If You Inherit a Home, Call Your Home Insurance Company

If you stand to inherit a home, homeowners insurance coverage should definitely be on your radar.

Homeowners insurance is probably not going to be the first thing you think of when a parent or someone close to you dies, but if you stand to inherit a home, homeowners coverage should definitely be on your radar.

While there will be plenty of paperwork to deal with in the coming months, maintaining the homeowners insurance on your inherited home is an absolute necessity, regardless of whether you plan on living there in the future, renting it out or putting it on the market.

If the home is damaged due to a storm, starts on fire or a pipe bursts, the resulting damage can become a catastrophic expense you will have to pay out of pocket if you don’t have the proper coverage,

If you plan on renovating the home before putting it on the market, an injured contractor could sue and without liability coverage, both the medical and possible lawsuit costs could fall to you.

So just what should you do (insurance wise) if you inherit a house? Keep reading to learn how to protect yourself and your new house.

Call Your Insurance Agent: If it’s your spouse that has passed on and you are named on the homowners policy, the existing policy will continue. You will simply need to let your insurer know that your spouse has died and you need to update the policy information. It’s possible your insurer will require a copy of the death certificate.

If you are not on the policy, or if all of the people on the policy are dead, the policy becomes part of the estate and the legal representative of the estate. If you are this person, you will need to contact the insurer and let them know that you are now the main contact for the policy. In most cases you will have to provide certain documentation, such as a letter of administration and a death certificate.

In most cases, the insurer will leave the current policy in place until the expiration date. Verify that is the case, as well as coverage levels, any payments that are still due and when the policy expires so you have all of the relevant details. Ask for a copy of the policy to be sent to you.

Make All Premium Payments: The last thing you need is a lapsed policy so make sure that all remaining payments are paid on time. It’s possible that the premium payment is made through the mortgage escrow account instead of directly to the insurance company.

Insurance companies will usually issue a warning 30 to 45 days prior to cancelling your policy, but it can be as little as 10 days. In the event that you do miss a payment or are not paying your insurance policy at all, the mortgage holder (the lender on the house) may place on a policy on the house but they will bill you, or the estate for it. Unfortunately, these “forced placed” policies tend to be expensive and offer much lower coverage levels.

Maintain the Property: Insurance companies do not like vacant houses for good reason. A burst water pipe can quickly turn into a flooded home if no one is there to witness and repair the original leak.

If it is impossible for you or a close friend or relative live in the house, arrange for someone to stop in at least twice a week (and especially after a major storm) to make sure the house is all right.

Get a New Policy: Eventually, you will need a new policy, especially if you plan on keeping the house. If you are selling it, and can manage to close the sale before the original policy expires, you should be good, as long as you make the policy payment in a timely manner and the policy doesn’t lapse.

If you plan on keeping the house, it will be necessary to get your own policy. Expect the insurance company to want to do an inspection of the home before writing a policy and the new premium will be based on your information (think credit rating) so the premium may be headed up or hopefully, down.

If you are unhappy about the rate you are quoted, the best way to lower your premium is to shop your coverage. Insurers rate risk differently so finding the insurer that likes your type of risk is the best way to save money on your policy.

We can help. Simply fill out our quick and easy home insurance online quoting application and HomeInsuranceKing.com will help you compare up to 12 rates and coverage options. Take advantage of our free quoting and consultation services. We look forward to working with you!