Senate approves Sen. Bailey to protect transfer on death deed recipients

AUGUSTA — On Wednesday, the Maine Senate voted in favor of a bill from Sen. Donna Bailey, D-Saco, that would protect transfer on death deed recipients. An amended version of the bill, LD 1752, “An Act To Provide Insurance Coverage for a Beneficiary on a Transfer on Death Deed,” received bipartisan support.

“When someone is coping with the loss of a family member or a loved one, they can struggle to get all of their affairs, like insurance coverage, in order,” said Sen. Bailey. “This bill extends insurance coverage on the property for 90 days, which will give the designated beneficiary protection for the property and – most importantly – time to process their grief. I want to thank the Bureau of Insurance, Sen. Heather Sanborn and other stakeholders who worked on the language of this bill to help protect transfer on death deed recipients.”

As amended, LD 1752 would protect Maine transfer on death deed properties and recipients by requiring the property insurance company to extend the homeowner’s insurance policy to the designated beneficiary of a transfer on death deed for 90 days. In order for this to happen, the recipient must file a notice of death affidavit to the insurance company within 30 days of the homeowner passing away. The bill also would limit the coverage to the property being transferred, require the beneficiary to comply with the insurance policy conditions and allow the insurer to have proof of the recipient’s status as a designated beneficiary.

The idea for this bill came from a court case, Dawn Strope-Robinson v. State Farm Fire and Casualty, in which the deceased person’s transfer on death deed homeowner’s insurance policy terminated on their day of death. Before the deed recipient could take out their own homeowner’s insurance for the property they inherited, the house sustained fire damage.

LD 1752 now faces votes in the House in the coming weeks.

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