Insurance Coverage

There can be gaps in insurance coverage for the deceased owner’s property after the death of the insured owner. The homeowner’s insurance coverage is the most notable place to be on alert. The analysis is different based on how the owner had the property titled. Here are a couple variations of what could happen with the insurance coverage. Regardless of which scenario applies to your situation, it’s important to reach out to the home and auto insurance agent as soon as possible. The agent can make sure that the policies are all paid up and that the proper coverage is in place.

If someone died as the sole owner of real property, the coverage will often extend to cover the home and vehicles that now belong to the estate. The policy premium still needs to be paid up and there may be additional premiums of the home is going to be vacant for an extended period of time.  This a because nobody is in a vacant home  to make sure that it is safe from damage and intruders.

If someone died as the sole owner of real property with a transfer on death designation affidavit, there is not insurance coverage after the death of the deceased owner. This can be a very harsh reality because many people relied on these affidavits to avoid probate. I always explain this point to clients because there can be a lot of exposed risks in a home after the decedent passed away. An unsavory person likely knows that nobody is home and that nobody is checking in on the place. It is somewhat rare that a house would burn down. But it has happened. I would tell someone to consider that an obituary is basically an advertisement of a time when the home will be unoccupied. The burglar knows the opportune time to break in. It’s much better to have a house and take it through probate than to not have a house and have to pay for an expensive cleanup out of pocket.

Someone should promptly notify the insurance agent after the death of the insured owner. This step can eliminate gaps in coverage.