Insurance Question

[slidingfast]

We have been notified by our lender that we have 30 days to pay back payments or they will begin the foreclosure process. I would like to know what needs to be done about homeowners insurance. We just received a bill from our insurance company(non-escrowed) and there is no way in the world we can make the premium payment. What happens if we don't make the payment and the policy is cancelled?

[B12]

Keep up the homeowner's insurance while the house is in your name. If the premium is paid in arrears, you need to pay the whole premium. Most policies are not, so call your insurance company and ask to be switched to a monthly payment until title is out of your name. A moot point, but it is a good idea to escrow insurance payments and taxes into your monthly payment to avoid these problems. The PITI payment (principle, interest, taxes and insurance) is the only way to go if you are not good with budgeting.

In what state do you live? Our property taxes, homeowners insurance and flood insurance is killing us in Florida.

[Minnymouth]

Slidingfast,
As long as the home is in your name you are responsible for the insurance. Pay on a monthly basis if you have too, to make sure you cover yourself.

If something happened to the home and you with no insurance on it during the BK process, you would be liable for the damages or debt....

So cover your bases..... protect yourself.

[Boscoe]

But what if you really do NOT have the money? If the bank is going to foreclose, wouldn't they do what they threaten to do and to put in place their own insurance and tack the costs on to the total bill?

Seems to me, while the borrower's name is on the house, the bank as "soon to be owner" in foreclosure would have a stake in making sure the house did not burn down, no one drowned in a pool, etc.

[slidingfast]

...and that is my dilemna. I really don't have the money to pay any insurance payments. We are not in a good situation, scraping by. So does the lender make sure that there is a policy in place once they start the process of foreclosure?

[wingnut]

Structure only..

Hey,

Eventually the mortgage holder will get "structure-only" insurance. The cost of the insurance will be added to the other fees you are liable for during a foreclosure.

If you are eligible for Ch 7, most of this would probably disappear.

If you aren't worried about burglaries or personal injury lawsuits, and can't afford the extra bill anyway, don't worry about it. You'll owe money for the policy. Just hope that nobody gets a reason to sue you for injuries / etc.

Good luck. I AM NOT AN ATTORNEY