Commercial title insurance is something that we’ve talked about on the blog with regular frequency, and while it is not required during a commercial acquisition, it is highly recommended for a number of reasons. Commercial title insurance is a one-time fee that you pay to protect your financial interests in the event of unexpected issues or disputes about a property. Many of these potential issues are not caused by the property owner, so commercial title insurance can protect you from someone else’s mess that has now become your problem after inheriting or purchasing a property.
Because it’s such a valuable thing to have, many property owners are curious if they can transfer their title insurance policy to a loved one or friend if there are changes with the property. You can’t typically transfer a commercial title insurance policy, but there may be ways to ensure your loved ones are protected if they ever take over the property in your absence. Below, we talk a little bit more about transferring a commercial title insurance policy.
Transferring A Commercial Title Insurance Policy
Since you are the named individual on a commercial title insurance policy, you can’t really just transfer that protection to another party if you wish to sell your commercial property. As nice as that would be, the new buyer will have to find their own commercial title insurance coverage. So while you can’t exactly transfer this insurance coverage to another individual, there are ways that you may be able to keep this coverage in place so that your spouse or your kids are protected in the event that you pass away.
We can’t speak for every single type of commercial title insurance policy, but in many cases you are allowed to add your spouse or a dependent onto an existing title insurance policy. This does not transfer to them if you gift or sell them the property, so you’re not going to be able to find a loophole in this lifetime. If you move on from a property while you’re alive, whether it is a sale or a gift to a relative, you won’t be able to transfer that insurance policy to the new owner.
However, we hope that it brings you peace of mind knowing that if you were to pass away that anyone named on that commercial title insurance policy would likely retain those insurance protections on that property after you are gone. Title insurance typically continues for any surviving spouses or legal beneficiaries of the property, and again this coverage would cease to exist if those parties eventually gift or sell the property.
Again, we can’t speak for every title insurance policy ever created, so don’t just assume a policy will cover your wife or your kids after you’re gone, and know that they’ll likely have to get their own policy if you gift or sell the property to them. For clarification about your specific policy, or to talk to a commercial title company who can ensure your interests and the interests of your family are protected when dealing with commercial property, reach out to the team at Commercial Partners today at (612) 337-2470.