Homeowner Insurance and Trusts: What You Need to Know.
Setting up a trust for your home and updating your homeowner insurance should go hand in hand.
When you place your home in a trust, family partnership, or LLC one of the first things you need to do is add the new entity to your homeowner insurance policy and your umbrella policy. It’s as simple as notifying your insurance agent and letting them know about the change.
Why does your insurance company need to know?
Your homeowner insurance policy provides coverage for the person that owns the home. Once you place your home in a trust it is now owned by the trust. Without the proper endorsement to your homeowner insurance policy, you could have a problem with coverage in the event of the claim.
How does your agent make certain your homeowner policy covers you personally and the trust?
Your agent will ask your insurance company to make a change to the policy so the home, contents, and the liability for both the trust and you personally are covered.
Does my insurance agent need to know about any other property that has been placed in a trust?
Yes. Rental property, vacant homes, vacation rental property all need insurance updates when property is placed in a trust.
What if you have an umbrella?
The umbrella company will also need to know the property is now in a trust
Setting up a trust for your property is a great way to plan how your property passes to your loved ones and heirs. Consult with your professionals, an attorney, tax advisor, or financial planner to make sure the trust is accomplishing your goals and intentions. Then contact your insurance agent to keep everyone in the know and to make sure you are always protected.