How you can Insure your Parents Home for them

The answer depends on whether you are on the deed to the home or not. This is referred in the insurance industry as an insurable interest. What that means is that you would need to have ownership interest in the item that suffers a loss in order to insure it.

If you are on the deed to the home you have the ability to insure the dwelling because you have an insurable interest in the home. This allows you to purchase the policy, sign the application and have your parents listed as the occupants on the dwelling. You would list yourself as an additional insured on the policy and could have it billed to either yourself or your parents. This is the most straight forward way to get coverage in place. But in many instances this is not the case.

When you are not on the deed to the home, your options are more limited. In this case you do not have an insurable interest in the home. This would be the same premise as if you bought a policy on your neighbor’s home. It is not yours and you could not reasonably expect to be compensated for their loss.

The ideal solution to this case is that you can get your parents to agree to get an insurance quote and sign for the policy. Many carriers will allow for a policy to be placed in care of another individual. Your parents would be the first named insured under the insurance, with yourself having no interest in the policy other than the person who pays the bills. An example of how this would look on the policy would be:

John and Jane Smith

C/o Robert Smith

123 Here St

Yourtown, US 00000

The effect of doing this is not unlike a bank which pays the insurance bill through an escrow account.

This method is commonly used for older homeowners, whereby a son or daughter might assume the normal month to month bill paying for their parents.

Having power of attorney for your parents would allow you to take out a policy on their behalf. With the POA you can legally sign for them. You will likely be required to provide written proof with your application to the insurance carrier so there are no questions should a claim arise.

Finally, I would never recommend taking a policy out on your parents’ behalf without their consent or POA. If an insurance company investigates a claim and discovers that an application was either incorrectly signed or a signature was forged, the policy becomes void and no coverage exists.