Getting Homeowner’s insurance policy for LLC?

[SK in CV]

[quote=Fearful]
– Finally, I know well about companies being created to shield the owner’s assets from liability for the company’s actions, but not the other way around. If you own a company, and creditors come after you, the company (and its assets) are part of the pool of assets the creditors come after. [/quote]

That’s a great point that I completely missed! Ownership of the home inside an LLC offers zero protection against creditors. Even worse than relatively small homeowners exemption, there is NO exemption. It would be subject to the exact same exposure to creditors as ownership of stock in a publicly traded company.

[SK in CV]

[quote=earlyretirement]
Actually I’d love to just buy a homeowner’s policy under my own name. The only thing I worry about is if there is some major loss like a fire, I would just want to make sure an insurance company doesn’t try to weasel out of paying because my name isn’t on the title deed. [/quote]

It wouldn’t be weaseling out of anything. You have no insurable interest. As a practical matter, you cannot insure something you don’t own.

[SK in CV]

[quote=earlyretirement]
Actually I’d love to just buy a homeowner’s policy under my own name. The only thing I worry about is if there is some major loss like a fire, I would just want to make sure an insurance company doesn’t try to weasel out of paying because my name isn’t on the title deed. [/quote]

It wouldn’t be weaseling out of anything. You have no insurable interest. As a practical matter, you cannot insure something you don’t own.

[SK in CV]

[quote=earlyretirement]
Actually I’d love to just buy a homeowner’s policy under my own name. The only thing I worry about is if there is some major loss like a fire, I would just want to make sure an insurance company doesn’t try to weasel out of paying because my name isn’t on the title deed. [/quote]

It wouldn’t be weaseling out of anything. You have no insurable interest. As a practical matter, you cannot insure something you don’t own.

[SK in CV]

[quote=earlyretirement]
Actually I’d love to just buy a homeowner’s policy under my own name. The only thing I worry about is if there is some major loss like a fire, I would just want to make sure an insurance company doesn’t try to weasel out of paying because my name isn’t on the title deed. [/quote]

It wouldn’t be weaseling out of anything. You have no insurable interest. As a practical matter, you cannot insure something you don’t own.

[SK in CV]

[quote=earlyretirement]
Actually I’d love to just buy a homeowner’s policy under my own name. The only thing I worry about is if there is some major loss like a fire, I would just want to make sure an insurance company doesn’t try to weasel out of paying because my name isn’t on the title deed. [/quote]

It wouldn’t be weaseling out of anything. You have no insurable interest. As a practical matter, you cannot insure something you don’t own.

[earlyretirement]

[quote=SK in CV][quote=earlyretirement]
Actually I’d love to just buy a homeowner’s policy under my own name. The only thing I worry about is if there is some major loss like a fire, I would just want to make sure an insurance company doesn’t try to weasel out of paying because my name isn’t on the title deed. [/quote]

It wouldn’t be weaseling out of anything. You have no insurable interest. As a practical matter, you cannot insure something you don’t own.[/quote]

Actually SK in CV…. today I talked to Farmers Insurance Group and fortunately the agent said they set up homeowner’s insurance with LLC’s all the time. So I’m really happy about that.

Here is what he wrote, “As long as your family is living in the house we can issue the policy as owner occupied..we do them all the time with LLC’s”.

So for those of you that are interested and searching… Farmers Insurance sounds like a good bet.

Another agent at another company told me they don’t do them but they said besides Farmers Fund, Chubb is another option. I’m just happy to have found an agent that said they can do it for almost the same price. Of course I’ll find out later this week what their definition of “almost” is.

Yet another agent at a different company told me that if I didn’t have any success with the larger companies, his company could write up a property and liability policy for the actual house but I would need to get a separate policy for renter’s insurance for the contents of the house. He said that in some states it’s really difficult to get insurance with LLC’s so that is the route that his clients are going and it totally protects the clients in the event of a major loss.

