Noyes, Hall & Allen Blog

Insuring Property You Inherit – Does Your Maine Insurance Policy Protect You?

Lately, several clients have asked us what to do with property that their recently-deceased parents owned. There are so many scenarios that it’s hard to generalize, but at we see these three regularly.

• Parents’ property is insured by our agency.
  When someone dies, their property becomes part of their estate. Most insurers will continue a Maine homeowners insurance or condo insurance policy in the name of an estate until the policy’s next expiration date. In the meantime, they want to know that someone is looking after the property, of course, and protecting it from loss. Sometimes, the estate isn’t settled before the policy expires. In that case, heirs usually purchase a new policy in the name of the estate, often with a surplus lines insurer.If the insured property is a vehicle, the Maine auto insurance company will want to know where it’s being kept, if anyone is driving it, and what the long-term plans are for the vehicle. They will make an underwriting decision accordingly.
• Parents’ property is not insured.
  It’s all too common for heirs or probate attorneys to begin the process, only to discover that one of the estate’s largest assets, the home, is uninsured. Properties without continuous insurance pose higher risks to insurers, and given the circumstances, the insurer may only be called upon to provide coverage for a short time. In that case, it’s very difficult to place new insurance in a standard insurance company. Often the only available market is a surplus lines company.
• The estate has been settled, and our client has inherited the property.
  If our client is the sole owner of the inherited property, that’s easy: they simply insure it as they would their other property or autos. If they plan to use it as income property, they can buy a Dwelling Fire or business property insurance policy. If they intend to use it as a seasonal or secondary home, it can usually be insured on a personal policy.Sometimes the property is inherited by several members of the same family, or a trust. Relatively few insurers will provide a personal policy in the name of a trust, but some do. If siblings inherit shared ownership, the policy is usually written with all siblings added as “additional insureds”. They all share the policy to protect their property interest and liability exposure.

Each estate situation is different. Be sure to consult with an attorney familiar with estate law, as well as your Maine insurance agent. Together, they will try to protect your interest and obligation in the property.

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