Insurance and a Personal Representative’s Duty to Protect and Preserve

One of the main facets of your job as an executor or administrator is to protect and preserve the assets of an estate.  When the estate includes property of value, including a house, car, jewelry, art, etc., you should find out how that property is insured and maintain that insurance while that property remains an asset of the estate. Contact the insurance agent/company that provided coverage to the decedent or secure a new policy on your own. If you find an existing policy, you’ll want to contact the agent and notify them that the owner of the policy has died and ask for the “insured” to be changed to the name of the Estate. Note: If there is no existing policy, you’ll want to obtain insurance in the name of the estate and insure any valuable property of the estate while it is under your control. If you own an interest in property with the estate, you should discuss with the agent if the policy should be in your name with the estate named as an additional insured.

Make sure you have a copy of the insurance policy and review it for accuracy. If there is anything you don’t understand or that doesn’t look right, contact the agent. If you fail to update the policy and a loss occurs, the insurance company could deny coverage. If you have questions regarding the policy, make sure to put all communications with the agent in writing so you have documents for your records.

If the estate includes a house that will be sitting empty before it is sold/transferred to someone else, ask the insurance agent if there is a “vacancy clause” in the policy.  This provision excludes coverage for certain types of losses that occur most often when a house has been vacant for a length of time. Vandalism, fire, water leaks. and theft are usually excluded. Most policies have either a 30 or 60-day vacancy period during which the home can be vacant before damage from these types of losses is excluded.

To ensure that the property remains fully covered while it is unoccupied ask the insurance agent for a “rider” or “endorsement” to extend the vacancy period or make it inapplicable under the circumstances. This preserves and protects the estate’s assets. It may result in a premium charge but is a necessary expense.

Finally, if you move valuable property of the estate into your home you will want to contact your personal insurance agent and ask them if you need to temporarily increase coverage on your homeowner’s policy to make sure that property is covered.

If you have questions about the policy coverage, or encounter issues securing insurance or making a claim while serving as a personal representative, we recommend that you seek the advice of a lawyer who specializes in insurance coverage to ensure you remain free from liability.

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