How to Insure Property in a Land Trust

How to Insure Property in a Land Trust


Hi, Clint Coons here with the Anderson Business
Advisors and in this session we’re going to discuss insuring property when it’s held inside
of a land trust. Because a lot of people when they transfer
property into the land trust the question always comes up, “What do I do about my insurance
policy?” Especially if you have a mortgage on your
property, because you want to make sure that your insurance stays up-to-date and you’re
insuring the proper parties. Because when title leaves your name, if you
recall if you look at your policy you’re one of the named insureds on the policy. Now when the property is no longer held in
your name, it’s held in the trust you’re going to need to change that. What you need to do is you need to make sure
that your trust is one of the named insureds under your policy. Now in addition to that you should look at
naming your limited liability company as an additional insured under the policy. There’s two things that we’re looking at there
with the land trust, we want to have our land trust itself this is the land trust as a named
insured and then we want to have the LLC which is the beneficiary down here, this is the
bene, we want to have that as an additional insured under the policy. Now this can be difficult for many people
when they’re working with their insurance providers because a lot of insurance providers
they’re just not accustomed to dealing with land trust or limited liability companies
and they don’t understand what it is you’re doing. You’re forced to try to explain something
to them that is foreign and then it causes problems with the policy. What you might want to do then is switch your
insurance provider to someone who is accustomed to working with land trust or with limited
liability companies. One of the insurers that I’ve come across
as a company called the National Real Estate Insurance Group, you can Google them, I’ve
talked to some of their individual before their representatives and those clients of
mine that I know that use them said they have no problem having this type of arrangement
setup. That they understand land trust, they understand
limited liability companies and they set the policies up the right away and you’re not
going to get pushed back. I even understand that with umbrella policies
this is a question that comes up a lot now that I’ve set up a land trust LLC, “Do I need
to maintain an umbrella policy?” Well, you should. I mean personally should have an umbrella
policy and then on top of that if you were looking at some type of cross insurance across
all of your structures here an umbrella policy they may be able to do that as well as some
additional insurance you can have even though you have multiple entities. This wouldn’t work with say a state farm,
I’ve tried it before and they just look at you and they say, “I’ve never heard of this
before. We don’t issue those types of policies.” When it comes to insuring make sure your land
trust set up as a named insured and name the limited liability company as an additional
insured under the policy. My name’s Clint Coons with Anderson Business
Advisors.

8 thoughts on “How to Insure Property in a Land Trust

  1. Good content. Thank you!

  2. Is there anyway to get support with the Land Trust in El Paso TX. No one seems to know what we're talking about and it's $100 consultation we do.

  3. 2:51

  4. Hi Clint, when wholesaling and putting the purchase contract in the WS Trust name, should we insure the properties?

  5. I was told to have as the named insured the trustee and the trust Itself and all beneficiaries as there interest may appear

    Thats different from what you mentioned which is the best to do it

  6. I'm having this issue now
    1: should I have my trustee as a named insured? If so

    Does this work for named insured 123 main st trust Joe Joe as trustee.

  7. Clint, If I use a land trust and LLC to protect my primary residence, do I also need to keep myself as the insured?

  8. you can't name a beneficiary as an additional insured because they have no ownership interest I've already called nearly 20 insurance companies and and brokers nobody will do. not only that to get a commercial liability policy for the beneficiary you have to do it under property.

    On the other hand, a “land trust,” is a form of ownership of real estate where the trust has title to real

    property and the beneficiaries have the beneficial interest (personal property) as well as right of control and

    direction. Put another way, whatever the beneficiary says, the trustee must do. Consequently, in a land trust

    arrangement, the beneficiaries, rather than the trustee, are liable for the defective condition on the property.

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