As a homeowner, understanding your homeowners insurance policy is a vital part of being prepared for the unexpected. While life unfolds, so do our plans, and sometimes that means dealing with tough situations such as death.
We all know having to handle estate matters can be especially daunting at this time of loss. But did you know that sometimes homeowners insurance may factor into what happens to your home after passing away?
If you’re wondering what role your policies play after death and how they might affect your family’s future security, then read on! In this post, we’ll explore the importance of understanding homeowners insurance details when someone passes away.
THE BASICS OF HOMEOWNERS INSURANCE AFTER DEATH
With homeowners insurance after death, there are two potential scenarios depending on your policy type.
- If the deceased was the sole owner of the policy, the estate or new owner would need to secure a new policy immediately.
- If multiple owners are listed on the policy, it will remain active until all of its owners have passed away or one requests for it to be canceled.
Suppose you have an escrow account associated with your homeowners insurance policy. In that case, any remaining funds in that account will be refunded to the surviving spouse or estate upon cancellation.
What Happens to A Homeowners Insurance Policy If A Spouse Dies?
It’s critical to know that the death of a spouse does not automatically cancel their homeowners insurance policy or any other policies the couple shared. Most times, the policy will remain in effect until the surviving spouse updates it, often with a new name.
Changing an existing policy is typically straightforward and can be handled quickly by discussing options with an insurance agent. In addition, it’s crucial to remember that some modifications may need to be done to continue coverage on the same terms, such as adding insurance or splitting payment installments between two accounts.
These steps are necessary to ensure that one’s property and belongings remain fully secured against any eventuality.
What Changes May Be Necessary After Someone’s Death?
Additional changes may need to be made following death for an existing homeowners insurance policy to remain active. For instance, if there’s no longer anyone living in the home or if they’ve made significant renovations since getting coverage, then additional adjustments may need to be made for coverage limits and other details to remain accurate.
While homeowners insurance typically remains active after one of its holders passes away, there are specific steps that you must take in order for coverage levels and other details to stay up-to-date with current needs.
If you’ve recently lost someone who was listed on your homeowners insurance policy and need help navigating what comes next — whether it’s transferring ownership or making necessary changes — it’s best to consult with an experienced agent who can guide you through this challenging process.
WHAT TO DO WHEN TRANSFERRING HOMEOWNERS INSURANCE AFTER DEATH
Sometimes, ownership may need to be transferred after death. This is especially true if a child or other family member as an owner on a parent’s homeowners insurance policy and that parent passes away.
In such cases, they must take over ownership by notifying the insurer and having their name added as an owner on the policy or cancelling the existing policy and securing a new one. It’s important to note that transferring ownership can cause premiums to increase because of changes in coverage needs or credit score requirements. Most companies will not allow the transfer of a home policy, so call the insurance company or agent immediately to determine if this is even an option.
Notify The Insurance Company
As quickly after the death as possible, call the insurance company or agent and notify them of what has happened. Follow the call up with an email to the appropriate person to document the situation. Insurance companies often require a copy of the death certificate or legal paperwork to cancel and refund the remaining premium to the estate or beneficiaries.
Do not delay in making sure coverage remains on the house, as some insurance companies may exclude some or all coverage now that the named insured has passed away. Document interactions with your agent and insurance carrier, as communication during these difficult times can lead to confusion.
By understanding the current policy, notifying the insurer, and updating beneficiary/ownership information, you should be able to ensure that everything goes smoothly when transferring or securing a new home insurance policy from one party to another.
If you need help finding the best homeowners insurance coverage for the best price, start by speaking to a SimplyIOA agent at 833.872.4467 or get a homeowners insurance quote online now.
