Your insurance company knows who owns your property. For example, As part of your estate or financial planning, you decide to transfer ownership of your property to a trust or a limited liability company (LLC). That’s a smart move: it can protect you from liability and offers potential estate tax benefits.
A couple of years later, you have a fire, or a break-in, or someone slips and falls on your front steps. “No problem,” you think, and file a claim with your insurance company.
Your claim is denied. What happened?
Paperwork matters when it comes to who owns your property
Your insurance policy is in your name, Mr. and Mrs. John Smith. But legally, Mr. and Mrs. John Smith no longer own the property. The current owner, according to the deed, is the Smith Family Trust.
“But that’s us,” you say. “We still live here. We still pay the insurance premium. Doesn’t the insurance company know that it’s us?”
It’s not a question of what the insurance company “knows.” It’s a question of the paperwork, specifically, the legal entity that owns your property. And if that legal entity is a trust or an LLC, you have a headache. Because your insurer “knows” what your paperwork says.
We recently had an opportunity to save a customer money by switching insurance carriers. Unfortunately, the name on the deed didn’t match the policy, which delayed the change—and savings. (As a reminder, you can change insurance companies at any time.)
Keep your agent/broker informed
The solution is simple: If you do anything that affects your property, make sure your insurance agent/broker knows about it. If the name on the deed changes (who owns your property), you’ll save a lot of time and trouble down the road if you tell your insurer now.
That can be more than just a change in paperwork. What if you own a rental property with multiple units, live in one and rent out the others?
If the unit is owned by a legal entity, rather than you personally, you need two insurance policies:
- One to protect the building and the building’s legal owner
- A second to protect you and your belongings as a tenant in the building
Every situation is different. Before you make any changes in the ownership of your property, we strongly recommend consulting a legal expert.
Just make sure you keep your insurance company in the loop as well.
We hope you found this article on your insurance company knows who owns your property helpful. If you any questions about insurance or your current insurance policy, or would like a free insurance review, please call us at 877-576-5200.