Home insurance after a death in the family

When a homeowner or a spouse dies, the policy does not end. The standard ISO homeowners form (HO 00 03) has a Death condition that keeps the household and the deceased's legal representative insured, and the policy runs to the end of its term unless the insurer cancels or you stop paying. What does change is who the insurer will talk to, who should be named on the policy and whether the house is still lived in. Call the insurer in the first week, say what happened, and ask for the next steps in writing.

This guide is for the family member who still lives in the house or who is managing it. If the house is inherited by someone who will not move in, read insuring an inherited house: what to do in the first 30 days alongside this one. The wording below comes from the May 2011 edition of the ISO HO-3, hosted by the Maine Bureau of Insurance. Newer editions and your insurer's own form can differ, so read your policy.

What the Death condition says

The Death condition applies if a person named in the declarations, or that person's spouse who lives in the same household, dies. In the 2011 ISO text, it does three things.

1. The insurer insures the legal representative of the deceased, but only for the premises and property of the deceased that were covered at the time of death.
2. Household members who were insureds at the time of death stay insured, but only while they remain residents of the residence premises.
3. For the deceased's property, whoever has proper temporary custody of it is an insured until a legal representative is appointed and qualifies.

In plain terms, the policy follows the household and the estate for a time. It does not turn an heir living elsewhere into a policyholder, and it does not rewrite who owns the house. That is the same bridge described in insuring an inherited house: what to do in the first 30 days, and the rest of this guide deals with the surviving-household version of it.

If a spouse or co-owner is still living in the house

This is the most common case, and the policy usually keeps working. The surviving spouse who was an insured stays covered, and the dwelling, other structures, belongings and liability protections continue. Three things still need attention.

• Named insured. If the deceased was the only named insured and the survivor was covered as a resident spouse, ask the insurer to change the declarations page so the survivor is named in their own right. A claim is simpler when the paperwork already matches who owns and lives in the house.
• Title. Ask whether the house passed to the survivor automatically (joint ownership with survivorship, a trust, a transfer-on-death deed) or whether it must go through probate. The insurer may ask for the deed or letters from the court before it changes the policy. The answer also affects who has an insurable interest in the property, which a property policy requires to pay a claim.
• Mortgage. The loan stays in place, and the mortgagee stays on the policy. See the section on the mortgage below.

If there is a trust, the trustee may need to be added. Insuring a home held in a trust or LLC explains how that changes the named insureds.

If the deceased lived alone

The house is now probably unoccupied, and the vacancy clock matters. In the 2011 ISO HO-3, a dwelling vacant for more than 60 consecutive days loses vandalism and malicious mischief coverage and glass breakage coverage, and freezing damage to plumbing is excluded unless you used reasonable care to maintain heat or drain the system. Insurers' own forms often add shorter clocks and broader lists. Tell the insurer who will visit the house, how often, and whether belongings remain; "vacant" and "unoccupied" are not the same word in policies, as vacancy and unoccupancy exclusions explains.

Another problem is the HO-3 definition of "residence premises," which refers to the dwelling where you reside. An insurer can reasonably ask whether a homeowners form still fits a house with no resident, and it may offer a vacancy endorsement, a vacant dwelling policy or a landlord form instead. See vacant home insurance: when you need it and what it covers. Do not assume the old policy lasts through a long probate.

The premium: how it gets paid and what happens if it does not

Many homeowners pay by automatic withdrawal from the deceased's account. A bank often freezes or closes that account after the death notification, and the next installment bounces. A cancellation for nonpayment follows its own notice rules, which vary by state, and it can arrive in the mail of a house that nobody opens.

Check these three items in the first two weeks:

1. When is the next premium due, and from which account?
2. If the premium is paid through the lender's escrow account, confirm that the servicer still has the policy information and will pay on time.
3. Update the mailing address and give the insurer a second contact (a relative or the executor) for notices.

If you pay with your own money before an executor is appointed, keep the receipts; the estate can usually reimburse legitimate expenses to protect the property, but ask the estate's attorney.

The mortgage after a death

A lender cannot generally call the loan due simply because the borrower died and the home passed to a family member. Federal law bars lenders from enforcing a due-on-sale clause for certain transfers, including a transfer to a relative resulting from the death of a borrower and a transfer where the spouse or children become an owner of the property (12 U.S.C. 1701j-3(d)). The CFPB's mortgage servicing rule defines heirs who receive the home in these ways as "successors in interest," and once the servicer confirms a successor's identity and ownership interest, that "confirmed successor in interest" gets the protections the servicing rules give borrowers (12 CFR 1024.31 and 1024.30(d)). This is a loan matter, not an insurance one, but it explains why the lender will ask for the death certificate, the will or court papers, and proof of insurance.

For insurance, the lender's requirements stay unchanged: the property must remain insured, and the lender remains the mortgagee on the declarations page. If the insurer cancels, the servicer may buy force-placed insurance and bill the loan. Send the servicer a current declarations page whenever the policy changes. If the deceased had a reverse mortgage, the rules differ; see reverse mortgages and homeowners insurance: what you must keep in force.

The deceased's belongings and valuables

Coverage C continues to apply to the personal property of the deceased in the house for the estate's legal representative, subject to the same special limits and perils as before. Do these before anyone starts dividing, donating or selling:

• Photograph each room as it is, then keep a list of what leaves and when. The home inventory builder helps.
• Locate scheduled items such as jewelry, firearms or collections. A scheduled personal property endorsement or a floater may have its own terms for who is covered after the owner dies; ask the insurer.
• Tell the insurer if valuable items go to an heir's home. Property moved to a different residence leaves the old policy's "premises," and the heir's own policy needs to cover it.

Items that were stolen or damaged while the house sat empty are a special risk. The vacancy language and the theft limits are covered in special limits on jewelry, firearms, cash and collectibles.

First-month checklist

When an insurer may decline to keep going

The insurer's right to cancel or not renew has not changed. Typical notice periods and permitted reasons are set by state law, so check your state's insurance department. If the new owner is a person the insurer would not have accepted on its own (for instance, no resident, an older roof, a wildfire score), expect a nonrenewal and plan a backup. your home insurance was nonrenewed: what to do now covers the process, and finding coverage for a hard-to-insure home covers the options if no one will write the house.

Key takeaways

• The ISO HO-3 Death condition keeps the household and the deceased's legal representative insured, but only for a limited time and only for what was covered at death.
• A surviving spouse or resident co-owner usually stays covered, but ask the insurer to fix the named insured and send it the deed, trust or court papers it requests.
• If the house will be empty, the vacancy clauses and "where you reside" language can end coverage for key perils; ask about a vacancy endorsement or a different policy.
• Watch the premium payment account and the mortgagee: a frozen bank account can lead to a nonpayment cancellation.
• Policy wording and state rules vary; confirm everything with your insurer and the estate's attorney in writing.