Homeowner's insurance covers a specific home. It is sold to a specific person or persons who own the home. It cannot be automatically transferred to a new owner. When the owner dies, a new owner inherits the property. That new owner must purchase his own policy. Within time limits, the deceased person's policy remains valid until a new policy can be put in place. The new owners have a limited time period to purchase a new policy.
The deceased's homeowner's policy does not terminate at death. It has an expiration date like every other policy. Most homeowner insurance policies are paid in advance and cover a one-year period. There are situations where policyholders make periodic payments. In those cases, the policy terminates early in the event of non-payment. The only way to know when the policy terminates and what happens at the death of the owner is to read the policy. If the policy cannot be found, track down the insurance company by going through the deceased's records.
Notify the deceased homeowner's insurance company as soon as possible. Call and then follow up with a letter. Give them the date of death and provide a copy of the death certificate. Provide the names of the new owners along with telephone numbers and addresses. This would include the executor of the estate and all heirs to the home. Verify the expiration date of the policy. Ask for a current copy of the policy. Make certain the policy is paid up through the expiration date.
Review the existing policy. It may not provide adequate protection. The deceased may have renewed it each year without considering if circumstances warranted an update. The home may be entitled to certain credits like smoke detectors or a home security system. There may be valuable personal property like jewelry that requires special coverage with a rider. The information about the nearest fire department may be outdated. Look at the policy as if a new policy is being purchased. If the home is going to be vacant, make sure the policy provides protection.
Once the deceased's policy is safely transferred to the new owners, other alternatives should be explored. Like everyone else, the executor and heirs can switch companies. If the home is going to be vacant for more than 30 days, consider which companies provide the best coverage. Empty homes create opportunities for claims. Heirs and executors need strong protection. Do not rely on the deceased's policy. Make sure the transition to new ownership is smooth and results in good coverage.
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