People get insurance to protect themselves from financial losses that might occur if something terrible happens to their homes. But what happens to homeowners insurance when someone dies?
The answer, as usual, depends on the insurance company and the policy. But in this case, other factors can play a role, such as:
- Whether the deceased was a named insured or an additional insured.
- Whether an executor has been named or not.
- What plans have been made for the house.
This article looks at several possible situations and provides general advice for dealing with house insurance after the death of the policyholder.
For Kin-specific information, please see our article “How Kin Handles the Death of a Customer?”
What to do with homeowners insurance during probate
Every insurer handles a policyholder’s death differently. Insurers may even have different requirements for different policies. That said, these three steps should hopefully get you on your way to figuring out what to do in your particular situation:
Contact your insurer
As uncomfortable as it may be, you need to let the insurance company know that a policyholder has passed. Most companies give you about 30 days to do this, and many accept a phone call. However, you will likely need to fax or email your insurer a copy of the death certificate.
Please note that sometimes a death certificate isn’t available as quickly as an insurance company might want it. You still want to let the insurer know about the policyholder’s death. Some may accept other documentation, such as:
- A court order.
- The will of the deceased.
- An updated deed.
If you don’t notify the insurance company, it may cancel the policy, leaving the home unprotected from loss. This can lead to problems for the executor who is managing the estate or for the person who ultimately inherits the house.
Check into coverage options
When you notify the insurance company, take a moment to ask about coverage options. Many may allow you to keep the same policy until it expires as long as you pay the premium. Others may ask you to buy a new policy. Be sure to note details, particularly deadlines, so you don’t have an insurance lapse.
Ask about homeowners insurance during probate
Probate adds another wrinkle to explaining what happens to homeowners insurance when someone dies. The laws governing probate vary by state, so it’s difficult to provide a general description of what to do. Probably the most important step you can take is to keep in touch with the insurer as things change.
For occupied house insurance during probate, you may want to get coverage in the executor’s name, especially if you plan on selling the property. Another issue to note is whether the house in question is going to be vacant for a month or more. That often requires a different policy called vacant home insurance.
How to transfer homeowners insurance for estate property
Transferring homeowners insurance on an estate property to a new owner often starts by determining who the deceased person is in relation to the policy. The people protected by a homeowners policy are typically called insureds, but there are different types of insureds:
- Named insured, or the person or entity that the policy protects.
- Additional insured, or a person or entity added to the policy.On a home insurance policy, the named insured is typically the policyholder, or the person who purchased the coverage. Other family members living in the home are usually considered named insureds, too.
When a primary policyholder has died and there are no other insureds, then the insurance company will likely:
- Need a copy of the death certificate, will, or other documentation.
- Update the named insured to the estate of the deceased.
- Want the name of the estate executor.
- Ask what you plan to do with the house.
Insurance companies can usually hold off on making major changes to the policy until an executor is named. Keep in mind, too, that the insurer will likely decide that the policy cannot be renewed, which means you’ll want to be aware of its expiration date to avoid a coverage lapse.
Once the insurance company knows what’s happening to the house in question, its representative can help you figure out the next steps for transferring the home insurance. For example, if the house is to be:
- Transferred to a relative, then you may need to go through the underwriting process to transfer the policy.
- Rented to someone, then the coverage will need to be rewritten as a DP3 policy.
- Sold to a third party, then the insurer will probably cancel the policy.
Remember, again, that insurance companies can have their own process for transferring home insurance after someone passes. Your insurer’s representative should be able to help you navigate the steps.
What happens to homeowners insurance when a spouse dies?
After a spouse passes, the surviving spouse’s status on the home insurance policy can also come into play. Some insurers make both spouses named insureds, while others may choose to have one be the named insured and the other an additional insured.
Let’s say the primary policyholder, or named insured, has passed away, and the surviving spouse is an additional insured. The insurance company may be able to simply make the surviving spouse the named insured. On the other hand, if the deceased was an additional insured, the primary policyholder remains the named insured.
Either way, the surviving spouse needs to inform their insurance company to get the process started. Moreover, the insurance company will ultimately need to remove the deceased from the policy. This usually doesn’t happen until the estate has gone through probate.
While dealing with probate may be a new experience for you, understand that insurance companies deal with homeowners insurance for probate every day. They have policies and procedures to handle the issue. Ask a lot of questions to make sure that you have the right coverage for the home while it transfers from one owner to the heir.