I figured there had to be a way. Under the circumstances, even though an LLC owns it, I figured there had to be companies out there that would realize the situation and realize they have no more risk at all when there is only a single member/person that owns the LLC and the sole purpose of the LLC is to hold the asset of the house and there is no mortgage.

While I don’t hear much about this strategy, I know other people are doing it. Just in doing some google searches on the topic, I came across other people that were doing the exact same thing.

Hope this helps others.

[earlyretirement]

[quote=SK in CV][quote=earlyretirement]
Actually I’d love to just buy a homeowner’s policy under my own name. The only thing I worry about is if there is some major loss like a fire, I would just want to make sure an insurance company doesn’t try to weasel out of paying because my name isn’t on the title deed. [/quote]

It wouldn’t be weaseling out of anything. You have no insurable interest. As a practical matter, you cannot insure something you don’t own.[/quote]

Actually SK in CV…. today I talked to Farmers Insurance Group and fortunately the agent said they set up homeowner’s insurance with LLC’s all the time. So I’m really happy about that.

Here is what he wrote, “As long as your family is living in the house we can issue the policy as owner occupied..we do them all the time with LLC’s”.

So for those of you that are interested and searching… Farmers Insurance sounds like a good bet.

Another agent at another company told me they don’t do them but they said besides Farmers Fund, Chubb is another option. I’m just happy to have found an agent that said they can do it for almost the same price. Of course I’ll find out later this week what their definition of “almost” is.

Yet another agent at a different company told me that if I didn’t have any success with the larger companies, his company could write up a property and liability policy for the actual house but I would need to get a separate policy for renter’s insurance for the contents of the house. He said that in some states it’s really difficult to get insurance with LLC’s so that is the route that his clients are going and it totally protects the clients in the event of a major loss.

I figured there had to be a way. Under the circumstances, even though an LLC owns it, I figured there had to be companies out there that would realize the situation and realize they have no more risk at all when there is only a single member/person that owns the LLC and the sole purpose of the LLC is to hold the asset of the house and there is no mortgage.

While I don’t hear much about this strategy, I know other people are doing it. Just in doing some google searches on the topic, I came across other people that were doing the exact same thing.

Hope this helps others.

[earlyretirement]

[quote=SK in CV][quote=earlyretirement]
Actually I’d love to just buy a homeowner’s policy under my own name. The only thing I worry about is if there is some major loss like a fire, I would just want to make sure an insurance company doesn’t try to weasel out of paying because my name isn’t on the title deed. [/quote]

It wouldn’t be weaseling out of anything. You have no insurable interest. As a practical matter, you cannot insure something you don’t own.[/quote]

Actually SK in CV…. today I talked to Farmers Insurance Group and fortunately the agent said they set up homeowner’s insurance with LLC’s all the time. So I’m really happy about that.

Here is what he wrote, “As long as your family is living in the house we can issue the policy as owner occupied..we do them all the time with LLC’s”.

So for those of you that are interested and searching… Farmers Insurance sounds like a good bet.

Another agent at another company told me they don’t do them but they said besides Farmers Fund, Chubb is another option. I’m just happy to have found an agent that said they can do it for almost the same price. Of course I’ll find out later this week what their definition of “almost” is.

Yet another agent at a different company told me that if I didn’t have any success with the larger companies, his company could write up a property and liability policy for the actual house but I would need to get a separate policy for renter’s insurance for the contents of the house. He said that in some states it’s really difficult to get insurance with LLC’s so that is the route that his clients are going and it totally protects the clients in the event of a major loss.

I figured there had to be a way. Under the circumstances, even though an LLC owns it, I figured there had to be companies out there that would realize the situation and realize they have no more risk at all when there is only a single member/person that owns the LLC and the sole purpose of the LLC is to hold the asset of the house and there is no mortgage.

While I don’t hear much about this strategy, I know other people are doing it. Just in doing some google searches on the topic, I came across other people that were doing the exact same thing.

Hope this helps others.

