Letter from Chase Bank, LLC name can't be on insurance

[Jim Tiernan]

Anybody else have this happen? I bought a rental in my name, then transferred title from my name into my LLC and also changed the name on the insurance to my LLC. I received a letter from Chase saying "the name on the insurance policy doesn't match the name on our records or your loan documents. We may not be able to accept the policy information as proof of insurance coverage for your loan until this discrepancy is resolved."

Further down "if our records are correct, contact your insurance company to update your policy and send a revised copy".

Also "if we don't receive updated information by May 20th, 2015, we may purchase an insurance policy on your behalf and charge your escrow account for the premium. This policy is likely to be significantly more expensive than a policy you would purchase, provide less coverage for your home and may increase your monthly mortgage payment."

 Is this a way for Chase to discourage the use of LLCs?

If I put the insurance back in my name, I still leave the title in the name of the LLC?

Or do I have to change title back to my name too? And if so what's the point of having an LLC?

Thanks,

Jim

[Eric Black]

Hi Jim,

Yes, this is a very common occurrence and one that is often not mentioned by those who push getting an LLC for all of your rental properties. Many banks require the name on the insurance policy to match that of the name on the mortgage, regardless of who's name is on the title.

They're not discouraging LLC's, they're covering their own butts just like you're trying to cover yours.

Do some more searching on BP to see what others have done and recommend.

Cheers.

Eric