Inheriting an unoccupied home
When inheriting a property, making sure the home is protected with adequate insurance is usually one of the last things on your mind, which is complete understandable.
Inheriting an unoccupied home
Also, if you have never dealt with unoccupied property insurance before, you’ll probably find some distinct differences in the insurance policies and the range of cover, as well as some legal matters that can become confusing if you’re dealing with them for the first time.
Below is a brief guide to help answer some of the main points, but we understand that it may not answer all of your questions right away. We have experienced advisors on hand who are highly knowledgeable in regards to unoccupied properties and arranging insurance for them, and will be able to discuss your requirements and find the cover you require.
Short term policies and levels of cover
Unoccupied property insurance is one of the few times where property insurance is not limited to annual contracts, i.e. 12 months of cover. Some companies may be able to provide shorter terms of 3, 6 and 9 months as well.
It is very rare for a month-by-month policy to be available, so do not be surprised if most companies let you know that their shortest period is 3 months.
Short term policies are non-refundable in most cases, so they work best if you have a good idea about how long the property will be unoccupied for.
Also, unoccupied policies can offer different levels of cover, allowing you to reduce the cost of insurance by cutting out cover that you feel is unnecessary.
Every company has their own way of doing things, but most of the providers we deal with follow a similar format, which is as follows:
– Level 1 Cover – Fire, Lightning, Explosion, Earthquake & Aircraft only
– Level 2 Cover – Full Standard Cover With Limits – See below
- Escape of water limited to a maximum cover of £2,500
- Theft and malicious damage is limited to £2,500 maximum loss
– Level 3 Cover – Full Standard Cover – No Limits (Note there may be some restrictions in the first 30 days)
It’s worth having a good idea of how much cover you need, and how long you need it for, so that you don’t have to try and choose between 5 or more prices per every company you speak to. If you’re really not sure, one of our advisors may be able to make some suggestions after hearing your circumstances.
Power of Attorney/Executor of the Estate/Probate
A term that you may find you come across, and largely what we’re discussing here, is the matter of financial interest.
Property insurance is designed to put you back in the same situation you were in before the claim. In order to be able to claim on an insurance policy, the policyholder would need to be financially impacted if damage were to occur. It is therefore important that the policy is set up in the name of the correct person. Please note that this can change over the course of the policy.
If you hold power of attorney then you have the ability to make financial decisions on behalf of someone else. In matters of insurance, it would allow you to arrange, or make changes to an insurance policy on behalf of that person, but you do not have financial interest – You do not stand to lose or gain from a claim in respect of property owned by the person you are acting for. You would therefore arrange insurance in their name, with them as the policyholder, and provide proof of the power of attorney to confirm you can act on their behalf.
If a property is going through probate (the legal and financial process of dealing with the property, money, and possessions of a person who has died), then we would refer to an unoccupied property as forming part of their estate. Financial interest still remains with the estate during this process, and therefore insurance would be arranged in “The Executor(s) of (The Deceased)” until probate is granted. A policy can be arranged by an Executor named in the Will, or the next of kin, but no financial interest is created for these people until probate is granted.
After probate is granted, the policyholder would need to be changed to the persons who are granted ownership of the building. The current insurer may be able to change the policy into the new name, or may have to be cancelled and replaced.
We at GSI Insurance Services (Southern) Ltd. accept that at an already difficult time, the last thing you want is confusion. We are always willing to advise when it comes to getting the right cover in place. Give us a call on 0800 612 9376, or click “Get a Quote” to fill in our online quote form.
Need some more information?
Why not read one of our other unoccupied property insurance guides?
- Unoccupied Property Insurance
- Why do houses become unoccupied?
- Why are unoccupied properties higher risk?
- Renovations and unoccupied properties
- Taking long holidays and unoccupied insurance
- What does unoccupied property insurance cover?
- Case Study – Bringing unoccupied homes in Manchester back into use
- Unoccupied Insurance Guide
- Unoccupied Insurance FAQs