Probate and inheritance - how to deal with the financial affairs of someone who has died

Probate: unoccupied property –
do I need house insurance?

7 October 2019

One important responsibility executors have is to ensure that the deceased’s estate is properly protected during the estate administration until it can be distributed to beneficiaries. What happens if the deceased’s estate includes property? How important can home insurance be? In short – very. Relying on existing cover or failing to insure assets properly can have serious ramifications.

It is important that the estate’s assets are properly insured. An executor who fails to do this could be held personally liable for any losses suffered by the estate if it's felt they failed to take the necessary care by making sure the property was adequately insured.

Practical steps

If you have been appointed as an executor and the estate includes a property (which is now unoccupied) you should:

Contact the current insurers to inform them of the change in circumstances and consider if the current policy provides adequate cover

When an estate includes a house, which later become unoccupied, this changes the insurance position and you should be wary of relying on any existing policy. While the deceased would have had adequate insurance on the property, for an unoccupied property, insurers will require that the policy is either updated or a new policy is purchased.


Carefully consider the coverage of any new or amended policy

Even if an insurer does continue to provide insurance, it is likely that the premium will be higher. In addition, it is possible that the coverage may be restricted; insurers are known to restrict damage to an unoccupied property to only damage caused by fire, lightning, aircraft and explosion. What does this mean for you? If the property was, for example broken into and vandalised, the policy would not provide cover. In such circumstances, as an executor, you may be held liable for the cost of repairs or any difference in the property valuation.

If the insurer does provide comprehensive cover, they may place onerous conditions on you as the executor. Often insurers, in exchange for comprehensive cover for unoccupied properties, will require regular (e.g. fortnightly) inspections. Failure to do so would result in the claim being rejected. If the property is on the market then your estate agent may do this for you (for a fee possibly) but as the executor it is your responsibility to ensure the conditions of the insurance policy are complied with.

Any amended or new policy should be in the name of the executors. Having the executors' interest ‘noted’ does not necessarily entitle them to make a claim or to receive the benefit of any claim proceeds payable under the policy; it may only mean that they are notified if a policy cover is cancelled or lapsed.


Choose the insurer provider carefully

You should carefully consider the insurer you are using and whether they have experience of probate properties. Some specialise in probate insurance and may be more understanding of the responsibilities attached to being an executor.


Be mindful of (increased) insurance premiums

If the estate is cash limited, you may have problems with payment of the premium. A specialist insurer may allow a period of time where unoccupancy conditions will not apply, or allow deferred payment of the premium until funds are available from the estate.


Take some practical steps

Practical steps can include: ensuring the property is secure; the turning off of unnecessary utilities; removing items of value for safe keeping until they are distributed to the beneficiaries and keeping a record of these items; regularly visiting to check up on the property and collect post (or ask a trusted neighbour to keep an eye on the property); and consider keeping the lighting (on timer) and heating on over the winter months.


Seek legal advice in respect of the estate administration if you have not already done so


Further information

For further information on the issues raised in this blog, please contact a member of our team.

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