How a vacant dwelling insurance renewal inside the escrow window can cut a probate margin from 9k to 7,200
Here is a probate case worth studying because the loss came from a line nobody was watching. Take a probate SFR in Tucson where the homeowner's policy lapsed four months before the owner died, so the personal representative gets a new policy issued on a vacant dwelling. The vacant dwelling rider adds 60% to the premium, and the estate pays it from proceeds. Because the buyer negotiated a net-to-heirs number, that premium comes straight off the buyer's net at close. The part that gets missed is that the policy renewal date lands inside the escrow window. The estate renews again at closing, so the buyer eats a double premium, about $1,840 total, on a deal with $9k penciled in. Still profitable, but $7,200 against a $9k projection is a different conversation with a partner. The lesson is that vacant dwelling policies on probate properties belong in the preliminary HUD review so they never show up as a surprise at signing.
