Probate is a legal process that occurs after someone passes away, involving the distribution of their assets and the settling of debts. Among the assets often left behind is a home, which requires special attention—particularly when it comes to homeowners insurance. Understanding what happens to homeowners insurance during probate can help ensure the property remains protected while ownership and legal matters are resolved.
The Importance of Homeowners Insurance During Probate
During probate, it is essential to maintain homeowners insurance coverage on the property. Without insurance, the home is vulnerable to risks like fire, theft, vandalism, or natural disasters. If damage occurs without active insurance, the estate’s value could be significantly diminished, leaving less for heirs and other obligations.
Steps to Take with Homeowners Insurance During Probate
1. Notify the Insurance Company
The first step is for the executor or administrator of the estate to contact the homeowner’s insurance provider. Inform them of the homeowner’s passing and discuss any necessary updates to the policy. Some policies may need modifications to reflect the property’s new status.
2. Addressing Vacancy Issues
If the home will remain unoccupied during the probate process, this must be communicated to the insurance company. Most standard homeowners insurance policies include a vacancy clause that may limit or exclude coverage after a specific period, often 30–60 days. To ensure continued protection, the executor might need to purchase vacant property insurance, which is tailored to cover unoccupied homes.
3. Maintaining Policy Payments
Homeowners insurance premiums must be paid during probate to keep the policy active. The executor should ensure that these payments are made using estate funds. Failing to do so could result in a lapse in coverage, leaving the property unprotected.
4. Securing the Property
The executor is responsible for maintaining and securing the property. This includes:
- Ensuring doors and windows are locked.
- Keeping the home in good repair.
- Maintaining utilities if necessary to prevent damage, such as freezing pipes. These actions may also be required by the insurance policy to avoid claim denial.
Transfer of Ownership and Insurance
Once probate concludes and ownership of the property is transferred—whether to heirs, beneficiaries, or a buyer—the current homeowners insurance policy cannot be transferred to the new owner. Instead, the new owner must secure their own policy. If the property is sold, the executor should coordinate with the buyer to ensure there is no gap in coverage during the transition.
Special Scenarios to Consider
If Heirs Move In
If an heir decides to live in the property during probate, the executor must notify the insurance company. The policy may need adjustments to reflect the new occupancy status.
If the Property is Rented or Sold
If the home is rented out or put up for sale during probate, this could also affect insurance coverage. The executor should consult the insurer to ensure the appropriate type of policy is in place, such as a landlord or builder’s risk policy.
Protecting the Estate with Proper Insurance
Keeping homeowners insurance active during probate is not only a legal responsibility of the executor but also a critical step in preserving the estate’s value. Here’s a quick summary of steps to take:
- Review the existing policy to confirm coverage and payment status.
- Notify the insurer about the homeowner’s passing and the property’s status.
- Purchase vacant property insurance if needed.
- Ensure the property is secure and maintained.
- Communicate with heirs or buyers about their insurance needs after ownership transfer.
By taking these actions, executors can ensure that the property remains protected throughout the probate process, minimizing risks and financial losses for all parties involved.