Who keeps the house insured after someone dies? What to do in the first weeks

When a homeowner dies, the house often sits empty while the family sorts out the estate. That's when the insurance is most likely to fail, and nobody finds out until there's a claim.

Does the policy end when the owner dies?

No. Progressive says a homeowners policy doesn't automatically cancel when the policyholder dies. The standard homeowners form (the HO-3) covers the legal representative of the person who died, for the home and belongings the policy covered at the time of death. Until a representative is appointed, the person with proper temporary custody of the property is covered too.

But the policy only stays in force while the premium is paid. If it was paid automatically from an account that gets frozen or closed, it can lapse without anyone noticing.

The first call: tell the insurer

Call the insurance company or agent as soon as you can. Progressive says a spouse, family member or executor should contact the insurer and send a copy of the death certificate, within 30 days. Have ready:

• The policy number (it's on the declarations page and on any renewal bill)
• A copy of the death certificate
• If there's no surviving spouse, the court paperwork showing who the executor is
• Whether anyone is living in the house now, and what the plan is for it

Ask three questions and write down the answers:

1. Is the policy active, and when is the next premium due?
2. Who is insured under it now, and for how long?
3. What happens to the coverage if the house is empty, and after how many days?

With no surviving spouse, the executor is responsible for the policy. Progressive says an insurer may give the executor 30 days, or the rest of the policy term, to get the right coverage as the new policyholder. The premium still has to be paid in the meantime.

The empty-house problem

This is the part that catches families out. The Insurance Information Institute says most homeowners policies have a vacancy clause that limits or excludes coverage once the home has been unoccupied for, typically, 30 to 60 days in a row. On the standard HO-3 form, vandalism isn't covered once the house has been vacant for more than 60 consecutive days. Theft and damage by trespassers are among the losses commonly limited or excluded too.

Insurers draw a line between two words:

• Unoccupied: the furniture is still there, and nobody is living there for now.
• Vacant: the house has been emptied, and nobody plans to move back in.

A house being cleared out for sale moves from the first to the second, often without anyone saying so. Ask the insurer which one they consider the house to be, and from what date.

If the house will sit empty, ask about a vacancy permit or endorsement on the current policy, or a separate vacant-home policy. Either costs more than a regular homeowners policy. Both cost far less than a loss that isn't covered.

Keep the house from becoming the claim

Most expensive claims on empty houses start small: a frozen pipe, a slow leak nobody sees, a broken window.

• Keep the heat on in cold weather, or have the water shut off and the pipes drained. The standard form doesn't cover freeze damage unless reasonable care was taken to do one or the other.
• Have someone check the house every week or so, inside and out, and note the dates.
• Keep the utilities, mail and yard looked after so the house doesn't look empty.
• Take out or list the valuables. Jewelry, cash, firearms and papers left in an empty house are a theft risk.
• Keep it locked, and write down who has a key.

If the person had other policies on the property, such as flood insurance (always a separate policy) or an umbrella policy, give each insurer the same call.

A short checklist

1. Find the policy: the declarations page, a renewal bill, or the agent's name on a bank statement.
2. Make sure the premium is paid and isn't drawn from an account that's about to close.
3. Call the insurer, send the death certificate, and ask the three questions above.
4. Ask how long the house can sit empty, and arrange vacancy coverage if it will.
5. Arrange heat (or a drained system), regular checks, and locked doors.
6. Write down every call: the date, who you spoke to, and what they said.

Ordering death certificates? Insurers are one of the places that want a copy. How many death certificates do you need?

Insurance trouble after a death rarely comes from a bad decision. It comes from a call nobody made. Make it this week.