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Chris Bell

The need for probate home insurance

Do you have – or are you likely to have – an interest in property which is currently subject to probate?

This brief article looks at the process of probate and why it is important to ensure that any property involved is securely protected by probate home insurance.

What is probate?

When someone dies, it is necessary to manage and distribute their estate – their all their possessions, money and property.

For the legal right to deal with that estate, the executors of the deceased person’s will must apply for probate and receive a formal “grant of probate”, explains the official government website. If the person died intestate – they did not leave a will – authority to deal with the estate is granted through “letters of administration”.

In Scotland that legal right to deal with the estate is granted by “confirmation” and in Northern Ireland the authority to deal with the estate is also through a “grant of probate” or “letters of administration” (in the absence of a will).

Fiduciary duty

In an article dated April 2019, the Net Lawman explains that the executors or anyone granted letters of administration have a fiduciary duty to the creditors and beneficiaries of the estate.

That is to say, they have a legal responsibility for dealing with the estate in the best financial interests of any creditor or beneficiary. The executors may be held personally responsible for any breach of that duty – and ordered to compensate for any financial loss arising from that breach.

Property insurance during probate

An executor’s fiduciary duty extends to ensuring that any property that is part of the estate remains adequately and appropriately protected by insurance. Any existing property insurance arranged by the now deceased owner will no longer be valid.

Property insurance during probate, therefore, is a precaution that needs to cover any property – and if you have any interest in ultimately inheriting that property, you might want to ensure that the executor’s duties have been fulfilled by arranging it.

Since insurers look to providing cover for those with an “insurable interest” in the property, the policy is typically issued in the name of the executors – although some insurers may also include the names of any eventual beneficiaries as additional policyholders.

Property insurance during probate typically incorporates the elements you might find at any other time, namely:

  • buildings insurance – to protect the structure and fabric of the property;
  • contents insurance – to protect the contents;
  • property owner’s liability insurance – to indemnify against claims from third parties who might be injured or have their property damaged and hold the property owners responsible; and
  • any additional insurance which may be appropriate for the protection of the property in question.

Unoccupied property insurance

It is not at all uncommon for a property in probate to stand empty and unoccupied until the assets of the estate have been distributed and probate comes to an end.

During that time, however, many insurers may refuse to cover a property that is being left empty for more than 30-45 consecutive days at a time. In that event – and in order for the executors to maintain their obligation to keep adequate insurance in place at all times – consideration may need to be given to specialist unoccupied property insurance.