Home Liability Insurance Only Questions

[Billssuck]

Hi!

I stopped paying on my mortgages both with BOA in April. I have heard nothing from them but I did get a notice of my new insurance bill renewal (paid through escrow) and it is almost double what it was last year. Apparently they ran a credit check and upped it. The new insurance starts July 1 and I do not know if BOA will pay it or not and if I should or should not be looking into paying for liability only insurance on the house. Also, does anyone have any good recommendations for companies that do this type of insurance for homes going into foreclosure? Also, what are the cost in proportion to original home insurance?

Right now I'm thinking to wait until I find out if BOA pays it or not or if they will try to bill me for the extra amount (my escrow balance isn't big enough for that size of insurance bill).

Any advice is appreciated!

[BCA2009]

For liability only check into a umbrella policy. Make sure you have all of the details and understand what it covers, but generally covers liablity from lawsuits like "slip and fall" accidents. Most large insuance companies sell these policies. Depending on the company minimum coverage is from 500K to 1M. Rates can be as low as $300 a year. They might be higher for people like us with bad credit (just guessing), but still much lower than homeowners ins.

[catleg]

They won't sell you an umbrella liability policy without high liability limit homeowners and auto policies. It's meant to augment not replace the basic coverage.

On the other hand I believe your mortgage servicer will continue to pay the insurance premiums and taxes even when escrow is exhausted, and then has first claim for reimbursement out of the proceeds of the sale of the property.

[Billssuck]

Thanks for the input. Catleg...I was hoping that others thought that BOA would pay the insurance and taxes. I hope that's the reality in my case too...Catleg have you been through a foreclosure yet yourself?

[Flamingo]

Pull out your settlement papers on your home; you should have a copy of your mortgage and Note and escrow paperwork. Also pull out your house insurance policy. You will find the answers to your specific questions. If you default on your mortgage payments, there is no guarantee the bank will do/pay for anything. The best thing for you to do is to contact your insurance carrier and speak directly with them as to your situation so you don't make any mistakes.

[catleg]

No, I haven't had the displeasure, but I'm an avid reader of economics blogs.

Here's where I read about mortgage servicing rights & responsibilities: Calculated Risk blog

[cantwait]

ours was paid by BOA but I think we had the money in escrow. However, the insurance company is terminating the insurance because it is a vacant property, so they refunded us $300, but as of Aug 4 it will not be insured