Insurance - Home has multiple owners

[michstip]

North Carolina

Our father passed away and ownership of his home transferred to his 4 heirs (me and my 3 brothers). None of us live in the home. How do you get homeowners insurance for a home with 4 owners?

I have been asked to "take care of things," but if I purchase the policy and I only have a 25% interest in the home, how will that work if we have to make a claim?

Thanks VERY much for any guidance.

 

[OHRoadwarrior]

First you might find it difficult to insure a vacant home. They are subject to vandalism

 

[sandyclaus]

North Carolina

Our father passed away and ownership of his home transferred to his 4 heirs (me and my 3 brothers). None of us live in the home. How do you get homeowners insurance for a home with 4 owners?

I have been asked to "take care of things," but if I purchase the policy and I only have a 25% interest in the home, how will that work if we have to make a claim?

Thanks VERY much for any guidance.

So, who, if anyone, actually resides in the home?

If it's vacant, there's insurance that covers that.

If one (or more) of the owners will live in the home, then each one of the co-owners will have to be a named insured on the homeowner's policy (I believe).

If the house is being rented out or occupied by other than the owners, then you'll need a specific fire policy that covers a rental property.

 

[michstip]

So, who, if anyone, actually resides in the home?

If it's vacant, there's insurance that covers that.

If one (or more) of the owners will live in the home, then each one of the co-owners will have to be a named insured on the homeowner's policy (I believe).

If the house is being rented out or occupied by other than the owners, then you'll need a specific fire policy that covers a rental property.

We are letting our cousin live there. She pays us rent, mows the grass, keeps it up. It's a good arrangement for us because she needed somewhere to live and we are too far away to maintain it regularly.

 

[justalayman]

Our father passed away and ownership of his home transferred to his 4 heirs (me and my 3 brothers). None of us live in the home. How do you get homeowners insurance for a home with 4 owners?

You call an insurance company and tell them you want to purchase insurance on a home that you and your 3 siblings own. Be sure to tell them you rent it out.



They will tell you what you need after that point.

 

[michstip]

You call an insurance company and tell them you want to purchase insurance on a home that you and your 3 siblings own. Be sure to tell them you rent it out.



They will tell you what you need after that point.

Thanks for your reply. I did, and they sold me a policy in the name of "Estate of (Dad's Name)". Well, there IS no estate! That was closed years ago. So I'm worried that we're paying for a policy that wouldn't pay out even if we had a claim, because the "insured entity" (the Estate) does not exist anymore.

But both the agent and the company tell me it's set up right for our situation.

 

[justalayman]

Thanks for your reply. I did, and they sold me a policy in the name of "Estate of (Dad's Name)". Well, there IS no estate! That was closed years ago. So I'm worried that we're paying for a policy that wouldn't pay out even if we had a claim, because the "insured entity" (the Estate) does not exist anymore.

But both the agent and the company tell me it's set up right for our situation.

if the estate no longer owns the home, no, it is not set up correctly for your situation.


Just to be sure: there has already been a deed recorded transferring title to you and siblings, correct?


the policy would likely pay out but it would make payment to the estate. Especially since the estate has been closed out, that would be a real problem for you and siblings because at the moment, nobody would have the right to cash the check.

 

[michstip]

if the estate no longer owns the home, no, it is not set up correctly for your situation.


Just to be sure: there has already been a deed recorded transferring title to you and siblings, correct?

No. According to the real estate lawyer and I even double-checked with the Register of Deeds, in North Carolina you do not record a new deed. They told me that real estate in NC "automatically transfers" to the heirs and that no new deed needs to be recorded. The lawyer said:

"You don't need to draw up a deed. Since title to his home was just in his name, the title passes to his 4 sons. You don't need to have a new deed recorded. The estate file, which will contain a listing of the properties in inventory, is sufficient evidence of record title, so the public records (meaning the deed to him at the county register of deeds and the estate file at the clerk's office) are sufficient and nothing needs to be done."

 

[justalayman]

No. According to the real estate lawyer and I even double-checked with the Register of Deeds, in North Carolina you do not record a new deed. They told me that real estate in NC "automatically transfers" to the heirs and that no new deed needs to be recorded. The lawyer said:

"You don't need to draw up a deed. Since title to his home was just in his name, the title passes to his 4 sons. You don't need to have a new deed recorded. The estate file, which will contain a listing of the properties in inventory, is sufficient evidence of record title, so the public records (meaning the deed to him at the county register of deeds and the estate file at the clerk's office) are sufficient and nothing needs to be done."

while the law does support that, it causes considerable confusion. I would hate to have to do a title search in NC. I wonder what happens if he lived in another county, or state. How would anybody know where to look for his probate file?





having the estate (incorrectly) listed as the owner will only cause you problems should there be a need to make a claim on the policy. Since probate is closed, nobody has an immediate right to act on behalf of the estate.

I cannot see how the agent can claim it is correct since the estate never technically owned the property and definitely does not now/ The only thing I can think of is it is based in confusion. When you first purchased the policy was it while probate was open?

 

[michstip]

while the law does support that, it causes considerable confusion. I would hate to have to do a title search in NC. I wonder what happens if he lived in another county, or state. How would anybody know where to look for his probate file?





having the estate (incorrectly) listed as the owner will only cause you problems should there be a need to make a claim on the policy. Since probate is closed, nobody has an immediate right to act on behalf of the estate.

I cannot see how the agent can claim it is correct since the estate never technically owned the property and definitely does not now/ The only thing I can think of is it is based in confusion. When you first purchased the policy was it while probate was open?

Yes, when I first purchased it, the estate was still open. (Even though really the estate never owned the property because in NC, real estate passes automatically to heirs, outside of the estate).

So it sounds like I need a "fire policy that covers a rental property", which is exactly what I currently have, except that it's in the Estate's name. Do you see any problems if I just put the policy in my name only? Or do all 4 of us need to be named on the policy? (It would be difficult to get signatures, since we are literally all over the world [military], but I also don't want us to receive only 25% of the home's value if it burns down!)

 

[ecmst12]

All of the owners need to be listed as insured on the policy. The problem you have now is not receiving less than the value of the home, the problem is any claims will be paid out to the estate of your dad, NOT the actual owners.

 

[tammy8]

I realize this is an old thread but wanted to share an incident that happened to one of my insured's daughter and son-in-law. My insured's son-in-law had been living in his late Grandfather's home which was given to him in Grandfather's will. However the deed was never legally recorded with the county as being transferred to Grandson, I believe something about an unresolved dispute with a distant cousin.

4 yrs later there was a fire. Insurance company (not the one I work for) denied the claim because the deed was still in Grandfather's name, and the Grandson had no insurable interest in the home. The insurance agent had sold the Grandson a homeowner's policy (either knowing it was not deeded legally or assuming the Grandson had taken care of this and only going off the info with the will) and last I heard there was an E&O claim against the agent.

You need to find out why the insurance company has the home insured like it is and find out exactly how the deed is titled with your county. I would also consult another attorney.