Dealing with Insurance on a Vacant Probate Property

Short answer, keeping insurance active on a vacant inherited property is essential, and failing to do so can create liability for the estate and the personal representative.

Why Insurance Matters

When a property sits vacant during probate, the risk of damage increases significantly. Break-ins, vandalism, water damage, fire, and even weather-related damage are all more likely when no one is living in the home. If something happens and the property isn't insured, the estate absorbs the full cost, reducing the value available to heirs.

What Happens When You Don't Notify the Insurance Company

Vacancy provisions vary by insurer and policy, and they are often triggered only after a stated number of vacant days, commonly in the 30 to 60 day range. The personal representative should confirm the specific policy's terms with the carrier. If a policy includes a vacancy provision and the property has been vacant beyond its stated period, the insurer may deny claims for damage that occurs while vacant. That could leave the estate responsible for repairs out of pocket, or worse, selling a damaged property for less than its value.

What the Personal Representative Should Do

Notify the insurance company immediately that the homeowner has passed away. Ask about converting to a vacant property policy or adding coverage that protects the home during the probate process. Keep the policy active until the property is sold or transferred.

The Cost Consideration

Vacant property insurance typically costs more than standard homeowner's insurance, but the alternative is far more expensive. A single break-in or water damage event can cost tens of thousands of dollars. The estate is carrying this cost, and the personal representative can be held liable if the property wasn't properly insured.

This is another reason to move efficiently through the probate process. Every month the property sits vacant is another month of increased risk and carrying costs. Get multiple offers on the property within minutes so you can sell quickly and minimize these expenses.