Why Your Homeowner’s Insurance May Not Cover Your Trust—and How to Fix It

Why Your Homeowner’s Insurance May Not Cover Your Trust—and How to Fix It

Placing your home in a revocable living trust is a smart estate planning step that protects your privacy, avoids probate, and ensures your home passes smoothly to your beneficiaries. But many homeowners overlook one critical follow-up: updating their homeowner’s insurance.

If your trust isn’t correctly added to your policy, your insurance company could deny claims—potentially leaving your home and your financial security at risk. Some insurance policies are written in a way that would allow a Trustee or Personal Representative to make a claim on the policy, but some insurers look for opportunities to avoid payouts where possible. This can lead to lawsuits or drawn-out battles to access the insurance benefits. In the Labor Day fires of 2020, more than 4,000 homes were destroyed. As fire seasons have become more severe in Oregon, being proactive on this issue is key.

Here’s what you need to know to protect your home fully.

Why a Trust Changes Insurance Coverage

When you transfer your home into a revocable living trust, the legal owner of the property shifts from you to the trust itself. While this benefits your estate plan, your homeowner’s insurance policy typically remains in your name. That can create a coverage gap.

Unless your trust is formally recognized by your insurance provider, claims for property damage or liability may be denied. While not always the case, it is important to ensure you have taken all steps to provide ease in the event of a crisis.

What Could Go Wrong Without Updating Your Policy?

Failing to update your insurance after transferring your home into a trust exposes you to three key risks:

Claim Denials

Your policy covers the named owner of the home. If your insurer doesn’t recognize your trust as the owner, they could deny claims for damage or loss.

Liability Gaps

If someone is injured on your property, the trust might not be protected from lawsuits or liability claims, putting your beneficiaries or trustee at financial risk.

Policy Cancellation

Some insurance companies view transferring property into a trust as a significant ownership change. Without disclosure, your insurer might cancel your policy for non-disclosure or misrepresentation.

Solution: Add Your Trust as an Additional Insured

To close these potential coverage gaps, it’s essential to list your trust as an additional insured on your homeowner’s policy. This ensures:

The trust and trustee are fully protected.
Claims are processed without ownership-related complications.
Liability coverage extends to your trust.

Tip: Some insurers might suggest listing your trust as an additional interest instead—but that only notifies them of your trust’s existence. It does not provide coverage. Be clear: your trust needs to be an additional insured.

How to Update Your Policy in 5 Simple Steps

Call Your Insurance Company
Inform them that your home is now owned by a revocable living trust and request to add the trust as an additional insured.
Provide Documentation
Be prepared to share:
- A certificate of trust or the trust document itself.
- A copy of the deed showing the home’s transfer to the trust.
Request Correct Policy Wording
Ensure your trust’s name appears as:
“[Your Name], as Trustee of [Your Trust Name], dated [Trust Date].”
Review the Updated Policy
Once changes are made:
- Confirm that both property and liability coverage apply to the trust.
- Check for any new exclusions or limitations.
Maintain Ongoing Updates
If you amend your trust or switch insurance companies, update your policy to maintain uninterrupted coverage.

FAQs: Common Questions from Homeowners

Q: Doesn’t my current policy already protect my trust?
No. Unless the trust is named as an additional insured, your coverage may not apply to the trust. There is also a risk that any payout would trigger a probate if a check was made payable to you or your estate.

Q: Will adding a trust raise my premiums?
Typically not. While your insurer may charge a small administrative fee, adding a trust usually doesn’t affect your rates.

Q: Is this process complicated?
Not at all. A quick phone call and submission of basic documents is often all it takes.

Q: What if I am a Trustee administering a trust where the creator of the trust has already passed?

Reach out to the insurer and ask about how the property should be insured until the time it is sold or transferred, as that process may be different. If the home is sitting vacant, that may also raise concerns for the company. Speak to an attorney about these issues before calling the insurer.

Protect Your Home—and Your Estate Plan

At Willamette Legacy Law, we help homeowners secure every aspect of their estate plan—including ensuring your home’s insurance properly covers your trust.

We can assist with: