Liability & Title Insurance and Your Living Trust

We Californians have become more nervous about wildfires over the past few years, not to mention the typical earthquake. If you transfer your home into your living trust (as you should!), be sure to call your homeowner's insurance company and add the trust as an "additional insured" on your policy. With most insurance companies, this will not increase your premium, and will keep your home insured inside your living trust in the event of a natural disaster.

Likewise, review your title insurance policy to make sure it defines "insured" to include your living trust. This will protect you in the event of a boundary dispute with a neighbor. You can find your title policy with the original escrow paperwork when you purchased your home. The Homeowner's Policy of Title Insurance (after 1998) is the default policy in California and includes transfers to living trusts and will not terminate title insurance. By contrast, the CLTA Standard Coverage Policy (before 1998) does not include living trusts as an insured and will cancel your title insurance policy. Either way, you can contact the title insurance company and obtain an "Additional Insured" endorsement to add your living trust to the policy so your home will stay covered in the event of a dispute with your neighbor.

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