Transferred properties with personal note to LLC, need insurance.

[Mike Aschettino]

Hi, 

Have a meeting with my lawyer shortly but hoping to get some advice on the forum in the short-term. 

My wife and I transferred our properties to an LLC we started back in January. We are 50/50 owners of the LLC, there are two properties total in the company.

We both still have personal loans on the properties (she has a loan for one property, I the other). We are very aware of the Due-on-sale clause and the associated risk. 

The issue we are running into is that we realized that neither of our properties are technically insured because the existing policies are written to us personally. When I contacted my insurance company to add the LLC as an additional insured they said that it wasnt possible because the LLC consisted of two owners with multiple properties. Additionally, they said that they can no longer insure me and that I had 10 days to notify them with what action I'd take (Cancel the policy, transfer the property back to my personal name)

My question is this, how do I insure the properties without sending red-flags to my lender considering they pay insurance in an escrow? I think the right thing to do is to get a commercial insurance policy but I doubt there is a way to get the lenders for both houses to split the cost of a commercial property in escrow. At this point I'm thinking about dissolving the LLC and transfering the properties back to our personal names. What a mess!