How Do You Protect a Vacant Inherited House While It's for Sale?

To protect a vacant inherited house in New Jersey, call the homeowners insurance company right away, keep the heat or a proper winterization in place, and have someone inside the house at least once a week until it sells. Many homeowners policies limit coverage once a house has been vacant for a set number of days, and a frozen pipe or a slow roof leak in an empty house can do real damage before anyone notices.

I'm Dennis Mark Interdonato with The Dennis Mark Group. I spent years building and remodeling New Jersey homes before I sold them, and an empty house is where small problems turn into expensive ones.

Does homeowners insurance cover a vacant house after the owner dies?

It depends on the policy, which is exactly why the first call is to the insurance company. The NJ Department of Banking and Insurance's standard homeowners policy summary lists, among the losses a policy doesn't cover, "losses if your house is vacant for the number of days specified by your policy." The number of days isn't set by the state. It's in the policy.

What to ask the insurer:

• Is the policy still in force now that the named insured has died, and who should be listed?
• How does the policy define vacant, and after how many days do the vacancy limits start?
• Is a vacancy endorsement or a separate vacant-home policy available?
• What do you need from the executor or administrator?

If the regular market won't cover it, the DOBI's consumer guide, Insuring Your Home, explains that New Jersey law allows eligible surplus lines insurers to cover some risks, and it names an unoccupied home as an example. It also cautions that surplus lines insurers aren't regulated to the same degree, may offer different coverage, and usually charge higher rates.

The estate has the authority to keep the house insured. New Jersey's fiduciary powers statute, N.J.S.A. 3B:14-23, includes the power to keep fire, liability, casualty and other insurance in force to protect estate property, and to make repairs to preserve it or make it saleable.

Should you keep the heat on or winterize the house?

One or the other, never neither. The same DOBI summary lists "freezing pipes (unless water was shut off or building was heated)" among the losses a policy doesn't cover. That parenthetical is the whole rule for an empty house in a New Jersey winter:

• Keep the heat on at a steady temperature if the house will be shown, and make sure the fuel or gas account stays paid.
• Or winterize it properly. Water off, lines drained, and the system done by someone who does it for a living. I got a guy for that.

Ask the insurer which they expect, and write down what was done and when.

What else protects the house while it's for sale?

• Know who has keys. Relatives, neighbors, aides and contractors may all have one.
• Keep the utilities in good standing. Showings need lights and, in most seasons, heat.
• Put lights on timers. A house that's dark every night reads as empty.
• Get papers and valuables out early. See the estate sale and clean-out order.

Who pays to carry the house?

Usually the estate, and the estate's attorney will say how. Property taxes, insurance, utilities, the mortgage and upkeep keep coming every month the house sits. That's the best argument for getting it ready while the paperwork moves, then listing it right. See how long probate takes and what happens to the mortgage.

What are the common mistakes with a vacant estate house?

• Letting the insurance lapse or ignoring the vacancy terms. Read the policy before the house has been empty long.
• Turning the heat off to save money. Without draining the system, that's a gamble with the whole house.
• No one inside for weeks. A leak found in week one is a repair. Found in week six, it's a project.
• Too many keys out there. Know exactly who can get in.

Frequently Asked Questions

Can a house stay on a deceased person's insurance policy?

Ask the insurer right away. Policies differ, so tell them the owner has died and the house is vacant, and get in writing what they need and how coverage works now.

How long can a house be vacant before insurance is affected?

It's set by the policy. The DOBI's standard summary says vacancy limits apply after "the number of days specified by your policy."

Is it better to keep the heat on or winterize?

Either can work. The DOBI summary shows freezing-pipe damage generally isn't covered unless the water was shut off or the building was heated. If the house will be shown, heat is usually more practical.

This is general information, not legal, tax or lending advice. Your insurance policy and the estate's attorney have the final word.

About the author

Dennis Mark Interdonato is a REALTOR® and Master CDRE® who leads The Dennis Mark Group at Keller Williams Realty Ocean Living in Point Pleasant, NJ, helping buyers and sellers throughout New Jersey make their next move, with Monmouth and Ocean County as home base. See how I handle estate and probate home sales.

Keep reading

• The free Estate & Probate Guide
• Find out what the house is worth
• How to sell an inherited house in New Jersey
• Have a question this didn't answer? Send it to Dennis Mark.