Empty property insurance – miss it at your peril!
STOP PRESS – see this page for potentially Free Probate Property insurance. Empty property insurance is often a problem where someone has died. In some cases the existing insurer will refuse to maintain cover for an empty house. In most cases “standard” cover will be very different for empty properties. So you actually need to be sure that the actual cover has NOT changed. It may remain “standard” cover whilst the terms and conditions are entirely different, so make sure you understand the changes! In all cases, insurers will require that they be notified within a specified time that property is not occupied: if they are not notified that will be a breach of the insurance contract and they may well refuse to pay a claim.
If the executors don’t bother to sort out the insurance, and the worst happens, they could
be liable for the cost of claims from third parties (hit by falling roof tiles for example) or to the beneficiaries to make up for the loss to them from a burned down property, which is clearly worth a fraction of the normal market value.
As executors, you may not even know who the insurance policy is with, never mind whether the deceased had complied with the conditions of the insurance. So we have added a link to a company at the foot which we are told is very flexible in these circumstances, so you may want to have a look at their site. We are not insurance advisers!
Remember to consider both buildings and contents insurance, but it is clearly essential to remove valuable items from an empty house as soon as possible. But do be aware that only the executors have the authority to do this, and others may cause themselves all sorts of problems by “intermeddling” – even to the extent that they become liable to wind up the estate!
The problem with empty properties is that they are “non-standard risks” and many insurers just don’t want to get involved, as you may only need the insurance for a few months. Be aware that the insurer will ask about claims and other matters, so arm yourself with what information you can before contacting a new insurer. With insurance the golden rule is: tell them the whole truth, and nothing but the truth.
How much to insure an empty home for?
You must insure for the rebuilding cost, not the market value which is entirely irrelevant!
A common mistake is to cover the house’s market value (the amount it might sell for), meaning many people end up over-insured – or underinsured and paying more or less than they need to.
You should instead be covering (the “sum insured”) the rebuilding the property if it were burned down.
To find a rebuild value, commissioning a survey is most reliable but is expensive unless you’re getting one anyway (eg if you’re buying a new home). A less accurate, but quicker option is the Association of British Insurers’ calculator.
Here is a link to an insurer which specialises in empty property insurance