Is the owner of your property the insured?

October 17, 2013, by

title ins policy.pngOf course the owner of my property (me by definition, right?) is the insured on our property and casualty policy. Duh!

Well come to think of it, maybe not. At the advice of my lawyer and accountant, I put the apartment holding into an LLC, for liability protection. Am I still the insured? And if so, what if the place burned down, with the LLC as the owner but not the insured. Could the insurance company repudiate coverage? Yikes!

Note to self: contact my agent Monday and get the LLC at least added as an insured. (Editor's note: the insurance company's initial reaction is sometimes to charge a higher commercial rate for an LLC owner. We have found this can usually be avoided.)

And what about title insurance? I got a policy when I bought the apartments. Likewise with my house that I have now transferred to a residence trust. The title insurance company promised to cover me in each case, not some other party to whom I later transferred the property. What if a prior owner's IRS lien bubbles to the surface, or his deed of trust was never cleared? Are my LLC and my residence trust covered? Yikes again!

Second note to self: find out whether there's a way I can get title insurance coverage extended to the LLC and trust. (Editor's second note: there usually is, by obtaining an inexpensive endorsement to the original policy.)