Transferring assets like your home into a trust is a smart way to protect them and plan for the future. But if you don’t update your insurance policies, you could face serious risks—like denied claims, legal trouble, or financial loss. Here’s why adding your trust as an additional insured on your insurance policy is vital and how to do it the right way.
1. Protects Your Home and Property
When you transfer your home into a trust, the trust becomes the legal owner—not you. That means your homeowners insurance needs to cover the trust, too. If the trust isn’t listed as an additional insured on the policy, your insurance company could deny your claim, leaving you to pay for damages or legal fees.
Example:
If a storm destroys your trust-owned home, but your homeowners’ insurance only lists your name as an individual, the insurance company might refuse to pay for repairs.
2. Prevents Insurance Gaps and Denied Claims
Insurance only covers the people or entities listed in the policy. If your trust owns the property but isn’t listed, your insurance company may not cover damages or lawsuits.
Example:
If a guest gets hurt at your rental property, which is held in a trust, but your homeowners’ insurance still lists only your name, the insurance company could deny the claim, leaving you personally responsible for medical bills or lawsuits.
3. Ensures Claims Get Paid Smoothly
When you file an insurance claim, the right name needs to be on the policy. If your trust isn’t listed, the insurance company may delay or deny payments - even if you’ve paid your premiums.
Example:
If a tree falls on your trust-owned home, but your insurance only has your name, the company may refuse to pay, claiming the property belongs to the trust—not you.
How to Add Your Trust to your Insurance Policies
Check your existing policies – Identify all insurance policies covering assets held by the trust.
Contact your insurance company – Request that the trust be added as an additional insured or named insured, depending on the policy.
Update documents – Make sure your policy clearly lists the trust (in addition to your name).
If you have any questions, please contact me.
About the Author
Kendra Hampton has nearly 20 years of legal experience. She manages her own estate planning practice and has helped hundreds of clients create and update their trust, will, and powers of attorney. Kendra is committed to educating clients on the importance of estate planning and crafting personalized planning strategies.
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