2016-10-12 “Home Insurance After Death”

What happens to house insurance when someone passes away?

Many insurance policies in Canada define “vacancy” as the circumstance where occupants of a home have left the home permanently with no plans to return (such as taking up a new residence) or due to a death the home is not occupied. Vacancy may not apply to a home that is unoccupied while the owners are away on vacation or on a business trip.  This is what may happen to house insurance once the house is deemed vacant:

For periods up to 30 days: As soon as a house is vacant, certain coverages (if currently part of the policy) are removed.  These typically include water, vandalism or malicious acts, glass breakage, fuel escape and sewer back-up.

After 30 days: Once a home has been vacant for more than 30 consecutive days, there is no coverage for any damage unless a vacancy permit is granted.  A vacancy permit acknowledges that the insurer is aware that the home is vacant and is willing to extend the standard 30 day vacancy limitation.  With a vacancy permit, there may be additional reductions in coverage such as theft and guaranteed replacement cost, but basic coverages for such things as fire, lightning, explosion and wind continue.

Since vacant houses make for easy targets, here are some precautions you can take to reduce the risks of damage:

  • Consider a house sitter or renter who can occupy the home until it can be sold
  • Install a monitored alarm system
  • Ensure there are dead bolt locks on all doors
  • Secure windows and close draperies or blinds
  • Have the home visited daily to check for any damage and prevent loss
  • Use timers on lights and change the timers periodically
  • Redirect mail and have flyers collected
  • Ensure that lawns are mowed in summer and snow is removed in winter

It is always a good idea to check with your insurer and inform them of any changes that may affect your policy. That way, you can continue to have the peace of mind that your property is suitably insured in any situation.