[earlyretirement]

[quote=SK in CV][quote=earlyretirement]
Actually I’d love to just buy a homeowner’s policy under my own name. The only thing I worry about is if there is some major loss like a fire, I would just want to make sure an insurance company doesn’t try to weasel out of paying because my name isn’t on the title deed. [/quote]

It wouldn’t be weaseling out of anything. You have no insurable interest. As a practical matter, you cannot insure something you don’t own.[/quote]

Actually SK in CV…. today I talked to Farmers Insurance Group and fortunately the agent said they set up homeowner’s insurance with LLC’s all the time. So I’m really happy about that.

Here is what he wrote, “As long as your family is living in the house we can issue the policy as owner occupied..we do them all the time with LLC’s”.

So for those of you that are interested and searching… Farmers Insurance sounds like a good bet.

Another agent at another company told me they don’t do them but they said besides Farmers Fund, Chubb is another option. I’m just happy to have found an agent that said they can do it for almost the same price. Of course I’ll find out later this week what their definition of “almost” is.

Yet another agent at a different company told me that if I didn’t have any success with the larger companies, his company could write up a property and liability policy for the actual house but I would need to get a separate policy for renter’s insurance for the contents of the house. He said that in some states it’s really difficult to get insurance with LLC’s so that is the route that his clients are going and it totally protects the clients in the event of a major loss.

I figured there had to be a way. Under the circumstances, even though an LLC owns it, I figured there had to be companies out there that would realize the situation and realize they have no more risk at all when there is only a single member/person that owns the LLC and the sole purpose of the LLC is to hold the asset of the house and there is no mortgage.

While I don’t hear much about this strategy, I know other people are doing it. Just in doing some google searches on the topic, I came across other people that were doing the exact same thing.

Hope this helps others.

[earlyretirement]

[quote=SK in CV][quote=earlyretirement]
Actually I’d love to just buy a homeowner’s policy under my own name. The only thing I worry about is if there is some major loss like a fire, I would just want to make sure an insurance company doesn’t try to weasel out of paying because my name isn’t on the title deed. [/quote]

It wouldn’t be weaseling out of anything. You have no insurable interest. As a practical matter, you cannot insure something you don’t own.[/quote]

Actually SK in CV…. today I talked to Farmers Insurance Group and fortunately the agent said they set up homeowner’s insurance with LLC’s all the time. So I’m really happy about that.

Here is what he wrote, “As long as your family is living in the house we can issue the policy as owner occupied..we do them all the time with LLC’s”.

So for those of you that are interested and searching… Farmers Insurance sounds like a good bet.

Another agent at another company told me they don’t do them but they said besides Farmers Fund, Chubb is another option. I’m just happy to have found an agent that said they can do it for almost the same price. Of course I’ll find out later this week what their definition of “almost” is.

Yet another agent at a different company told me that if I didn’t have any success with the larger companies, his company could write up a property and liability policy for the actual house but I would need to get a separate policy for renter’s insurance for the contents of the house. He said that in some states it’s really difficult to get insurance with LLC’s so that is the route that his clients are going and it totally protects the clients in the event of a major loss.

I figured there had to be a way. Under the circumstances, even though an LLC owns it, I figured there had to be companies out there that would realize the situation and realize they have no more risk at all when there is only a single member/person that owns the LLC and the sole purpose of the LLC is to hold the asset of the house and there is no mortgage.

While I don’t hear much about this strategy, I know other people are doing it. Just in doing some google searches on the topic, I came across other people that were doing the exact same thing.

Hope this helps others.

[earlyretirement]

[quote=Fearful]Not sure if these are legitimate issues, but it seems to me:

– If the LLC owns real estate in California and is doing anything with that real estate (e.g. renting it to you) it is conducting business in California.

– If the LLC owns the real estate and lets you live in it rent free, it is not an arms length relationship.

– If the LLC exists for the purpose of protecting personal assets (i.e. has no or little business other than letting its owner live for free in the real estate it owns), then the courts might not provide protection of the company’s assets from the owner’s liabilities. The company is set up for little purpose other than acting as a shield, so the company’s function in that regard can be ignored. See “piercing the corporate veil”.

