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#2134009 - 06/12/17 09:43 PM inter vivos mortgage hazard insurance
kbaud Offline
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Joined: Jun 2017
Posts: 2
Does anyone know if a mortgage is closed in an inter vivos trust if both the trust and the individuals that signed the note must be listed as insured parties on the policy? It seems I came across some information that said the contents of the home were personal property and the individuals could file a loss claim for that, but if there was a loss to the structure then the trust would have to be an insured party otherwise it could jeopardize coverage since the trust owned the home. I know little about trusts...this is my kryptonite.

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#2134036 - 06/13/17 09:28 AM Re: inter vivos mortgage hazard insurance kbaud
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
The owner of the property (trust) always has to be a named insured. You cannot insure something that you do not own. If you could, I would buy a policy on my neighbors house just before I burnt it down and collect the insurance. Whether or not the insurance will cover personal contents owned by another party, you would have to read the policy, but typically, if they were also named insureds, it would cover them..
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#2134037 - 06/13/17 09:39 AM Re: inter vivos mortgage hazard insurance kbaud
Pauli Loeffler Offline
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Pauli Loeffler
Joined: Jan 2011
Posts: 77
OK
This isn't an area in which I claim any expertise, but in the event of a loss, the policy will pay to the named insured. I am aware that if the insured is a named individual rather than the Trust even though title to the property is in the name of the Trust, and say John Doe is injured on the property, John Doe will be paid by the insurer on behalf of the individual but may still be able to go after the Trust since it is the owner of the property.

The grantors/settlers of inter vivos (grantor or revocable) trusts do not usually list personalty transferred to the trust, and I doubt the mortgagee is taking a security interest in contents. If the grantors of the Trust are not co-borrowers, I believe the contents will be deemed to be owned by the Trust and insured, but this is a question that the grantors/trustees should put to their insurance agent.

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#2134270 - 06/14/17 02:50 PM Re: inter vivos mortgage hazard insurance rlcarey
kbaud Offline
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Joined: Jun 2017
Posts: 2
Thanks Rlcarey. I had done some research and the data I read said basically the same thing, but the info wasn't from a source I was familiar with. I appreciate your input.
Last edited by kbaud; 06/14/17 02:52 PM.
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