Deceased Home Insurance: What To Do?

Dealing with the death of a loved one is difficult, and the last thing you want is for their house to be uninsured. When a homeowner dies, their insurance policy does not automatically get cancelled or transferred to the beneficiary. It is up to the surviving spouse, family member, or estate executor to contact the insurance company, typically within 30 days, and submit a death certificate. If you don't notify the insurance company in time, the policy will likely be cancelled, and you will have to take out a new home insurance policy.

Notify the insurance company within 30 days

When a homeowner passes away, it is important to notify their home insurance company within 30 days. This is because a home insurance policy does not automatically get transferred to the beneficiary when someone dies. The policy will typically stay active for around 30 days after the policyholder's death, and failing to notify the insurance company within this time frame could result in the policy being cancelled.

To notify the insurance company, you will need to provide a death certificate, either by email or fax. If you are the surviving spouse, you may already be listed as a policyholder, which would make transferring the existing policy to your name a straightforward process. However, if you are not listed on the policy, you will need to take out a new insurance policy.

In addition to providing a death certificate, the insurance company may also require documentation proving your legal status, such as a letter of administration. It is important to ask about your coverage options and continue to pay the insurance premiums to ensure the current policy does not lapse. If you are selling the house, you may be able to keep the policy under the deceased owner's name and continue to pay the premiums until the sale is complete. Alternatively, if you are keeping the house, you may be able to transfer the existing policy to your name if you have proof that you are the beneficiary.

If the home will be vacant for an extended period, the insurance company will likely require you to add vacant home insurance coverage, as an empty home is at greater risk of vandalism and theft. This type of coverage typically requires regular inspections of the property for damage and break-ins.

Provide a death certificate

When a homeowner passes away, it is important to notify the insurance company as soon as possible. Typically, you have around 30 days to inform the insurance company of the policyholder's death. This can be done by providing a death certificate. Here are some detailed steps and considerations regarding providing a death certificate:

• Obtain Multiple Copies of the Death Certificate: It is recommended to obtain multiple certified copies of the death certificate as you may need to provide them to various entities, including the insurance company.
• Notify the Insurance Company Promptly: As mentioned earlier, most insurance companies have a timeframe, typically around 30 days, for you to notify them of the policyholder's death. Failing to do so within the specified timeframe may result in the insurance policy being cancelled. Therefore, it is crucial to act promptly.
• Provide the Death Certificate: When contacting the insurance company, whether by phone, email, or fax, you will need to provide a copy of the death certificate. This serves as official documentation and allows the insurance company to update their records and adjust the policy accordingly.
• Follow Up with a Phone Call: While sending the death certificate is essential, it is also a good idea to follow up with a phone call to the insurance company. This allows you to clarify their receipt of the death certificate and discuss your options for insurance coverage moving forward.
• Understand the Impact on Coverage: Providing the death certificate is crucial because it directly impacts the insurance coverage. In some cases, the insurance company may allow the surviving spouse to maintain the existing coverage by updating the policy details. However, if there is no surviving spouse, the estate executor will be responsible for managing the insurance policy and ensuring the home remains insured during the probate process.
• Be Prepared for Potential Changes: Depending on the situation, the insurance company may require changes to the insurance policy. For example, if the home will be vacant during the probate process, the insurance company may require you to purchase vacant home insurance or a special vacancy insurance policy. These policies can be more expensive, so it's important to understand the potential costs and options available.
• Maintain Open Communication: Throughout the process, maintain open and transparent communication with the insurance company. Keep them updated on any changes or developments, especially if there are delays in the probate process or if the status of the property changes (e.g., if it becomes vacant).

Remember, each insurance company may have slightly different procedures and requirements, so it's always best to refer to their specific guidelines and contact them directly with any questions or concerns.

Discuss options for a new policy

When a homeowner passes away, their insurance policy does not automatically get cancelled or transferred to the beneficiary. The surviving spouse or the deceased's family must notify the insurance company and transfer the name of the insured within 30 days. If the policyholder was the sole owner of the property, the family must contact the insurance company and ask to be listed as the "named insured".

