Navigating the Process of Listing a Revocable Trust as “Additionally Insured”
Adding a revocable trust as “additionally insured” is turning out to be more complicated than I initially thought when it comes to insurance policies.
We first attempted to update my parents’ home and umbrella insurance through their broker to include their relatively new trust. However, their broker informed them that National General, the insurance provider, has already listed the trust correctly under the “additional interest” section. The broker also mentioned that the insurance company claimed that as long as the trust is named in an underlying policy, it doesn’t need to be explicitly included in the umbrella policy. I’ve asked the broker to provide evidence showing that a trust listed as “additional interest” is treated the same way as “additionally insured” based on policy definitions, but I’m skeptical they can do so.
Through some research online, I discovered that not all insurance carriers allow revocable trusts to be designated as “additionally insured.” This leads me to my next question: which carriers actually permit trusts to be recognized appropriately as additionally insured?
I hold another policy with the same insurance broker, but it goes through Safeco. I’ve also initiated the creation of a revocable trust and asked the broker to confirm whether I can add it as additionally insured with this carrier.
Why does this matter? I’ve heard from both an insurance broker and my current estate planning attorney that individuals who lost their homes in the Palisades fires faced claim denials because their revocable trusts weren’t properly reflected in their insurance policies.
For anyone interested, I found this informative article that clearly outlines the critical nuances of this issue: https://creativeplanning.com/insights/risk-management/trust-owned-home-insurance/
It sounds like you’re navigating a complex issue with ensuring that your revocable trust is properly covered under insurance policies. As you’ve pointed out, the terminology and how different insurers categorize trusts can vary significantly. Listing a trust as “additionally insured” versus “additional interest” can have critical implications, especially when it comes to claims.
It’s wise to press your broker for documentation or clarification on how the policy definitions interact. Many insurance policies do indeed treat “additionally insured” and “additional interest” differently, and it’s essential to understand these distinctions to avoid potential claim denials, as you’ve rightly noted.
As for which carriers allow for revocable trusts to be listed as “additionally insured,” the specifics can vary by state and insurer, so it might be beneficial to reach out to a few different insurance companies directly to inquire about their policies. Major carriers like State Farm, Allstate, or Farmers may have different approaches than regional providers, so gathering information across multiple insurers could help clarify your options.
It’s great that you’re being proactive in ensuring that your estate planning aligns with your insurance coverage. The link you shared also appears to be a valuable resource for understanding the nuances of insuring a trust, which can definitely help others facing similar scenarios. Good luck as you sort through this!