Should I Pay for Earthquake Policy Renewal?

[helpme2010]

I was discharged a couple weeks ago and will be letting my house go when the mortgage company decides to foreclose on me. I have an earthquake policy renewal notice (which isn't due until the middle of February).

When it's time to renew, do I need to do this or is the risk with the mortgage company now? Or do I have to wait until the mortgage company starts foreclosure proceedings or officially takes my name off the title???

[Flamingo]

Your house is your responsibility as long as it is in your name and your name on the deed. In a unique situation as to earthquake insurance, I would contact your carrer/agent directly and discuss the situation. If you plan on staying in the house and an earthquake hits and your insurance lapsed, you've got a problem and probably no coverage at all for your personal items/furniture, etc.

[helpme2010]

Your house is your responsibility as long as it is in your name and your name on the deed. In a unique situation as to earthquake insurance, I would contact your carrer/agent directly and discuss the situation. If you plan on staying in the house and an earthquake hits and your insurance lapsed, you've got a problem and probably no coverage at all for your personal items/furniture, etc.

Thank you Flamingo and I hope you had a great holiday. Is my name on the deed until the actual courthouse auction date? And if the house doesn't sell on this auction date, I assume it transfers back to the mortgage company and this would be the time I no longer have to pay for earthquake insurance?

[HHM]

As with any insurance, whether you should maintain it is a question of your risk tolerance. How comfortable are you with the risks of not being insured?

As to a future BK and foreclosure, a breach of contract is a breach of contract. So not maintaining earthquake insurance is not going to compound your problems vis-a-vis the bank. (Is the earthquake insurance "required" as part of your mortgage note)?

To cover yourself, you send a certified letter to your lender (try to find the appropriate address for such correspondence, the payment address would probably be the wrong place to send it) letting them know that you are not going to maintain earthquake insurance, that way they are on notice.

[helpme2010]

I get the risk thing. Since I am in California, there is some risk of earthquake damage. If it damaged my personal property, it wouldn't be that much, but the earthquake policy would cover hotel stays, etc. so it could be useful. I would be more worried if my mortgage company tried to sue me if an earthquake happened.

Regarding HHM's idea of sending a certified letter to the lender, I like this idea, except I want to stay in the house as long as possible and would be afraid of bringing my loan up to their attention and them possibly wanting to take quicker action since they see me not protecting the home. So I am fine with paying the bill if it keeps me off their minds a little longer.

I still have over a month before I have to mail in the bill. If I see a foreclosure process moving forward, then I am tempted not to pay the bill and sending the certified letter to them. I know there is that game where you can tell them "hey, i'm taking care of the house for you, making improvements, keeping it safe, so letting me stay here longer is in your best interest"

[HHM]

Honestly, I don't think it would matter if you sent the letter. If you haven't been making payments, you are somewhere in the default/loss mitigation anyway. Not renewing earthquake insurance and notifying your lender of that fact is not going to speed up the process.

You should check to see if the insurance is mandatory. If not, then no reason to keep it. If it is, it is your choice

[helpme2010]

HHM, thanks for taking the time to respond. I will look over my policy to see. I am guessing since I am in a heavy earthquake area of California, that earthquake insurance is mandatory.