Paying home insurance while you live "mortgage free"?

[jlynn275]

It's me again, the new girl with loads of questions!

Situation: Not reaffirming home, but telling them we intend to pay (trying for loan mod...) to stay in house as long as possible.
Mortgage payment includes insurance/taxes
How do we continue paying the insurance if we stop paying the mortgage?
Is there a way to separate and just pay the insurance?

[tobee43]

afternoon jly! nice to see you back.

we only paid until we vacated our premises and only after we rec'd our foreclosure summons.

some feel compelled to pay it until the house is finished with foreclosure. which could take years at this point depending on where you are.

[AngelinaCatHub]

Certainly the bank has an insurance company name and no doubt the account number. Contact the company and make sure that they will notify you if the bank stops paying. Otherwise, let the bank pay as long as possible. I'm one who believes in keeping it insured until your name is off the Deed. Living in the house is good for you and the bank as you being there protects it from transient and damages. 'Hub

[tobee43]

Certainly the bank has an insurance company name and no doubt the account number. Contact the company and make sure that they will notify you if the bank stops paying. Otherwise, let the bank pay as long as possible. I'm one who believes in keeping it insured until your name is off the Deed. Living in the house is good for you and the bank as you being there protects it from transient and damages. 'Hub

i also believe while your IN the house you must be covered, however, depending on where you live the homeowners insurance, once they find out you have left the premised will no longer insure you.

once you have surrendered the house, the lender, or bank needs to take responsibility. in the state our property is located, one cannot even or is not allowed to have the insurance so the situation becomes moot. and although, there once again be differences of opinions about this situation, a bank, can stop foreclosure and not take your name off the deed for years. in our state the insurance and maintenance are included with the foreclosure fees and costs.

[tcreegan]

Hi jlynn,

Check with the insurance company, often when homeowners insurance is paid out of escrow it is for 6 months or a year. The insurance might be paid through the end of the year or if you are lucky until middle of next year.

Find out when the premium comes due next and check right before that to see if it was paid out of escrow. In our mortgage company the right hand does not know what the left hand is doing and they paid for insurance for almost a whole year before they figured it out nothing was going into the escrow acct.

Tom in Colo

[Flamingo]

As long as your name is on the deed to the property the property is your responsibility as to insurance protection. There is no way around this. If you vacate the property and a neighborhood kid slips and falls on the property, a bank or real estate agent slips on something left on the floor in side the house, etc., etc., etc., you are responsible as you name is on the deed and you can be sued within the limit of the statute of limitations for filing personal injury lawsuit against you for that injury. Two years in our state. It's all up to you and how you can handle the risk. Definately speak to your insurance agent about the situation and/or your BK attorney if you are filing BK.

[tobee43]

As long as your name is on the deed to the property the property is your responsibility as to insurance protection. There is no way around this. If you vacate the property and a neighborhood kid slips and falls on the property, a bank or real estate agent slips on something left on the floor in side the house, etc., etc., etc., you are responsible as you name is on the deed and you can be sued within the limit of the statute of limitations for filing personal injury lawsuit against you for that injury. Two years in our state. It's all up to you and how you can handle the risk. Definately speak to your insurance agent about the situation and/or your BK attorney if you are filing BK.

i think your statement in relation to

Two years in our state

may be why some are reluctant to continue coverage while other must stop...(actually because their state does not allow vacated...or "surrendered" houses to be covered by the previous owners. as you, i'm certain know, there has been much discussion on this issue. one, thing i have omitted from most of my posts while disgusting this topic, is, not only were we told not to continue insurance coverage after we vacated by attys...but also the insurance company explained clearly the process, we cannot keep coverage on the property that is vacated and no longer owner occupied.

can you explain what happens after the two years has past in florida? what then? just for the clarification for the OP...being that her property is in florida.

