Your policy runs until its end date unless someone stops it. TDI defines the term: "Cancellation means either you or the insurance company stops coverage before your policy's end date." Selling the house is not, by itself, that act. You have to cancel — and you shouldn't do it a day earlier than you have to.

The money you've already paid isn't lost. TDI: "If either you or the company cancels your policy, the company must refund any unearned premium to you within 15 days after the date of the cancellation. Unearned premium is the amount you paid in advance that didn't go toward coverage." TDI's own worked example: "say your premium is $100 a month, or $1,200 a year. If you paid for the full year in advance, but then cancel your policy after one month, the company would owe you $1,100 in unearned premium."

Two practical notes follow from that. First, a refund is owed on a timetable, so a cancellation that leaves you short is worth a phone call rather than a shrug. Second — and this is the one that costs people — TDI's shopping checklist says it flatly: "Don't cancel your current policy until you get your new policy or a written statement that proves you have coverage." At a closing table that means the new policy is in force before the old one ends, not on the same afternoon and not the following Monday.

The seller's problem nobody mentions: an empty house

If you move out before the house sells, the clock most likely to hurt you isn't the listing — it's the vacancy provision. TDI lists it among the reasons a company may nonrenew: "Your house is vacant for 60 days or more. Most companies stop your coverage if your house is vacant for that long. They usually don't stop your liability coverage, though. If you plan to be out of your house for an extended time, talk to your company to make sure your coverage continues."

That's a real gap in an ordinary situation: relocation for a job, moving in with family, buying the next house first. An empty, unsold, uninsured house is exactly the one a burst pipe finds. The fix is a conversation before you move out, not after — companies commonly offer arrangements for vacant property, and the terms vary by company.

If you're doing both at once

Selling one house and buying another compresses all of the above into a single week. A workable sequence:

1. Under contract on the new house → start shopping immediately. Flag flood zone and coast on day one because of the waiting period and the inspection requirements.
2. Bind the new policy effective on your closing date. Ask for written confirmation of the effective date, not a verbal one.
3. Confirm the new policy is in force. TDI's rule applies here: written proof first.
4. Then cancel the old policy — dated to the day the house changes hands, not before.
5. Watch for the unearned premium refund and make sure it comes to you.

What to do with this

• Treat the closing date as an insurance deadline, not a paperwork one. Your lender's condition has to be satisfied before funding.
• Ask about flood and coastal wind first, not last. They have waiting periods, inspections, and hard cut-offs that ordinary home coverage doesn't.
• Never let a gap open between two policies. Written proof of the new one before you cancel the old one.
• If the old house will sit empty, say so out loud to your company before the 60-day mark.
• Check the numbers rather than assuming. TDI notes that "Most companies require you to insure your house for at least 80% of its replacement cost. Some companies require you to insure your house for 100% of its replacement cost" — a new house is a new rebuild figure.

Key facts

• Texas law doesn't require home insurance; your lender does. TDI: "The law doesn't require you to have home insurance. But if you still owe money on your home, your lender will require you to have it."
• The loan condition is often a specific kind of policy. TDI: "Most mortgage companies will require that you have a replacement cost policy as a condition of your loan."
• Flood is a separate policy with a wait. TDI: "Most flood policies have a 30-day waiting period before kicking in."
• Coastal wind can be a separate policy with prerequisites. TDI: TWIA coverage may require flood insurance first and "a home inspection by an engineer or a windstorm inspector," and "TWIA won't sell you a policy if there's a hurricane in the Gulf of Mexico."
• A new policy can be cancelled in its first 60 days if the company "doesn't accept a copy of a required inspection report before the policy starts."
• Selling doesn't cancel your policy — you do, and unearned premium must be refunded "within 15 days after the date of the cancellation."
• Don't create a gap. TDI: "Don't cancel your current policy until you get your new policy or a written statement that proves you have coverage."
• Vacancy is a live risk while a house is on the market. TDI: "Your house is vacant for 60 days or more. Most companies stop your coverage if your house is vacant for that long."
• Terms are not uniform. TDI: "Coverages vary by company. Read your policy or talk to your agent to be sure of your exact coverages."

Sources: Texas Department of Insurance — Home insurance guide, Tips to help you shop for homeowners insurance, and How to shop smart for home insurance. TDI's Help Line is 800-252-3439.

Take the next step

A move is the one moment when every insurance decision is genuinely open — new house, new rebuild cost, new roof, new risk map, and no inertia holding you to last year's policy. It's worth using, and it's worth starting the week you go under contract rather than the week you close.

Have Credify quote the new house before your closing date. Credify is a licensed insurance agency in Texas, and we compare options across multiple licensed Texas carriers in one short form, with no obligation; each insurer remains responsible for its own products. If you're deciding what to compare, how to choose home insurance in Texas walks through the coverages, how the wind and hail deductible works explains the number that decides your out-of-pocket cost after a storm, and independent agency vs going direct covers the two ways to shop. 📞 Talk to Credify 24/7.