If there is no surviving spouse, the deceased's estate executor is responsible for the home insurance policy. The executor must act to change the home insurance policy within 30 days or the remainder of the policy. During this time, the executor must continue to pay the current premium or risk a coverage lapse, leaving the home uninsured.

If the house will be vacant or rented out, the insurer will require that the policy be rewritten because the home will no longer be owner-occupied. The risk of theft, vandalism, and other losses is greater for vacant homes, and the insurance company will consider the property to be at greater risk. In this case, the heirs should notify the homeowners insurance company as soon as possible.

If the house is re-deeded to one of the children after the estate has been settled, then a new homeowner policy can be written for the child. The beneficiary will need to either transfer the current policy into their name or cancel the policy and take out a new one in their name. You should take out unoccupied property insurance if the property will still be empty. Alternatively, if the property is going to be occupied by the beneficiary, they can take out a standard house insurance policy.

It is important to note that each insurance company has different terms and guidelines, so it is essential to communicate closely with the insurer and ask about the options available.

Probate can be avoided with estate planning

When someone dies, their home insurance may need to be transferred to a new policy under a new policyholder. It is important to contact the home insurance company to inform them of the death and discuss your options, as failing to do so within a certain timeframe (typically around 30 days) may result in the policy being cancelled.

Probate is the legal process of administering and distributing a deceased person's assets, including their property, money, and possessions, as outlined in their will or according to the laws of intestacy if there is no valid will. This process can be complex, time-consuming, and emotionally challenging for the deceased's loved ones.

However, probate can be avoided with proper estate planning. Here are some strategies to consider:

• Joint Ownership: By owning property jointly with someone else, such as a spouse, with a right of survivorship, the ownership of the property will automatically transfer to the surviving owner without the need for probate. This is commonly done through joint tenancy or tenancy in common.
• Establish a Trust: You can transfer control of your property to a trust and designate a trustee to manage and distribute your assets according to your instructions, bypassing the probate process.
• Payable-on-Death Designation: You can name a beneficiary to receive the funds in your bank account upon your death, ensuring your loved ones receive the money directly without going through probate.
• Transfer-on-Death Securities: Similar to payable-on-death designations, you can designate beneficiaries for stocks, bonds, and other securities, allowing for a direct transfer without probate.
• Transfer-on-Death for Real Estate and Motor Vehicles: Some states allow you to designate a beneficiary for real estate and motor vehicles, enabling a direct transfer upon your death and avoiding probate.
• Give Away Property: Transferring property before your death can help avoid probate, but it's important to consider the tax implications and the fact that you will no longer have use of the property.
• Small Estate Provisions: Many states have simplified procedures for smaller estates, certain types of property, or when everything is left to a surviving spouse, making the probate process quicker and less cumbersome.

By implementing these estate planning strategies, you can help ensure that your assets, including your home, are distributed according to your wishes while avoiding the potentially lengthy and costly probate process.

Contact the insurer to confirm the change of name

When a homeowner passes away, the insurance policy does not automatically get transferred to the beneficiary. Instead, the surviving spouse, family member, or estate executor should contact the insurer and submit a death certificate within 30 days of the homeowner's death.

Notify the insurer as soon as possible, ideally within 30 days of the policyholder's death. Most insurance companies give at least 30 days for the family to inform them about the death of the policyholder. If you don't notify the insurer within their specified time frame, they will likely cancel the policy, and the home will be without coverage.

Provide the insurer with a death certificate and any other required documentation. Some insurers may also require additional documentation, such as a letter of administration or a notarized declaration of heirship. The exact requirements may vary depending on the insurer and the specific situation.

If you are the surviving spouse and are named on the homeowners policy, the existing policy will typically remain in effect. However, you should still let the insurer know about the policyholder's death so that the policy information can be updated. The insurance company will remove the deceased and replace them with the surviving spouse as a named insured.

If you are not listed on the policy or if all the people listed on the policy have passed away, the policy becomes the responsibility of the legal representative of the estate for the term of the policy. In this case, notify the insurance company that you are now their primary contact and provide them with the required documentation.

It is important to keep the home insurance policy active to protect the property. If the policy lapses, the home will be uninsured, and you may have difficulty obtaining a new policy.

Frequently asked questions