Voiding Title Insurance by Titling Property in LLC After Closing?

[Account Closed]

Hey there BP Legal Community. I recently closed on a SFH, am under contract on two others, and am looking forward to buying 3 more before year's end. Aside from adequate Landlord/Liability/Umbrella Insurance, I am also working to title each property in an LLC all it's own for added asset protection. Luckily for me the cost to do this are very low given the state I am invested in (Louisiana). I thought I knew all there was to know on how to properly execute this strategy (i.e. no co-mingling of monies, 'due on sale' clause, etc) but at closing, I was informed by my title company that doing this will invalidate my title insurance as it only covers myself, not the LLC. first, is this true and second, if so, is there anyway around this?

[Tom Gimer]

Is the original, individual buyer the sole Member of the LLC? Is this a Zero consideration ($0) transfer? If so, the LLC would meet the definition of "the Insured" under the standard ALTA owners policy... per the below

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(d) “Insured": The Insured named in Schedule A.

(i) the term "Insured" also includes

(A) successors to the Title of the Insured by operation of law as distinguished from purchase, including heirs, devisees, survivors, personal representatives, or next of kin;

(B) successors to an Insured by dissolution, merger, consolidation, distribution, or reorganization;

(C) successors to an Insured by its conversion to another kind of Entity;

(D) a grantee of an Insured under a deed delivered without payment of actual valuable consideration conveying the Title

(1) if the stock, shares, memberships, or other equity interests of the grantee are wholly-owned by the named Insured,

(2) if the grantee wholly owns the named Insured,

(3) if the grantee is wholly-owned by an affiliated Entity of the named Insured, provided the affiliated Entity and the named Insured are both wholly-owned by the same person or Entity, or

(4) if the grantee is a trustee or beneficiary of a trust created by a written instrument established by the Insured named in Schedule A for estate planning purposes.

(ii) with regard to (A), (B), (C), and (D) reserving, however, all rights and defenses as to any successor that the Company would have had against any predecessor Insured.