The unthinkable has happened.  Your beautiful home has burned to the ground.  You’re numb.  You can’t comprehend that your kitchen, the poster bed, your favorite outfits, your family heirlooms, your photos, your past, are all gone.  It only took a few minutes.  How could this happen?

Then the second disaster strikes.  You find that your insurance policy, the property insurance you’ve been paying premiums on for years, doesn’t cover the loss.  Sometimes the coverage is not sufficient. Maybe there’s no replacement cost coverage. What about the contents? Maybe the home isn’t covered at all…. Why???  because the home was placed into a Living Trust but the insurance policy was not changed.


Judy and Dennis have a replacement-cost insurance policy on their home, as well as a $2 million umbrella policy.   About eight years ago they transferred their home into a living trust.  In the recent wildfires, the house burned to the ground, completely destroying the home and all its contents. The replacement cost is $1 million.  In speaking with Judy and Dennis, the insurance adjuster asks to review their trust document and he pulls a copy of the recorded deed.   He discovers that the house is owned by the trust.  But the policy is in the name of Judy and Dennis as individuals. There is no mention of the  trust on the policy.  The insurance company therefore refuses to cover the loss of the house but does cover the loss of the personal property belonging to Judy and Dennis.

In the same fire, a neighbor was trying to help them remove their belongings from the home. That neighbor is trapped in the home and suffers serious burns. The medical bills are $1 million and it is estimated that he will be unable to work for two years.  The neighbor sues the “owners” Judy and Dennis as individuals, as well as the trust, the titled owner of the home.  The homeowners’ policy and the $2 million Umbrella policy would cover Judy and Dennis but not the Trust.


Make sure that your insurance policy references the name of the trust. Ask your insurance company how they handle the ownership of a home held in a trust.  Know the replacement value of your home and update it yearly.  And make sure that all parties’ interests are accounted for within the policy. Each insurance carrier has a different way of handling these issues.  Some use a trust endorsement.  Some list the “owners” as the named insured.  Some put the trust as the named insured. There is no standard way.

Whatever you do, put your request in writing to your insurance agent and insist on a written document confirming coverage.  Oftentimes clients call and agent asking about coverage and then wrongly assume that the policy has been changed. And above all, remember, IF IT ISN’T IN WRITING, IT DOESN’T EXIST.

PS: the above example is hypothetical but similar cases are real.