I’m the executor of my parents’ estate, and they will soon be moving from their longtime home to a retirement facility. Do they still need homeowner’s insurance?Dear Reader:
Tank you for your question!
This is an interesting question as our insurance needs and assets change throughout our life. As a result our insurance needs change as well. However, the underlying constant when contemplating whether insurance is do you have something of value that you wish to protect?
In relation to your parents, the question does not tell me whether they will continue to own their longtime home and let it sit empty or rent it out, or alternatively sell it. As the executor you do have a fiduciary duty to protect and maintain their assets, while you determine the long term status of the property. Included in that duty would be a requirement to keep the home insured and the asset protected from catastrophic loss.
On the assumption that they will continue to own the home they do need to maintain their homeowner’s insurance policy. The home still clearly has a substantial value and that value is still at risk due to weather, theft, vandalism, etc.
The one thing that you will have to be careful of though is leaving the home unoccupied. Many insurer’s will contemplate raising insurance premium’s or even cancelling homeowners coverage, if a property is unoccupied for 6 months or more. So from an insurance perspective, it is better to rent the home out or have a family member occupy the home, while you are determining its ultimate utilization.
Regardless of what you decide to do as it relates to occupancy of the home, it is still important that you maintain insurance protection on the home. The occupancy status might affect the type of coverage you need, but the ownership of the home makes it a wise and prudent decision to keep it insured in all circumstance for a minimum of its replacement cost.
Have a great and hopefully soon to arrive spring everyone!