A transfer on death (TOD) deed occurs when the owner of real property adds a beneficiary to his or her property to take affect upon his or her death.  A TOD deed can be an inexpensive way to avoid the burdens often associated with probate.  In particular, it is a way for those with limited resources outside of their home to avoid probate without establishing a trust or other more costly probate avoidance device.

We at the Stinson Law Firm have been recommending that clients who create TOD deeds contact their insurer to confirm that the current owner’s coverage will continue for the beneficiary or seek to have the beneficiary added as insured as appropriate.  Although no cases have been reported in Indiana, this step became all the more important after a federal court ruling on a Minnesota case in 2021.  In that case, a house burned six days after the death of the owner.  The Court ruled that the insurance company did not have to pay a claim for damages because the beneficiary wasn’t a named insured under the decedent’s policy and the decedent no longer had an insurable interest in the home at the time of the fire.

A recent Indiana law, provides some reprieve to those who fail to ensure that coverage will continue after the death of the original owner of real property.  House Bill 1034 adds a buffer period of insurance coverage immediately following the death of the original owner of real property.  The default buffer period will be 60 days.  However, the period can be shorter if the original owner’s current policy will expire less than 60 days after the death of the original owner.  In such a situation, the buffer period will be 30 days or the policy’s expiration date, whichever is later.

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