Inheriting a property might be more common than you think. The Home Owners Alliance (HOA), for example, estimates that some 36% of the population – or around 18.6 million people – might expect to inherit a home sometime in the future.
Not only is inheritance likely to come at an emotionally challenging time, but there are also many practical considerations to consider – and these start even before your inheritance is finally and formally transferred into your ownership.
The inheritance to which you are entitled is determined by a legal process known as probate. During that time, ownership of the property remains in the hands of the deceased’s estate, which is administered by executors of the will.
As we explain here, house insurance during probate remains critical – and, if you have an interest in ultimately inheriting the property, you need to ensure that the executors arrange suitable executors home insurance for the building and its contents.
This is especially important since many properties are left unoccupied during probate, and an empty building is at its most vulnerable – from the need for emergency repairs to intruders, vandals and the like.
It is important to note that any existing insurance cover that the deceased owner had arranged on the property will typically become invalid.
After transfer of the title deeds
As soon as you become the owner of your inherited property, insurance is entirely your responsibility – whether you intend to move into it as your own home or let it to tenants.
That means making sure that the insurance is in your name – that arranged by the executors of the will does not transfer to you with the property itself.
When you do arrange your insurance, remember that it is crucial to inform the insurer of your intended use of the home – for you to live in, sell on or to let to tenants for example. Standard home insurance is appropriate if you are to be the owner-occupier, but you need specialist landlord insurance if you intend to let it to tenants.
As with any property insurance, cover for a home you have inherited typically comprises two main elements – building insurance and contents insurance:
- building insurance is essential to protecting the structure and fabric of the property – usually against such major risks as fire, flooding, storm damage, impacts (from vehicles and falling objects), escape of water, vandalism and theft;
- anticipating a worst-case scenario in which the building is completely destroyed, the total building sum insured is typically equivalent to the estimated cost of demolishing the remains, clearing the site and reconstructing the premises;
- whether you are going to be living there yourself or will let the home to tenants, you are likely to own contents which also need the protection of suitable insurance – to the replacement value of those items;
- to avoid the risk of being underinsured, you might want to conduct a room by room inventory of all of the contents when deciding the sum insured – so that there is sufficient settlement in the event of a claim to replace lost, stolen or damaged items.
Whether you are arranging standard home insurance or landlord’s insurance, it is typically cheaper to buy a combined building and contents policy rather than opting for separate elements of cover.
At UKinsuranceNET, we understand that being an executor of a will can be challenging at an already difficult time. We are here to help navigate you through some of the insurance requirements during probate and thereafter.