– Finally, I know well about companies being created to shield the owner’s assets from liability for the company’s actions, but not the other way around. If you own a company, and creditors come after you, the company (and its assets) are part of the pool of assets the creditors come after. The only thing I can think of is you hold a minority interest in the LLC, and so the majority’s interests are protected. So you have, say, 20% ownership of the LLC, which means you have 20% ownership of the house via the LLC … why not just give 80% of the house to someone else in the first place?

The whole thing sounds implausible to me, but I am no authority. Please, if you get an expert opinion on this, I would love to hear it.[/quote]

Hi Fearful,

Thanks for taking the time to comment. I did in fact talk to two lawyers that specialize in this in California and they both told me that you do NOT need to set up or report this or pay the $800 franchise tax fee to California. After I heard it one time I got a second opinion and he said the same thing.

Both did say that in essence the LLC would be “renting” the property to myself and he had the paperwork/contracts for this.

I realize any legal structure obviously isn’t perfect but I figure it’s best to do what is sound and to protect yourself the best that you can. Anyone can tell you that there isn’t a perfect system but it’s best to take the best steps so that is what I’m attempting to do.

I’d love to hear other legal opinions on this topic if any of you on the board are attorneys. Especially attorneys that specialize in Estate planning issues.

I don’t pretend to know the ins and outs on this topic as I certainly do not. When I was doing due diligence on it, even friends that are lawyers told me they don’t know anything at all about estate or asset protection and to talk to an attorney that specialized in asset protection so that is what I did. But of course I’d love to hear other lawyers points of views on it.

Thanks.

[earlyretirement]

[quote=Fearful]Not sure if these are legitimate issues, but it seems to me:

– If the LLC owns real estate in California and is doing anything with that real estate (e.g. renting it to you) it is conducting business in California.

– If the LLC owns the real estate and lets you live in it rent free, it is not an arms length relationship.

– If the LLC exists for the purpose of protecting personal assets (i.e. has no or little business other than letting its owner live for free in the real estate it owns), then the courts might not provide protection of the company’s assets from the owner’s liabilities. The company is set up for little purpose other than acting as a shield, so the company’s function in that regard can be ignored. See “piercing the corporate veil”.

– Finally, I know well about companies being created to shield the owner’s assets from liability for the company’s actions, but not the other way around. If you own a company, and creditors come after you, the company (and its assets) are part of the pool of assets the creditors come after. The only thing I can think of is you hold a minority interest in the LLC, and so the majority’s interests are protected. So you have, say, 20% ownership of the LLC, which means you have 20% ownership of the house via the LLC … why not just give 80% of the house to someone else in the first place?

The whole thing sounds implausible to me, but I am no authority. Please, if you get an expert opinion on this, I would love to hear it.[/quote]

Hi Fearful,

Thanks for taking the time to comment. I did in fact talk to two lawyers that specialize in this in California and they both told me that you do NOT need to set up or report this or pay the $800 franchise tax fee to California. After I heard it one time I got a second opinion and he said the same thing.

Both did say that in essence the LLC would be “renting” the property to myself and he had the paperwork/contracts for this.

I realize any legal structure obviously isn’t perfect but I figure it’s best to do what is sound and to protect yourself the best that you can. Anyone can tell you that there isn’t a perfect system but it’s best to take the best steps so that is what I’m attempting to do.

I’d love to hear other legal opinions on this topic if any of you on the board are attorneys. Especially attorneys that specialize in Estate planning issues.

I don’t pretend to know the ins and outs on this topic as I certainly do not. When I was doing due diligence on it, even friends that are lawyers told me they don’t know anything at all about estate or asset protection and to talk to an attorney that specialized in asset protection so that is what I did. But of course I’d love to hear other lawyers points of views on it.

Thanks.

[earlyretirement]

[quote=Fearful]Not sure if these are legitimate issues, but it seems to me:

– If the LLC owns real estate in California and is doing anything with that real estate (e.g. renting it to you) it is conducting business in California.

– If the LLC owns the real estate and lets you live in it rent free, it is not an arms length relationship.

