Factors affecting buildings insurance during probate for executors of an estate

If you are an executor handling the estate of a deceased person then you need to consider the insurance implications for the empty property.

When a property is unoccupied, awaiting grant of probate or for sale, the standard home insurance policy is very likely going to exclude most of the cover you need.

When a property is empty you need to advise the insurer that it is no longer lived in. Chances are that the insurer will say that ‘standard terms apply’. Standard terms does not mean that cover is unaffected. Most insurers will exclude theft, malicious damage and escape of water as a minimum restriction – as standard in their policy wording. When the contents are removed from the property there may well be additional terms and restrictions which apply to the policy cover as the property will be unfurnished. Many insurers will not even point this out the restrictions to you either as the staff don’t understand their own policies! Hot Tip – when looking at insurance policies – There is a difference between unoccupied and unfurnished.

The insurer may apply the restrictive terms straight away, after 30 days, or upon learning that a property is empty, they may even cancel the policy straight away.

Executors have legal obligations to carry out their role in a diligent and professional manner. Accordingly an executor must advise the insurer of the change in circumstances which affect the insurance risk. When doing so, it is essential that the executor insists on an endorsement from the insurer noting the fact that the property is unoccupied and must note the restriction in cover. Get everything ‘in writing’ and never trust a telephone conversation confirming ‘all is well’.

Specialist unoccupied property insurance policies are available which provide full, standard perils for unoccupied and unfurnished properties. There is no need to accept the sub-standard cover that is offered on a standard home insurance policy. It will cost more money and there will be terms which are applied regarding water management and security inspections etc but at least if there is an incident then it should be covered.

An executor is not necessarily the beneficiary of the estate and so is legally liable for their actions. If an executor fails to insure an empty property adequately and there is a claim, they leave themselves open to be sued by the beneficiary for repairs. Using an example of a frozen pipe, once thawed, if the water escapes and is not noticed a week then it can cause a serious amount of damage. Upwards of £30,000 is common with £65,000 being a typical cost. It will be very likely this is not be covered on a standard home insurance policy. If the executor has not covered the property correctly then they have potentially failed in their duty of care and can be pursued by the beneficiaries of the estate.

The moral of the story is – don’t leave the cover to chance, get specialist unoccupied property insurance from Day One…!

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