How Insurance Works

Whose Name Should Be on Insurance Policy for House if Parent Put Child’s Name on the Deed?

Today’s question is from New London
Wisconsin and it’s the following if a parent put his kid’s name on the deed of
his house should he carry the insurance or does it have to be in the name of the
children my dad deeded the house to my brother
and I he was checking into the price of the house insurance and his agent said
that the insurance had to be in the kids name and he had to have renter’s insurance
so good question here in general I would talk to your agent and see what the
policy says but the name on the title of the deed whoever currently owns the home
is likely the person who needs to be the named insured if your dad remains on the
title it’s possible he could be named as insured as well but if it’s just you two
children on the home then it’s likely that you’re gonna need to be the named
insured because if something happens such as a fire you are the actual legal
owners who would need to be made whole from the insurance company so I would
double check this with the agent but in general for my other listeners watching
this is why I warn against transferring a home during life to your
children it can have other legal implications once the title is in their
name and suddenly managing the property isn’t the same as when you owned it
yourself for this reason I like to use trust planning to pass a home to the
children so that you can remain living there and the trust can be the named
insured on the insurance policy during your life then after you’re gone the
trust can remain the insured until your children sell the home or transfer it to
one of them or whatever you say is to happen in the trust you always want your
insurance policy on the home to match the actual legal title the deed saying
who actually owns the home because in the event you have a fire or something
terrible you want to make sure you’re able to recover against that policy so
great question and thank you for asking!

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