Due to the devastation of the fires impacting Southern California, there has been much speculation in the media about how insurance claims will be handled. Specifically, there are statements going around that if you own your home in trust, your homeowner’s insurance policy will not protect you or be honored in the case of any claims. I want to address this and advise on how you can be proactive.
While claim payouts may be slightly delayed, as the insurable interest will need to be confirmed, the claim will not be declined. This has been confirmed with several adjusters including the California Fair Plan. However, to avoid additional obstacles and delay by insurance companies, it is recommended you add your trust as an Additional Insured with your name listed as the Named Insured. This setup provides the broadest coverage for both the individual insured and the trust.
I recommend you reach out to your insurance broker or provider and direct them to make this adjustment for you in light of the insurance crisis we are facing in this state. Remind your provider that your trust is a grantor trust, revocable by you, and associated with your social security number. You will need to provide the name of your trust which includes the date as well as the name(s) of the trustee(s) – this would be you and your spouse if applicable. You may be asked to provide a copy of the certificate of trust.
If you are handling a trust administration, please reach out to the insurance broker as to how the property needs to be insured until the time it is sold or transferred, as that process may be different.
Author Disclaimer: This information is for general information purposes only. It should not be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.