[Flamingo]

i think your statement in relation to may be why some are reluctant to continue coverage while other must stop...(actually because their state does not allow vacated...or "surrendered" houses to be covered by the previous owners. as you, i'm certain know, there has been much discussion on this issue. one, thing i have omitted from most of my posts while disgusting this topic, is, not only were we told not to continue insurance coverage after we vacated by attys...but also the insurance company explained clearly the process, we cannot keep coverage on the property that is vacated and no longer owner occupied.

can you explain what happens after the two years has past in florida? what then? just for the clarification for the OP...being that her property is in florida.

When one is in foreclosure and stops paying the insurance on the house and wants to vacate, it is absolutely a necessity for them to check with their insurance carrier/representative and also their BK attorney if they are filing as to what to do in their situation/state as to house insurance. A statute of limitations for a personal injury runs for a period of time after the injury takes place and the Complaint must be filed before that times runs out. If someone stops the insurance on their house after they vacate and they have not done their homework as to whether or not they should actually stop those payments and their name is still on the deed (property not yet in the banks name), and someone's kid trips on a sidewalk crack or over a piece of wood in the yard, you are the owner at the time of the injury and can get sued up to whenever that statute of limitations expires. Anyone in a foreclosure situation is under risk as to this scenario unless they properly investigate and protect themselves by thoroughly doing their homework instead of just surmising.

[tobee43]

When one is in foreclosure and stops paying the insurance on the house and wants to vacate, it is absolutely a necessity for them to check with their insurance carrier/representative and also their BK attorney if they are filing as to what to do in their situation/state as to house insurance. A statute of limitations for a personal injury runs for a period of time after the injury takes place and the Complaint must be filed before that times runs out. If someone stops the insurance on their house after they vacate and they have not done their homework as to whether or not they should actually stop those payments and their name is still on the deed (property not yet in the banks name), and someone's kid trips on a sidewalk crack or over a piece of wood in the yard, you are the owner at the time of the injury and can get sued up to whenever that statute of limitations expires. Anyone in a foreclosure situation is under risk as to this scenario unless they properly investigate and protect themselves by thoroughly doing their homework instead of just surmising.

i have gone around this issue to the point of nauseaium in other threads....

you are absolutely correct, in as much as no one can "surmise" what is correct in this situation for them and the area in which they live.

and i so agree, one MUST do their homework and get good atty advise as well. personally, i promised myself (HA) i would NOT discuss this issue again. however, i MUST continue to stand firm on our own personal position...which is...in the state our property is located, the insurance company will NOT cover a home that is NOT owner occupied during the foreclosure procedure. in this particular state, those fees and cost...(i.e. maintenance, taxes and insurance with the exception of HOA fees) are assumed with the cost and fees associated with foreclosure. i have also mentioned before that the state our property is in, is one of the ONLY states in this country that has NO CAP fees and costs on foreclosures and those fees and costs have been known to reach in excess of 50k-100k...they are tacked on along with any deficiency acquired and placed on the property in the form of liens, which become passed on through transfer of ownership process.

this may very well be one states way of handling the situation, however, i still am wanting to see some REAL "case" law as to an actual case where a home in foreclosure or foreclosed and back in the lenders hands via surrendering found the ex-owners responsible for any liability. ( and NOT me...LOL!! i know my position and feel fine about it...)

[jlynn275]

ok, so the answer is "depends on your state/county"? I did bring this up during the initial consult with attorney and she it would be silly to keep paying the insurance...I guess I'll call my insurance company when it comes to that and find out the specifics!

[debee]

Once you leave the property, but before the foreclosure sale, the kind of insurance you want to look into is "personal liability". It is what would protect YOU if you were sued by someone hurt on the property. The house would then be the bank's problem.

