Why You Should Update Your Homeowner’s Insurance if Your House Is in a Trust

A revocable living trust is a powerful estate planning tool that helps homeowners avoid probate, maintain control of their assets, and ensure a smooth transition of property to their beneficiaries. However, one crucial step that often gets overlooked is updating your homeowner’s insurance policy to reflect the trust’s ownership.

If your house is in a revocable living trust, here are five reasons to check in with your insurance company and make sure everything is properly aligned.

1. Ensuring Proper Coverage

When you transfer your home into a revocable living trust, the trust becomes the legal owner of the property. While this typically doesn’t affect your insurance coverage, it’s important to verify that the policy correctly lists the trust as an insured party. Some insurers may require you to add the trust as an additional insured or an additional interest to ensure there are no gaps in coverage.

2. Avoiding Claim Issues

If your homeowner’s insurance policy does not properly reflect the trust’s ownership, it could create complications in the event of a claim. Insurance companies might delay or even deny a claim if the named insured on the policy doesn’t match the legal owner of the home. A quick conversation with your insurance provider can prevent these issues before they arise.

3. Meeting Lender and Policy Requirements

If you have a mortgage on your home, your lender likely requires you to maintain adequate insurance coverage. Some lenders may have specific requirements regarding trusts and insurance policies, so it’s wise to check with both your insurer and mortgage provider to ensure compliance with all requirements.

4. Keeping Liability Protection in Place

Your homeowner’s policy not only covers damage to your property but also provides liability protection if someone is injured on your property. Ensuring that the trust is properly included in your policy helps maintain this important protection. Without proper updates, there could be uncertainty about whether a claim would be covered.

5. It’s a Simple Step That Provides Peace of Mind

The good news is that updating your insurance policy to reflect your trust is usually a simple process. Most insurance companies can make the necessary adjustments with a phone call or a simple form. Taking the time to confirm that your trust is properly recognized on your policy can prevent future headaches and ensure that your home remains fully protected.

Final Thoughts

A revocable living trust is an excellent way to manage your estate, but it’s essential to make sure your homeowner’s insurance aligns with your estate plan. At Kinney Law Office, we help clients navigate all aspects of estate planning, ensuring that your assets are properly protected and that your wishes are carried out smoothly.

If you have questions about your estate plan, including how your trust affects your home and insurance, contact us today. We’re here to help you build a plan that works the way you want—when your family needs it most.