insurance when home is in a trust Janet Hicks asked 1 week ago
insurance when home is in a trust

My home is at the epicenter of the Eaton Fire. It is still standing but inundated with ash and smoke smell. I filed a claim with my insurance, Mercury. Now I am hearing they may not honor my claim because 10 years ago I placed my home in a revocable trust and the insurance policy was never amended to show the trust as the owner of the policy. The insurance policy is only in my name. The attorney who set up the trust for me never mentioned any insurance considerations and I never knew anything about this. Now I am afraid my insurer may not cover anything because of this.

1 Answers
Answer for insurance when home is in a trust Alexis Ricci Staff answered 2 days ago
0 Vote Up Vote Down

Hi Janet,
First, you should know that this is a fairly common scenario – many homeowners place their homes in revocable trusts for estate planning purposes without realizing there may be insurance implications.
There are several important points that work in your favor:
-You are still the beneficial owner of the property through the revocable trust – you haven’t truly transferred ownership to another entity in the way you would with a sale.
-You have maintained an insurable interest in the property, which is a fundamental principle of insurance.
-This is a technical discrepancy in how the policy is titled rather than a material misrepresentation of risk.
-Insurance companies often have notice provisions in their policies that allow for transfer of property into a revocable trust without voiding coverage.
Here are the steps we recommend:
-First, don’t panic. File your claim if you haven’t already and document all damage thoroughly with photos and notes.
-Contact your insurance agent immediately to discuss adding the trust to the policy – this can often be done with an endorsement.
-Consider consulting with an insurance attorney familiar with California law. If Mercury denies your claim over this trust issue, you may have strong legal grounds to challenge that denial.
-File a complaint with the California Department of Insurance if Mercury denies your claim based solely on the trust issue. The Department can often help mediate these situations.