Can Kin insure my home if it’s owned by a trust?
Yes, Depending on the state and policy type, we can cover homes that are owned by a trust. And that’s notable considering most insurers either don’t insure these homes or limit the coverage enough that it can leave homeowners under-protected.
There’s no industry-standard approach to insuring trust-owned properties, so our take is simple: find the solution that benefits homeowners in this unique situation the most. At Kin, that means:
-
We insure trust-owned homes when they’ve been set up for property interests only.
-
The trust can be a named insured.
-
If we have a human trustee as the named insured, then the trust can be a co-applicant or an additional insured depending on the state and the type of insurance.
Let’s take a look at what trust is and how that might make insuring a home owned by one more complicated.
What is a trust?
A trust is an arrangement usually used to minimize estate taxes. It allows a third party (the trustee) to hold assets, such as property, on behalf of beneficiaries. Homes are typically held in trusts to keep the property from entering probate, which can be a long and drawn-out legal process to settle a deceased person’s estate.
Potential coverage gaps for trust-owned homes
From an insurance perspective, trusts can create unique issues when they’re used for homeownership. Home insurance policies are written to protect the home and its owner. If that owner is a trust, then the policy protects the trust’s liability and personal property – not yours.
Unlike Kin, who includes residents of the property as named insureds, if an insurer only lists the trust as the named insured, then the trust typically has coverage for the:
-
Dwelling
-
Other structures on the property.
-
Personal property.
-
Personal liability.
However, occupants of the home typically may not get liability protection. The trust would because trusts are a legal entity, but they don’t have spouses, children, or relatives.
That means if your child accidentally hits a baseball through your neighbor’s window, you’d be responsible for paying those damages out of pocket because only the trust has liability coverage.
If the trust is the named insured and none of the residents, then personal property is typically not covered while located at the home or outside the home. That means if you lose your luggage while traveling, you won’t have coverage to replace it. This is because, unlike one of our policies where a resident should be a named insured as well as the trust if your trust owns your insurance, only the personal property of the trust is protected.
How Kin insures trust-owned homes
We’ve tried to close these coverage gaps so our customers get as much protection as possible. Here’s how we do it:
-
Residents of the property are the named insureds on the homeowners' insurance policy.
-
Trusts are added as an additional insured.
In other words, residents and the trust get the full benefits of the policy – including worldwide liability coverage. That means you and your family have coverage for bodily injury and property damage accidentally caused to others no matter where the incident happens.
That’s a significant benefit of our coverage compared to other providers. When insurers do offer liability coverage for trust-owned homes, they often limit this essential protection or exclude it altogether.
We’ve got trust-owned homes covered
We want to make sure the people who live in the home get the appropriate protection for their liabilities and belongings – wherever they are in the world. That’s why we write trust-owned homes the way we do.
Questions about insuring your home? Give us a call at 855-717-0022.
