Land Trust Insurance 1-877-MattLocke (628-8562)

Dilemma

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Many Land Trust educators today are teaching on a issue that is causing the insurance industry to cringe. Agents will be bearing the brunt when the claims occur so if your agent is “doing” what is described below, take a moment and get a copy of the Agent’s Errors and Omissions policy… You may need it.

The Dilemma is simple… Insurance companies want to KNOW who they are insuring and Investors want to hide. As we tackle this Dilemma, let’s start with this example:

Insurance companies and Mortgage companies have worked hand-in-hand for years. Mortgage companies provide money, buyers provide payment, and Insurance companies insure the structure for both the interest of the Insured and the mortgage company mortgagee position. The mortgage company has been known to sell it’s interest to others from time to time. The anticipation of a mortgagee change has resulted in both industries adopting a term called: ATIMA (As Their Interests May Appear). The key to this arrangement is that the Insurance industry and Mortgage company know that and “coverage” afforded the mortgage company is only for the “loss payee” and NOT for “liability” coverage.

Now let’s get back to the Dilemma. The debate over the use of a land trust is never questioned for its intended purpose: A landtrust is an Inexpensive tool to remove a owner’s name from the Deed. Penetrating a Land Trust is debatable. We believe that the Land Trust is a façade that can be brought down.

Question: When the façade is removed, who is covered by the “liability coverage” of the policy.

Land Trust trainers are suggesting and outlining the use of the term: “ATIMA” (as their interests may appear) when adding the Trust name as An Additional Insured.

Example of an Additional Insured: XYZ Land Trust, John Smith Trustee, and the beneficiaries as their names may appear.

Insurance companies need to know WHO they are insuring. The use of ATIMA is traditional in the “mortgagee” language but ATIMA as it relates to those INSURED on the policy is a problem.

We have solutions that still position the owner to “hide” and extend the liability coverage correctly to the beneficiaries. Give us a Call.

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