Death and Taxes: The Uncertainty of What Happens With An Insurance Policy When A Loved One Dies

As Benjamin Franklin said, “…in this world nothing can be said to be certain, except death and taxes.” While we all know that April 15th is the day our taxes are due, death has a way of sneaking up and surprising us. When a loved one dies there are many issues that their family and friends are left to deal with, but as family and friends settle their affairs, one important question should be asked: What happens to the insurance policy on the house when the owner dies?

In cases where there were more than one person (like a married couple) listed on the homeowners policy and one spouse were to die, usually the homeowners policy would remain in effect until the expiration/renewal date listed, at which point the insurance company may choose to re-evaluate the risk before making a decision to issue a new policy to the remaining spouse or non-renew the policy if the underwriting criteria is no longer being met.

In the event of a person who lives alone dying, their homeowner’s insurance policy would normally provide the legal representative of the deceased limited protection for the property and premises. If there will not be anyone living in the home after the death of the person whose name was on the policy, it would not necessarily qualify for a homeowners insurance policy, and other insurance coverage for the property should be obtained. An insurance company can cancel a policy if the risks have changed substantially as long as they provide notice thirty days before the cancellation takes effect, so there may not be much time for the deceased’s legal representative to make alternate arrangements.

A Trusted Choice® independent insurance agent can explain the different coverage options available to you during this difficult transition. Settling the affairs of a loved one isn’t easy in the best of circumstances. Having an agent who can answer questions and provide you with options for protecting the property of a loved one during a difficult time can relieve some of the uncertainty surrounding this all too certain situation.