Can an agent under a POA be liable if the homeowner's insurance isn't maintained?
The agent under a power of attorney who is responsible for real estate matters among other things is bound to certain fiduciary duties.
A fiduciary duty is one of complete trust and utmost good faith. While fiduciaries take legal title to assets, the assets do not belong to them. Rather, legal title allows fiduciaries to administer and manage the assets for a temporary period and for a specific purpose. In taking control of another's assets, fiduciaries also agree to manage those assets in accordance with the wishes of the individual who established the fiduciary relationship. The powers and duties of fiduciaries are often established in a document that formally establishes the fiduciary relationship. The conduct of fiduciaries is governed by common law as well as by specific federal and state laws. The Uniform Fiduciary Act and the Uniform Trustees' Powers Act serve as models for state legislation.
Fiduciaries owe two main duties to their clients: a duty of loyalty and a duty of care. The duty of loyalty requires that fiduciaries act solely in the interest of their clients, rather than in their own interest. Thus fiduciaries must not derive any direct or indirect profit from their position, and must avoid potential conflicts of interest.
It would be a matter of interpretation for a court if asked whether failure to maintain insurance on the principal's home is a breach of the agent's duty. Someone touring the home could slip and fall, thereby exposing the homeowner to liability damages.
If keeping the insurance would prevent the homeowner from paying such damages, then it could be determined that insurance was necessary to protect the assets of the principal, even if that person is collecting Medicaid.