INSURING TRUST REAL ESTATE

“PLEASE MAKE MY TRUST AN ADDITIONAL INSURED PARTY ON MY HOMEOWNER’S INSURANCE POLICY”

In an unpublished Michigan Court of Appeals opinion, the court determined that a homeowner’s insurance company has no obligation to pay on a claim after the policy holder’s death if the real estate is held in trust UNLESS the trust has been named as an additional insured on the policy. 

The case revolved around a Jackson County family. The owner transferred ownership of his home to his living trust and later died. Following the owner’s death, the premiums were paid, renewing the policy.

​At some point during the trust administration, family members gathered at the home to divide the decedent’s personal belongings. One relative, checking to be sure an exterior door was locked, fell through a staircase and was injured.

The trial court determined that Fremont Insurance Company was required to pay the claim for damages, but the Michigan Court of Appeals reversed.

The Michigan Court of Appeals determined that the insurance policy was like a contract, and the parties to the contract were determined by the policy documents. At the homeowner’s death, the insurance company no longer had an obligation to pay, despite the fact that the premiums had been kept up to date. The court ruled that the trust was not an insured party under the insurance policy.

How to avoid this result? Be sure to name your trust as an additional insured party on your homeowner’s insurance. Call your insurer today and be sure your trust is an insured party. You simply need to say:

“Please make my trust an additional insured party on my homeowner’s insurance policy.”
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If you aren’t sure if your trust is named as an additional insured party, just call your insurance agent and ask. This is something you must do.

Insuring your trust property is your responsibility. It is very unlikely that anyone did this for you at the time your trust was established. Please doublecheck to be sure your trust is an additional insured party on your policy every year and whenever you change insurance companies.