If y house is being forclosed on, do I still need to pay for homeowners insurance?

7 Comments

1. Jay S says:

   February 28, 2009 at 8:09 am

   Good question. I don’t think so. The insurance is protection against loss of YOUR property. If the property is getting ready to not be yours, then let the whoever owns it buy their own insurance.
2. Bandit says:

   March 2, 2009 at 5:56 pm

   Keep the coverage until you are evicted or move. Then if the place gets struck by a strange bolt of lightning, you have coverage. Protect yourself, you never know what will happen between the landlord and lender.
   Sorry, thought you were a tenant. As an owner you need to keep coverage for liability until your name is removed from the deed.
3. "sexy Liano" says:

   March 3, 2009 at 3:06 pm

   no absolutly not stop now.
4. car253 says:

   March 6, 2009 at 2:14 am

   I had this question yesterday. The customer called their attorney and called me back and said to keep the insurance on because they were concerned about liability. She will keep the insurance until the home is no longer hers.
5. mrgetdownsyndrome says:

   March 9, 2009 at 2:26 pm

   If you’re looking to save money and don’t perceive much risk, ditch the insurance. Until title to your property passes to another, you are gambling somewhat, because you might potentially still need the insurance.

   I know when times have been tough for me – it was bye-bye insurance and step cautiously. Insurance is paying for piece of mind, but it’s best to spend your dollar on having something that is worth insuring first.
6. mbrcatz says:

   March 10, 2009 at 10:25 am

   Yes, until the property actually passes out of your hands.

   If you don’t, the bank WILL put forced placement coverage on the property, and that cost will be added to the rest of the balance and foreclosure costs.

   If you don’t have it, and there’s a fire loss before the sale, then obviously the property will bring much, much less than the pre-loss sale would have brought.

   Obviously, you can still be sued for any injuries that happen at that location.

   After the sale to the new owner, you are still responsible for any balance on the account, so keeping your own insurance means that you have coverage if there’s a fire that lowers the sale price, or protects you against a lawsuit. Even if the mortgage company puts forced placement coverage on the property, they can still come after YOU for the full loan balance, plus foreclosure fees, and forced placement coverage fees.

   You’re mitigating your loss, by keeping insurance on the property. The day the title passes from you to the bank, though, you cancel the coverage.
7. CAROLYN W says:

   March 10, 2009 at 7:54 pm

   I have met similiar problem before, here is the information that I feel helpful..