Homeowners Insurance question

[staytogether]

We have our homeowners insurance paid by our mortgage company right now. If we aren't making our house payment, how do I keep my house insured when the payment is due again?

The reason why I'm asking is we are shopping around for a better car insurance rate, and all the companies want to bundle insurance for the house in with the auto so that we will get a better rate. We are one month late on the house payment, but are wondering if we switch the homeowners insurance too, will it actually get paid if we aren't making our house payment?

[BassBoy]

You don't have to bundle the insurance. If you're letting the house go (surrender in BK), then I wouldn't take any new policies at this time. In any case, normally, you're escrow account (usually the closing costs) when you opened the loan will take care of the taxes and insurance for 6 months to one year.

When you fall behind on the mortgage and the home will go to foreclosure, the lender will take out their own policy to protect their interests if the excrow account has been depleted. The costs is included with the total debt owed when you file BK and is not your responsibility.

[staytogether]

Ch. 7 discharged in March, we just recently accepted the fact that we couldn't afford the house anymore. Our ins. on the house gets paid annually in September. We stopped paying on the house in July.

I keep reading in other posts that we should keep up the insurance on the house just in case something happens. So do I just keep the policy with our current insurance company and wait to see what happens? I am thinking that the Sept. payment won't get made because there probably isn't enough in the Escrow account to cover it.

I appreciate any information you can give me. I'm a little concerned about how to handle this. After reading about another poster's house burning down, I want to make sure the house is insured. Foreclosures are taking a long time in our area and we are planning to move from here in the next 3-4 months.