Claims on residential property owned by trusts, LLCs, etc

[njexpat]

Interested in learning from anyone who has had a client who transferred ownership of a home to a trust, LLC, etc. , later experienced a claim, and failed to make the carrier aware of the change in ownership of the home.

Especially interested in any claims denials rejecting coverage because the trust, LLC etc was not listed as a named insured (or additional insured) on an unendorsed homeonwer policy.

Thanks

[LadyBroker]

I think there might be more than one issue here....if a residential property is transferred into the typical living trust, I find it hard to believe a carrier would deny a claim for that. However, if the ownership of the home is transferred to an LLC, I could see a case for that, as the LLC could be considered a commercial entity, and perhaps the carrier doesn't allow commercial ownership on their broadest Homeowner's Form...as well, an LLC can have many other individuals included, and would the carrier have to consider all of them as owners?

Just raising more questions, I know...

[CATHIEA]

Starting to become more comon for trusts to be put into an LLC rather than the individuals name. From what I understand it's being used more for those people who have a lot of assets (rental properties, car collections, etc) so they can split them into seperate trusts. The main thing for the agent is knowing which LLC owns what. Haven't had any difficulty adding the name of the trust/LLC on the personal lines policies and since these are relatively new haven't seen any claim issues. I'd also like to know if anyone is experiencing any issues with this.

[wlunday]

I remember, from years ago, where Safeco denied a total loss fire claim when the home owner transfered his property into "his church" to avoid the taxes. He was the minister and only member of the church...

Anyways, the house burned and the company made good to the mortgage company but refused, and won in court, to pay the remainder to the "prior" owner as he had no insurable interest in the property at claim time. The church never secured a policy. Hmmm... doesn't pay to cheat!

Swymmer

[Colonel]

In my State (Ohio) most preferred market companies have an endorsement for adding a Trust an the NI. Moving the house into an LLC makes a corporation the owner and most preferred companies restrict corporate owners on personal properties. There are several standard market companies that will list an LLC or Corp. as NI. I'm not sure how the higher-end companies who specialize in executive homes work; Anyone?

Again, the name of the game in most company claims departments is to find ways to deny coverage. The owner of the property not being the NI sounds like a good denial position to me.