March Newsletter 2025
When it comes to protecting your home, having insurance isn't enough—you need to make sure it's structured correctly to avoid costly claim denials. One often-overlooked issue arises when a home is placed in a Revocable Trust but the trust itself isn’t listed on the insurance policy.
Recent disasters, like the LA wildfires, have highlighted this critical issue, with homeowners facing unexpected insurance battles simply because their trust was not named as an additional insured. Without this designation, insurance companies argue that the policyholder no longer has an “insurable interest” in the home—potentially leading to claim denials when coverage is needed the most.
How to Make Sure Your Home Is Fully Covered
If your property is held in a Revocable Trust, take these proactive steps to ensure it remains fully protected:
Review your insurance policies to confirm whether the trust is listed as an additional insured.
Contact your insurer or broker immediately if the trust is not included. Provide the legal title of the trust and request it be added to all applicable property policies.
Verify that the trust name is listed exactly as it appears on legal documents to prevent disputes.
Obtain written confirmation of the update from your insurance provider and keep it on file.
Why This Step Matters
Failing to add your trust as an additional insured leads to serious consequences. Beyond the risk of a denied claim, it will also:
· Disrupt your estate planning strategy, potentially complicating asset distribution and putting your long-term financial goals at risk.
· Delay insurance payouts by forcing them through probate, leaving you or your beneficiaries with unnecessary legal and financial burdens.
· Expose both you and the trust to significant financial loss, making it harder to recover from unexpected disasters.
A simple policy update now will prevent these costly complications later. Don't assume your home is fully protected, take action today to safeguard your assets, secure your estate plan, and ensure that your trust-owned home remains covered when you need it most.
(Inspired by insights from United Policyholders, a trusted resource on consumer insurance issues.)
