The importance of reviewing property insurance early in probate

When a property owner sadly passes away, leaving their property empty, the existing insurance may not be appropriate.

Even if the previous insurance provider has been contacted to continue the insurance, policy conditions may be difficult to comply with.  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 the 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 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.
• Drain down water systems: Another common policy condition is the requirement to drain water systems. If this condition is added and the system is not drained, claims resulting from water escape may not be covered.
• Reduced Single Article limit: A reduced single article limit on contents cover is usually applied. Unoccupied properties pose a greater risk of theft, so valuables such as jewellery, artwork, 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 Risks for Executors

From the executor’s perspective, the property must be insured in the estate’s name.  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, as is ensuring that all the executors and personal representatives understand the policy conditions. If one executor fails to comply with a policy condition, it can create a liability for all.

Imagine that the property’s water systems have been drained. But one executor refills the system to turn on the heating while 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 hasn’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, the executors will usually have to pay for it out of their own pocket, particularly as the beneficiaries will seek to be reimbursed for any uninsured losses.

For these reasons, you should consider property insurance early on in the probate process.

Thankfully, Insuristic makes this easy for Solicitors and their clients, as well as executors who are responsible for arranging insurance.

If you are arranging insurance as the executor please visit our probate house insurance page.  Our policy has been specifically designed for insuring unoccupied property in probate.  You can choose from 3 levels of cover, with policy conditions that are less likely to catch them out.

If you are a Solicitor, you could sign-up to Probate Pro. This product has been designed to help law firms arrange insurance for unoccupied property in probate via their own online portal.  There is one broad level of cover with premiums paid on interest free, monthly on account. If you have a Solicitor, ask them about Probate Pro.

You can find out about all of our Probate Insurance products here.

But for quickness, here are a number of useful pages for executors and probate professionals:

• Executor Insurance Guide
• Early Distribution Insurance
• Missing Beneficiary Insurance
• Missing Will Insurance
• Section 27 Insurance