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Is House Insurance Required For A House In Probate?

An important obligation that executors must fulfill is to ensure that the estate of the deceased is adequately protected during administration of the estate until it is able to be divided among beneficiaries. What is the process if the deceased’s estate includes assets? What is the most important aspect of home insurance? be? In short, it’s very important. Relying on the existing insurance or not insuring assets in a proper manner can have grave consequences.

It is essential that the assets of the estate are protected. Executors who fail to ensure this is done may be personally responsible for any losses incurred by the estate, if it is determined that they did not ensure the proper care was taken in ensuring the property was insured.

Practical steps

If you’ve been appointed as executor, and the estate contains an unoccupied property (which is currently vacant) you must:
Contact your current insurance company for information about the new conditions and determine if the current policy offers adequate coverage.

If the estate includes the house that was later abandoned and vacant, the status of insurance and you should avoid taking a reliance on an existing policy. Although the deceased may have had sufficient insurance coverage for the house, when it is an unoccupied house, insurers will need to ensure that the policy is updated or a new one bought.

Be sure to consider the scope of any amended or new policy

Although an insurer may keep providing assurance, it’s highly likely that the cost will be greater. Furthermore, it’s likely that the coverage will be limited. Insurance companies have a tendency to limit the damage to property that is not occupied to damages caused by lightning, fire or aircraft, as well as explosions. What is this to you? If your home was such as a burglary or vandalized, the insurance policy will not cover the damage. In these circumstances as executor, you could be held responsible for the costs of repairs, or any variation in the valuation of the property.

If the insurance company does offer extensive coverage, they might make you subject to a string of conditions as executor. Most insurers offer comprehensive coverage for properties that are not occupied will require regular (e.g. fortnightly) inspections. In the event of a failure to comply, it could cause the claim to be rejected. In the event that your property has been placed already on the market, the estate agent could help you (for cost, possibly) however as the executor, you are responsible to make sure that the terms that are set out in your insurance contract have been met to.

Any new or amended policy must be issued in the names of executors. The executors’ interest being “noted” does not automatically allow them to file an claim or get the benefits of any claim-related proceeds payable under the policy. It could mean they are notified when the policy has been cancelled or expired.

Select the right insurance provider

It is important to consider the insurance company you choose to use and if they have knowledge with probate properties. Some specialize in probate insurance and could have a better understanding of the duties of being an executor.

Be aware of (increased) premiums for insurance

In the event that your estate’s assets are cash-limited there could be issues with the payment of the probate house insurance premium. An insurer that is specialized may grant the period during which no unoccupancy terms will apply or permit an extension of payment until funds are received from the estate.

Do some sensible steps

Some practical steps to take include: making sure the home is secure by shutting off the unnecessary utility services; taking out valuable items for secure storage until they are distributed to beneficiaries, and keeping a log of these items. Also, regularly making a visit to check on the property and to collect the post (or request a trusted neighbor to monitor the property) Consider maintaining the lights (on schedule) and heating on during the winter seasons.
Consult with a lawyer in the context of the administration of your estate if you haven’t taken this step.

Additional details

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