Mom in assisted living - sister now in her house - Insurance inquiry

[jpjr]

My mother went into assisted living a year ago and my sister and her husband moved into her home - with her blessings. My sister is paying $1,000 directly to mom's account, but without a rental agreement. Mom still is the legal owner. Upon her death we will split all mom's assets equally, which will include the house and enough cash for my sister to pay off her siblings and stay in the home.
The home owner's insurance company served notice that since my mom is no longer in the home, they will be non-renewing the policy in a few months. I am presuming a change to a formal rental agreement, which will then force my mom to purchase a landlord/dwelling policy. Is there a way to transfer ownership to my sister and her siblings now without messing with the will as it is currently written? Any other ideas to keep this as simple as possible?

 

[Bamaman]

Sounds as if the insurance company thinks no one is living there. Or, they don't want her business any longer.

They're not the only insurance company around. Get a power of attorney and go find another.

I have a second vacation house no one lives in too. I do spend many days there, however. And I have a homeowner's policy--with the insurance company knowing the situation.

 

[Another Reader]

Ask about a rental policy to replace the homeowner's policy.

 

[PaunchyPirate]

When I purchased my parents house from them, they continued to live in the house rent free. I initially purchased a normal home owner’s policy from my normal agent. The agent knew all the details correctly. 2 years later, someone at a higher level determined that I did not live in the house, and was using it as a rental (albeit with no rent) so the policy would be terminated.

I called the agent and they admitted they should not have sold me the previous policy. They quickly sold me a rental home policy which cost about $100 more per year. Mom had maintained her own renters insurance through the entire duration.

OP, unfortunately I don’t know how to advise you on your question about transferring ownership. But I though I’d share my insurance experience. BTW, this was with State Farm.

Edited to add: Neither I nor my Mom had to supply a copy of a lease to anyone. There was no lease.

 

[RunningBum]

I owned a townhouse that my son lived in for 3-4 years, with no lease or rental agreement. I had no problem getting a landlord policy thru MetLife, who I had my own car, home, and umbrella insurance with at the time. I don't recall if they asked for a copy of any kind of rental agreement, but I know I didn't misrepresent it or claim I'd ever live there. He had his own renter's insurance, and I don't think MetLife asked for proof of that either.

Agree with some of the other posts, shop around to find someone who will sell you a landlord policy.

 

[Montecfo]

If the property is appreciated, I would not transfer it pre-death since you then miss the basis step-up to FMV.

It should be pretty easy to get a landlord insurance policy, since a homeowner's policy is for the owner-occupant.

 

[jpjr]

Thanks all for your responses. I knew about the need for the landlord's policy and have encouraged my sister to meet with the agent to get that in motion. We will keep the lack of rental agreement to ourselves. My mom, btw 108 this year, is more than capable to sign any required forms etc. The last thing I need is for hurricane season to blow through and have a claim denied. The pre-death step-up basis is a wrinkle I did not think about so that does change any thoughts of wrangling a transfer of the property now. It also behooves my sister to get off her ___ to get a renter's policy.

 

[audreyh1]

108!!! Holy cow! And able to sign forms!!

Yeah, no need to transfer property just to get insurance straightened out.

 

[HarveyS]

Your mother (the owner of the property) needs insurance on the property. As others have said, a landlord policy to cover the dwelling.
Your sister (the tenant) needs a renters policy. To cover her belongings.

Encouraging your sister is great. But it does not seem to be working. You or one of your siblings need to get off your ____ and/or get your Mom to cover the dwelling properly. Your sister is on her own for the contents. All the siblings stand to lose if this is not done. It's a 15 minute phone call. Like the Nike ads said, "Just Do It". You are at risk of having a claim denied right now since you are not adhering to the policy terms (ie, living in the dwelling). Not just a hurricane, but fire, water damage, someone is injured on the property, etc. etc.

 

[Sunset]

The other issue with transferring a property is, the transfer would prevent/interfere with OP's Mother going on Medicaid.
Should she need to go into a nursing home, the costs are easily $100K -> $200K per yr from my recent experience.
This can quickly suck up savings.

 

[ocean view]

108!!! Holy cow! And able to sign forms!!

And didn’t move into assisted living just last year. Think about that for a moment.

What’s her secret?

 

[flintnational]

Your mother (the owner of the property) needs insurance on the property. As others have said, a landlord policy to cover the dwelling.
Your sister (the tenant) needs a renters policy. To cover her belongings.

Encouraging your sister is great. But it does not seem to be working. You or one of your siblings need to get off your ____ and/or get your Mom to cover the dwelling properly. Your sister is on her own for the contents. All the siblings stand to lose if this is not done. It's a 15 minute phone call. Like the Nike ads said, "Just Do It". You are at risk of having a claim denied right now since you are not adhering to the policy terms (ie, living in the dwelling). Not just a hurricane, but fire, water damage, someone is injured on the property, etc. etc.

+1 My career was Risk Mgt./Ins. and I have owned rentals. This is the correct way to handle this.

 

[jpjr]

She has good genes. I, on the other hand, probably did a number on my genes during my college days.
She was driving until 105 when we forceably took away the keys, lived on her own until she broke her femur in a fall in 2019. Still does her Sunday crossword puzzle in ink. She needs help walking and personal care, but otherwise is doing fine.

 

[jpjr]

Rental policy has been bound. HO3 is being converted to HO6 -tenant occupied. Insurance coverage is now appropriate for the exposures.