Protecting Your Home: Why Your Trust Should Be Named on Your Homeowners Insurance Policy
Important to review your policy BEFORE you need it…
For homeowners who have placed their property in a trust, ensuring the trust is named on your homeowners insurance policy is a crucial yet often overlooked step. While transferring real estate into a trust helps with estate planning, probate avoidance, and asset protection, failing to update your insurance policy could leave you exposed to unexpected risks.
My Own Wake-Up Call
I’ll be honest—I didn’t know this myself. When my wife and I bought our home, we insured it in our names, assuming that was all we needed to do. Later, when we put the house into a trust, we never thought to go back and update our homeowners insurance. It wasn’t until recently, with all the devastating wildfires in Southern California, that I started thinking about what would happen if disaster struck. The scary realization? There could have been a gap in coverage for a policy we’ve been paying for this entire time.
Thankfully, I was able to make a quick call to my insurance provider and ensure the trust was properly added, but it made me realize how easily this crucial step can be overlooked.
Why This Matters
When a property is transferred into a trust, ownership technically changes from an individual to the trust itself. If your insurance policy still lists you personally as the named insured, the trust—which now holds legal title—may not be covered in the event of a claim. This could lead to complications, delays, or even denied claims when you need coverage the most.
Potential Risks of Not Naming the Trust
Claim Denials or Delays – If the trust is not listed as an insured party, the insurance company could argue that the actual owner (the trust) is not covered under the policy.
Gaps in Liability Protection – If someone is injured on the property and sues, having the trust properly named ensures that liability coverage extends to the correct legal entity.
Issues with Mortgage Requirements – Some lenders require proof that the trust is named on the policy to ensure continued protection of the asset.
How to Fix This
Updating your policy is typically a simple process:
✔ Call Your Insurance Provider – Ask if your policy includes your trust and request an update if necessary.
✔ Request an "Additional Insured" or "Additional Interest" Endorsement – Some insurers may allow you to add the trust while keeping your name as the primary insured.
✔ Provide Trust Documentation – Your insurer may require a copy of the trust or specific pages showing ownership.
Final Thoughts
While many homeowners assume their insurance policy automatically covers a trust-owned property, it’s always best to verify. A quick call to your insurance provider can ensure that your home—and your estate planning efforts—are fully protected.
If you’re unsure whether your trust is listed on your policy, take a few minutes to check. It’s a small step that could make a big difference in the long run. Trust me—I almost learned the hard way.