What Happens to Home Insurance when a Homeowner Dies?

Home insurance provides financial protection to homeowners in the event of major catastrophes. When a homeowner dies, his or her family members often face many legal and financial decisions. While home insurance doesn’t typically cover the costs associated with the death of a homeowner, there are ways to ensure any loved ones you leave behind have coverage available that helps them move forward. Exploring how home insurance works and the types of coverage you may need for end-of-life planning can help you feel confident you’ve addressed every possible scenario.

Know What Your Home Insurance Covers

Home insurance typically covers the costs for repairing property damage to the structure if a covered peril occurs, such as a fire or a major plumbing leak. Your home insurance policy may also cover personal injuries to people who might get hurt while visiting or working on your property. For instance, the insurance might cover expenses for a contractor who sustains a fall-related injury while working on your house. In most cases, the coverage stops at these points and won’t pay for any costs associated with the owner’s death.

Notify the Insurance Company of an Owner’s Death

In most cases, the home insurance policy will stay in effect after the owner’s death. But this is only for a short time. If someone doesn’t pay the premiums, the home insurance policy may lapse. For married couples, both people are usually already included on the policy. In this case, the surviving spouse might need to notify the insurance company of the loss to have the deceased partner’s name removed. Alternatively, a surviving heir might need to notify the insurance company while going through the probate process.

Make Sure You Have Adequate Life Insurance Coverage

If you’re worried about your loved ones having financial support to cover the costs of your burial and other expenses, you’ll need to purchase a life insurance policy. This kind of insurance will pay out death benefits to your beneficiaries they can use as they need. In most cases, life insurance covers the costs, such as funeral expenses, to alleviate the burden on the bereaved. Many life insurance policies pay the amount in one lump sum, which allows the beneficiaries to use the funds as they choose. Depending on their needs, this money might be used to pay for a mortgage or continue coverage on your home’s policy for a brief time.

Explore Mortgage Protection Insurance

If you still make payments to a lender, mortgage protection insurance is a special type that gives your loved ones even greater financial security. Although the payment usually goes to the lender, having mortgage protection insurance means the policy will pay out the remainder of your house payments after your death. This type of coverage can give you peace of mind that your family won’t lose their home when you’re the primary wage earner. Since insurance policy needs can vary significantly from one family to another, it’s always best to ask your agent to help with planning for financial protection that extends beyond your life. 

For reliable, affordable homeowners insurance, San Diego residents know they can trust Altra Insurance Services. We also provide renters, commercial, motorcycle, and car insurance. Request a free quote by calling one of our friendly agents today.