– If the LLC exists for the purpose of protecting personal assets (i.e. has no or little business other than letting its owner live for free in the real estate it owns), then the courts might not provide protection of the company’s assets from the owner’s liabilities. The company is set up for little purpose other than acting as a shield, so the company’s function in that regard can be ignored. See “piercing the corporate veil”.

– Finally, I know well about companies being created to shield the owner’s assets from liability for the company’s actions, but not the other way around. If you own a company, and creditors come after you, the company (and its assets) are part of the pool of assets the creditors come after. The only thing I can think of is you hold a minority interest in the LLC, and so the majority’s interests are protected. So you have, say, 20% ownership of the LLC, which means you have 20% ownership of the house via the LLC … why not just give 80% of the house to someone else in the first place?

The whole thing sounds implausible to me, but I am no authority. Please, if you get an expert opinion on this, I would love to hear it.[/quote]

Hi Fearful,

Thanks for taking the time to comment. I did in fact talk to two lawyers that specialize in this in California and they both told me that you do NOT need to set up or report this or pay the $800 franchise tax fee to California. After I heard it one time I got a second opinion and he said the same thing.

Both did say that in essence the LLC would be “renting” the property to myself and he had the paperwork/contracts for this.

I realize any legal structure obviously isn’t perfect but I figure it’s best to do what is sound and to protect yourself the best that you can. Anyone can tell you that there isn’t a perfect system but it’s best to take the best steps so that is what I’m attempting to do.

I’d love to hear other legal opinions on this topic if any of you on the board are attorneys. Especially attorneys that specialize in Estate planning issues.

I don’t pretend to know the ins and outs on this topic as I certainly do not. When I was doing due diligence on it, even friends that are lawyers told me they don’t know anything at all about estate or asset protection and to talk to an attorney that specialized in asset protection so that is what I did. But of course I’d love to hear other lawyers points of views on it.

Thanks.

[earlyretirement]

[quote=Fearful]Not sure if these are legitimate issues, but it seems to me:

– If the LLC owns real estate in California and is doing anything with that real estate (e.g. renting it to you) it is conducting business in California.

– If the LLC owns the real estate and lets you live in it rent free, it is not an arms length relationship.

– If the LLC exists for the purpose of protecting personal assets (i.e. has no or little business other than letting its owner live for free in the real estate it owns), then the courts might not provide protection of the company’s assets from the owner’s liabilities. The company is set up for little purpose other than acting as a shield, so the company’s function in that regard can be ignored. See “piercing the corporate veil”.

– Finally, I know well about companies being created to shield the owner’s assets from liability for the company’s actions, but not the other way around. If you own a company, and creditors come after you, the company (and its assets) are part of the pool of assets the creditors come after. The only thing I can think of is you hold a minority interest in the LLC, and so the majority’s interests are protected. So you have, say, 20% ownership of the LLC, which means you have 20% ownership of the house via the LLC … why not just give 80% of the house to someone else in the first place?

The whole thing sounds implausible to me, but I am no authority. Please, if you get an expert opinion on this, I would love to hear it.[/quote]

Hi Fearful,

Thanks for taking the time to comment. I did in fact talk to two lawyers that specialize in this in California and they both told me that you do NOT need to set up or report this or pay the $800 franchise tax fee to California. After I heard it one time I got a second opinion and he said the same thing.

Both did say that in essence the LLC would be “renting” the property to myself and he had the paperwork/contracts for this.

I realize any legal structure obviously isn’t perfect but I figure it’s best to do what is sound and to protect yourself the best that you can. Anyone can tell you that there isn’t a perfect system but it’s best to take the best steps so that is what I’m attempting to do.

I’d love to hear other legal opinions on this topic if any of you on the board are attorneys. Especially attorneys that specialize in Estate planning issues.

I don’t pretend to know the ins and outs on this topic as I certainly do not. When I was doing due diligence on it, even friends that are lawyers told me they don’t know anything at all about estate or asset protection and to talk to an attorney that specialized in asset protection so that is what I did. But of course I’d love to hear other lawyers points of views on it.

Thanks.

[Author]

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