New Law Affecting Your Title Insurance

28 July 2015 lawreynold Articles

How to add my Trust as an additional insured on my title insurance?

Do I need to obtain an endorsement from my title insurance in order to transfer my real estate to my trust without losing coverage?  Yes, if the title insurance stops coverage upon transfer to a trust.

  • Locate your title insurance policy. If missing, contact the title company that handled the escrow when you purchased the real property and ask for a copy.
  • Review the title insurance policy to see if the scope of coverage is restricted and does not transfer to trust, pursuant to a new California law, policies issued after May 18, 2014 are supposed to include coverage after transfer to a trust.

If your title insurance does not include transfers to trust, then follow the steps below to obtain an Endorsement from Title Insurance to add your trust as an additional insured.

  • Determine if your Title insurer still exists, and if not, what title company currently holds the policy. This may take some internet research.
  • Request CLTA Endorsement Form 107.9 from title company (see sample linked below). You will need to provide the title company with a copy of the trust, a copy of the title insurance, and a copy of the transfer deed.
  • Determine the price of the endorsement. Usually title companies charge a nominal fee for this endorsement.
  • Keep your endorsement and title policy in a safe place.

What to do if the company refuses to endorse your trust?  You can purchase expanded coverage to include transfers to and from trusts.  You can also purchase an entirely new policy if you are unable to find the old title insurance policy.  It is usually less expensive to purchase title insurance than for your real estate to be left outside of the trust because it costs thousands of dollars to go through probate upon your death.  You will have to weigh the cost of the endorsement process against whether you are concerned about needing your title insurance in the future.

Click the links below to access the documents that are appropriate for you- depending on your married status. 

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