Even With a Foreclosure, You Have Options

Reverse-mortgage lenders have no objection to borrowers placing title to their homes into their living trusts after the reverse mortgage is recorded.

By placing the home title into your husband's living trust, probate costs and delays will be avoided if he dies first.

Equally important, if your husband should become incapacitated, such as with Alzheimer's disease or a severe stroke, as the successor trustee you can then manage the living-trust assets, including selling or refinancing of the house.

DEAR BOB: Thank you for writing about umbrella insurance policies some time ago. Until I read your article, I had been carrying $1 million liability coverage on my house and three rental properties and $5 million on my automobile policies. My insurance agent advised the high liability coverage because of my high net worth. When I clipped your article and faxed it to my insurance agent, he said I could reduce the liability coverage on each property and my automobiles to $300,000 each, and obtain a $5 million liability umbrella policy for slightly lower total premiums. Your advice more than paid for a lifetime subscription to the newspaper.

-- Carl W.

DEAR CARL: An umbrella liability policy is an insurance policy that takes over coverage on large liability losses exceeding the basic insurance policy coverage. It is best to have all your property liability policies with the same insurer so there is no conflict between insurance companies.

To illustrate, suppose you are at fault in a bad automobile accident that injures or kills several people. Your basic auto policy will pay the first $300,000 of liability coverage. Then your umbrella policy will take over and pay any additional liability losses up to $5 million total.

If you think you need additional liability coverage above $5 million, the additional premium for a few million dollars more will be only several hundred dollars.

DEAR BOB: You recently said a tenant should have renter's insurance to pay for damage to his apartment. The reader left a dinner on the stove, and the fire did about $15,000 damage to her apartment. It has always been my understanding that renter's insurance simply covers the tenant's personal belongings, such as clothing and furniture. But the owner is responsible for the apartment house or detached rented house. Am I wrong?

-- Beverly B.

DEAR BEVERLY: If a tenant has a renter's insurance policy, it covers loss due to theft and fire affecting the tenant's personal property. But it also provides liability coverage for the tenant's negligence.

For example, if I visit a friend's apartment, trip over a loose rug and am injured, the tenant's rental insurance policy will pay for my injuries due to the tenant's negligence. The same renter's policy also provides liability coverage if the tenant's negligence causes damage to the landlord's premises, up to the policy limit.