Insurance for Empty Property in Probate

When the owner of a property sadly passes away leaving their property empty, the existing insurance may not be appropriate. If you are the executor it is important to consider the right insurance for empty property in probate.

Even if you have contacted the previous insurer to continue the insurance, there may be policy conditions that are difficult to comply with.  This is because most home insurance policies are not designed to cover long-term unoccupied properties.

From the insurer’s perspective, unoccupied properties are a higher risk and as such require a higher premium and additional policy conditions to mitigate their exposure to claims.  The most common claim is a result of escape of water, which undetected can be a significant loss.  Other claims like theft, vandalism and fire are also a greater risk for empty property.

For this reason, insurers will usually add new policy conditions to the policy, such as:

• Frequent property inspections which require the property to be checked at a specific frequency, which can vary by insurer.  It is common for inspections to be required every 7 days.  Some insurers may allow inspections every 14 days.  Most insurers will require written evidence of these inspections which need to be provided in the event of a claim.  If the property inspections cannot be evidenced an insurer could reject a claim.
• The requirement to drain water systems is another common policy condition.  If this condition is added and the system is not drained, claims from escape of water may not be covered.
• Applying a reduced single article limit on contents cover.  Unoccupied properties pose a greater risk of theft, so all valuables such as jewellery, art work or collections should be removed from the property and put in safe storage.  If the insurer is still prepared to cover the contents, they may apply a reduced single article limit.

The executors risks of arranging the wrong insurance for empty property in probate

From the executor’s perspective, the property needs to be insured in the name of the estate.  This ensures the proceeds of a claim have somewhere to go i.e. the estate.

Also, executors need to understand that arranging suitable property insurance is their responsibility.

The property must be insured to adequately cover the cost of rebuilding the property in full, including demolition and debris removal.  The property shouldn’t be insured for market value as this may not be enough cover.  If there is a claim and the property is under insured, the insurer is unlikely to pay the full value of the claim, or in serious cases, not at all.  This could leave the executors with the bill for the amount of underinsurance.

You can find plenty of examples on the financial ombudsmans website about underinsurance complaints. You can find an example here, where the claimants claim was reduced due to underinsurance.

The executor should also ensure the policy conditions are understood by all the executors and personal representatives.  If one executor fails to comply with a policy condition, it can create a liability for all. It is therefore suggested that the information on the insurance for empty property in probate is shared with other executors or beneficiaries likely to be visiting the property.

To illustrate the point, Imagine that the property has had its water systems drained down. But one executor refills the system to put the heating on whilst visiting the property. If there is now an escape of water claim that isn’t insured, all executors would have to foot the bill.

What if there is a fire at the property but it hadn’t been inspected in line with the policy conditions? 

If a claim would have been covered under an insurance policy but the insurance was either not in place or did not respond to a claim because of a breach of policy conditions, it will usually mean the executors have to put things right out of their own pocket.  Particularly as the beneficiaries will seek to be reimbursed for any uninsured losses.

It is for these reasons that you should consider property insurance early on in the probate process. 

Thankfully, Insuristic makes this easy for you executors.

You can buy insurance for empty property in probate online in a few minutes.  Here is why you should consider getting a quote from Insuristic:

• The policy is designed for unoccupied property in probate, with policy conditions that are less likely to catch you out
• You can insure the property for 3, 6, 9 or 12 months
• Choose from 3 levels of cover, Bronze, Silver or Gold
• We work out the rebuild cost for you, as long as the property rebuild cost is below £750,000.  If the property rebuild is higher, we can provide you with a quote offline.
• You can insure just the buildings or extend the cover to include contents up to £30,000
• Lastly, the property will only need to be inspected every 30 days.  This can be done by anyone with a mobile phone.  The only evidence of an inspection we need for someone to take and save, one picture of the outside and one inside of the property.  We don’t require written inspection reports.

If you want to find out more, check out our Probate House Insurance Page.

Visit our Probate Insurance page for details of our other products.