NYC Insurance Blog

What Happens to Homeowners Insurance During Probate?

Homeowners insurance protects a home by covering damages incurred or eventual property loss. Also, the policy covers liability costs if accidents or injuries occur on the property. If the homeowner dies, the executor or next of kin must contact the insurance company within 30 days. Although the process might vary from one insurer to another, expect to send a copy of the death certificate to facilitate the process.

Depending on the circumstances, the insurance company may request you to email or fax a court order, updated deed, or will of the deceased. It is important to contact the insurer as soon as possible; otherwise, they will cancel the policy. Losing a loved one is devastating, and insurance companies understand the ordeal. Therefore, most insurers accept a phone call as a way of notifying them about the demise of your loved one. 

While some insurance companies leave the policy intact until its expiration date, others give a grace period of 30 days to discuss your options. It is prudent to inquire how much time you must adjust the policy to avoid a coverage lapse. Let us help you with your Homeowner's insurance so you are not left navigating what to do, alone!

Transferring the Homeowners Insurance After the Owner Dies

Dealing with homeowners’ insurance during probate is tricky and consulting an insurance agent is the best approach. Remember, the process can take months, risking cancelation or coverage lapse. Therefore, you must act fast and seek legal advice to make the right choices. Firstly, you must notify the insurance company and ask the right questions. For example, inquire about your coverage options, when to pay premiums, and the documentation you need.

If you are a surviving spouse, there is a high possibility of keeping the current policy until it expires, especially if you are name insured. However, you must adhere to the insurance company's guidelines. If you inherited a home, the previous insurance policy is not passed to you automatically. The simplest way to maintain coverage is to provide the proper documentation and have the insurer rewrite the policy. During the probate process, here are your options:

• If you intend to sell the house, keep the policy under the deceased's name and continue paying premiums until you sell the home. If that's not possible, you must purchase a new policy. 
• You can transfer the existing policy under your name if you intend to keep the house. However, you must prove you are a beneficiary or next of kin. If the house is vacant, consider notifying the insurer and purchasing vacant home insurance or an endorsement to protect your property. 
• If you don't know whether you want to occupy, sell or rent out the home, consider purchasing temporary insurance. 

Discussing your options with an insurance agent is highly recommended. If the house is empty, the insurer considers it a risk, and the premiums might go up. Alternatively, the insurer might opt to cancel the policy for you to purchase vacancy insurance. Besides incurring hefty costs, you risk theft or burglary losses if the home is uninsured. Be proactive and ensure the estate is adequately covered if you are the beneficiary. If you are a beneficiary, here are crucial things you should do to ensure your home is protected:

• Call the insurance company, or your Insurance Agent within the stipulated period 
• Avoid leaving the house vacant to avoid coverage cancelation or purchasing pricey vacancy insurance
• Continue paying the homeowners insurance premiums 
• Inquire about your coverage options and consult an experienced insurance agent
• Ask about homeowners insurance coverage riders since some people purchase mortgage life insurance policies which means the insurer should pay the mortgage after the homeowner dies 

Purchasing a New Homeowners Insurance

After the probate process, the new homeowner should notify the insurance company and purchase a new policy. The new homeowner can shop for better rates or continue with the current insurer. Whether the home is sold or awarded to an heir, the new homeowner must submit proof of ownership and other relevant information, such as renovations or repairs, before buying a new policy. The purchased coverage should represent the home's value and contents. It is the responsibility of the new homeowner to buy sufficient coverage by keeping track of the home value and personal belongings. For example, if the estate was divided, monthly premiums might change depending on the assets you inherited.

 

Dealing with the loss of a loved one and homeowners’ insurance can be overwhelming. However, if you follow the right steps and seek professional help, you can do it. Finally, remember that states have different laws relating to home transfer, homeowners’ insurance, and probate after the homeowner dies. Research well and consult your insurance agent to handle financial and legal affairs effectively. Having an Insurance Broker takes the guessing out of what is to be done next, let us help you today!

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