Homeowners Insurance And The Death Of An Owner

When a homeowner passes away, the family and executor have a lot of work to do. You may not immediately think about what needs to happen with property insurance. But this is an important task. What should you know about homeowners insurance right now? Here are a few key points. 

1. You Should Notify the Insurer Quickly   

The first step in managing real property insurance is to notify the insurance company of the person's death. Do this as soon as is feasible. In general, you will likely need a death certificate and proof of assignment as an estate executor or personal representative. The company can cancel coverage if you wait too long or fail to pay. 

2. You May Need a New Policy

Each carrier handles the death of an insured differently. In some cases — particularly if you were also included on the policy in any way — you may be able to simply keep paying the premium until the natural expiration of the policy. However, you may need to buy a new policy under your or the estate's name. 

3. The Estate or Family Can Insure It

Who should insure the home? In most cases, the estate — through its executor — takes on this responsibility. After all, the executor is responsible for protecting and managing the estate's property. However, family or heirs may choose to buy a policy instead. This is most common when the estate lacks available funds, although the family may simply opt to help out the executor. 

4. Vacant Properties Are Covered Differently

Finally, will someone continue to live in the home or not? If it stays vacant pending a sale or distribution, the estate may need to buy a vacant property insurance policy. If no one is living there and something happens, the carrier could deny a standard claim. 

5. You May Be Reimbursed

If you — as an executor, heir, or another interested party — buy or pay any premiums on a homeowners policy, you may be reimbursed by the estate. Insurance is a legitimate expense for the estate. If you don't submit reimbursement, though, you may get a tax deduction. Check with your tax professional.

Where to Start

The right insurance coverage is vital when a property is vacant, changing hands, or being repaired. So make sure this real estate is appropriately covered. Start by meeting with a homeowners insurance company in your state today.