Chip Merlin | Property Insurance Coverage Law Blog | September 15, 2019
Death of a named insured and probate proceedings have insurance policy consequences. Insurance agents, probate attorneys, and personal representatives have to prepare to purchase or change policies so the correct parties are insured following death and probate.
In a recent case, a court explained how the timing following death can leave property uninsured:
Looking at this timeline of events, the loss to all of the property, both personal and real, occurred after Dolores Walker’s death, after her sister probated her estate, after the assets were distributed, and after the estate closed. While the timing of these events is certainly unfortunate from Jacqueline’s perspective, the policy’s coverage of Delores’s interest in her real and personal property was extinguished by the time that the fire occurred.1
The Ohio court noted the exact same occurrence happened in Georgia with no coverage:
The Georgia Court of Appeals confronted a very similar scenario as it interpreted identical policy language. … Like this case, the insured owned a house and then passed away. The policy provided that if the insured died, ‘we insure the legal representative of the deceased but only with respect to the premises and property of the deceased covered under the policy at the time of death.’…After the insured died in August 1989, his sons agreed to the disposition of the property in the estate and the house was transferred by deed to one of the sons in October (a transaction recorded a month thereafter). A fire swept through and destroyed the house in December 1989, prompting the deceased insured’s sons to file an insurance claim.
Although the sons tried to broaden the interpretation of ‘legal representative of the estate,’ the Georgia Court of Appeals persuasively determined that at the time of the fire, ‘there was no legal representative of the testator.’…Because the deed had been executed and transferred at the time of the loss, and because the sons did not obtain written consent of the insurer to assign the policy, no ‘insured’ existed per the terms of the policy.2
Insurance agents with knowledge of death have to provide advice that policies need to change as the ownership of the property is changed. Probate and estate attorneys need to pay special attention to these situations and provide the same advice to avoid occurrence of these uninsured situations.
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1 Walker on behalf of Estate of Walker v. Albers Insurance Agency, No. C-180207, 2019 Ohio 1316, 2019 WL 1552615 (Ohio App. 1 Dist., 2019).
2 Higdon v. Georgia Farm Bur. Mut. Ins. Co., 204 Ga.App. 192, 419 S.E.2d 80 (Ga. App. 1992)