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When you inherit a home, update the insurance policy

By Emmet Pierce on March 29th, 2012

If someone close to you dies and you inherit their home, you need to quickly update the homeowner insurance policy.

If your name was not on the policy at the time of the original owner's death, you won't be able to prevent an interruption in coverage just by continuing to pay the premiums. It's always important to tell the insurance company when a home has a new owner.

Usually the existing policy will continue for a period after the policyholder has died. It likely will be in effect for the remainder of the policy period, but you should contact the insurance carrier to be sure.

Make sure you're covered

It's a mistake to make assumptions about how an insurance provider will handle claims by heirs after a homeowner dies. Send a letter notifying the insurance carrier of the death and asking if the current policy will remain in place. Be sure to save the reply in case there later is a dispute.

If you plan to sell the home you have inherited, don't try to get by without a current policy until a new owner takes possession. If there is a claim during a coverage lapse, you could get stuck playing for any losses.

If you were living in the home you inherited at the time he original owner died, you may be able to keep the existing policy. Generally, homeowners can provide protection for heirs who are part of their immediate family by adding them to their home policy.

Vacancy insurance

If your inherited dwelling is empty and remains so for more than 30 days, you may need to purchase additional coverage. Most standard home policies exclude coverage for damage that was caused because the home was left vacant.

Vacant homes create a greater risk for insurance companies because no one is there to report problems that may get worse over time. Also, an empty home is much more likely to be vandalized or targeted by thieves.

It's wise to have your inherited home inspected for structural integrity. If the existing insurance policy was purchased many years ago, it may no longer be adequate. An inspector can help you determine if the present level of insurance is high enough to repair or replace the structure.

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