[tobee43]

ok, so the answer is "depends on your state/county"? I did bring this up during the initial consult with attorney and she it would be silly to keep paying the insurance...I guess I'll call my insurance company when it comes to that and find out the specifics!

yes, it's an excellent idea.

also...if you possibly can...check with a bank rep from you mortgage company.

the state we have the property there is what is called a "blanket' insurance co which covers all forelcosed properties owned by that bank in our state. actually, mortgage providers will have 'blanket' contingency insurance policies which continue to protect the property in this very instance where there is no longer a policyhoder on foreclosure.

each state can go after either goes after the banks if the property is left on it's on...in most cases you find a clause mortgage agreement that has made provisions if this situation arises...on my mortgage agreement it's written as plain as the nose on your face. BUT that does not necessarily mean it is in the body of YOUR personal mortgage....

in truth, maybe in the "old "days this was not the situation, but now most all banks have master property and liability policies for foreclosures/repose. although the homeowner would be technically responsible for the property and liability until title transfer, they are probably not in a position to make a payment and the policy would cancel for non-payment. at that point, the bank would be responsible by virtue of their interest in the property (at least in California - deep pockets). It has been my experience that a bank would not take over payments, but would place their own coverage (which I believe is written into most of the contracts).

neighbor associations, towns, cities...are begin to really get angry with the lenders ...the banks for NOT taking care of these properties as has been in the headlined news for the path months. these areas now have high rates of crime and are getting run to the ground.

even when looking for a place here...i can't tell you...most all in foreclosure...some had cement poured down the toilets...others had damage so terrible..one actually had the entire kitchen ripped out along with the air conditioning unit...ripped right out!!

as flamingo states you MUST check with your atty...have them go over your agreement with the bank and also find our the way your state handles the situation as well.

[tobee43]

also jly...we just started a "group" for florida filers on the bkforum here ...just because it's so crazy here...it's like one hand doesn't know what the other's doing...so come and join us...just for the pains and gains of bk in florida!! ...and just so we can cry on each other's shoulders!!!

[CCsAreEvil]

neighbor associations, towns, cities...are begin to really get angry with the lenders ...the banks for NOT taking care of these properties as has been in the headlined news for the path months. these areas now have high rates of crime and are getting run to the ground.

even when looking for a place here...i can't tell you...most all in foreclosure...some had cement poured down the toilets...others had damage so terrible..one actually had the entire kitchen ripped out along with the air conditioning unit...ripped right out!!

I didn't know things were getting this crazy. I think it's mostly vandalism (not the people who left in most cases?). I was talking with a friend and also read online that some lenders are now asking people to stay in the homes until a new owner moves in to prevent vandalism. In some cases, they are paying people to stay instead of having people rent back. Who would have thought?

[debee]

The lender placed policy will cover the lender's interest (the house) in the case of vandalism and fire. Their policy will not name the homeowner in case of a slip&fall case, or something similar.

Someone getting hurt on the property is a "liability law" issue. It's not a bankruptcy issue or a foreclosure issue. it's a separate area of law and the only thing that matters is if you are on title (aka: the homeowner). In Florida, for instance, the homeowner is responsible if someone gets hurt on the property. Same with California.

Slip and Fall accidents are categorized as a type of personal injury, which is covered by Tort Law. There are generally four types of “fall down” accidents: 1) Slip and Fall accidents, in which the shoe loses traction with the floor; 2) Trip and Fall accidents, where there’s a foreign object in the pathway; 3) Stump and fall accidents, where there’s an impediment in the walking surface; and 4) Step and Fall accidents, where there’s an unexpected failure or hole in the walking surface.

When these types of accidents occur on someone elses property as a result of a dangerous or hazardous condition and causes injury, the owner of the premises may be liable. This type of liability is referred to as premises liability.

In order to recover in a slip and fall case, the injured party must show that the owner acted negligently, did not exercise reasonable care, or had constructive notice of the hazard. Constructive notice, in tort law, means that although the owner did not have actual notice or knowledge of the unsafe condition, he or she reasonably should have known about it. Typical defenses to Slip and Fall accident claims are the denial of negligence or claiming that the injured party was at fault, and that any reasonable person, exercising due diligence for his or her own safety would have seen the hazard and avoided it.


Having said all that, it's just a personal choice in terms of risk. Do you want to take the risk or not?

But make no mistake: as long as your name is on title, if you let liability insurance lapse, you're taking one.