Apart from the practical arrangements family members have to make if an elderly or infirm relative dies or needs to move into residential care – there are important property insurance issues to consider.
Residential conveyancers, probate practitioners and Court of Protection lawyers routinely need to advise clients around matters such as buildings insurance and property maintenance.
If a client or their relative is moving imminently into a care or residential setting (or going for temporary respite care or a long stay in hospital for a month or so), their home may be left empty and exposed to risk.
Family members or the client’s solicitor should notify the existing buildings insurer and find out what their requirements are and what further action may need to be taken.
Probate properties need to have enhanced insurance protection in place as soon as possible because of the risks associated with the property lying unoccupied. It could be several months or longer before the property is eventually sold or transferred, potentially exposing it to additional risks.
When the owner-occupier moves into care or has died, several risks arise, including flooding, water and wind damage, burst pipes in cold weather and electrical faults. There is also the raised risk of criminals targeting the property; and if the property lays empty for a long time before a sale there is the potential risk of squatters taking over.
Standard buildings insurance is not sufficient for property that is unoccupied for lengthy periods, but there are dedicated insurance policies specifically to cover the risks particular associated with empty properties.
Existing insurers must be notified that the property is (or will be) empty. Most insurers will agreed to carry on insuring the property for a limited time (usually 30 or 60 days), after which cover will cease. Suitable unoccupied property insurance should then be arranged – but they are not all the same.
Practice Enterprise’s own unoccupied property insurance is a dedicated product designed with Watchman Insurance. It is highly cost-effective and geared specifically to cover the risk of unoccupied residential properties where the owner is in care or has died. Unlike many empty property policies, Watchman’s policy covers malicious damage and subsidence.
A significant feature of the Watchman unoccupied property insurance is that there is no requirement for an upfront premium payments (unlike with many competitor insurers). Only a small initial deposit is required at the commencement of the Watchman policy. Only when the property is sold or transferred (or up to 12 months later) is the policy premium is paid.
Cover is calculated at a fixed daily rate and can be purchased for up to a year at a time. The policy is straightforward to set up, with no hidden charges or cancellation fees to catch people out.
However, the property must be checked at least every 30 days and the personal representatives (or family of an owner who is in care) will need to take appropriate practical steps to secure and protect the property. This may include switching off utilities and hiding visible electrical goods, antiques and other valuables - minimising any potential risks.
A serious failure to check the property or to take other reasonable steps to reduce the risks to the property could lead to the insure refusing to payout in the event of a claim.
Remember that an executor who fails to take reasonable steps to protect estate assets could find themselves personally liable for any loss caused to the estate. Probate practitioners must make sure the PRs understand and appreciate their legal duties.
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