Insurance on Abandoned property...

[RichardL]

During my BK7, my trustee seized a rental home that I owned as an asset. After a year on the market, he has now officially abandoned it and turned it over to the bank (it was never offered back to me, and even if he did, I wouldn't want it back at this point).

At the current time, the bank has yet to take action, but I'm sure they will soon. The title is still in my name and the mortgage has yet to be addressed and no taxes have been paid in 2 years. My BK has been discharged for 18 months. Given the above, should I continue to carry property insurance for liability coverage? State Farm dropped me (per their policy) when the trustee evicted the tenants and the house became empty, but encouraged me to continue to carry insurance through another firm for my own protection (the agent has been good to me over the years). But now that the property has been abandoned, at what point can I drop coverage all together and be done with it?

Thanks!!
Rich


Thanks!!
Rich

[goodyphilips]

Are you sure after you have filed for your BK7 and it has come to effect, do you still have any obligations left? I do not think so.

[daylate]

The problem is the liability for lawsuits in case someone (even a trespasser) gets hurt on your property.

[RichardL]

Right. The issue is liability on the premises. If someone gets hurts, am I potentially liable? I'm getting the impression the answer is "yes". Although if the property burned down, it would financially make no difference to me as I'm not responsible for the structure. Seems quirky, but that's what I'm starting to understand. The real annoyance here is that I have no control over the disposal of the property and completely at the whim of the trustee and the bank, so I either continue to pay for the insurance or take my chances. Anybody think differently?

[StrawberrySu]

Right. The issue is liability on the premises. If someone gets hurts, am I potentially liable? I'm getting the impression the answer is "yes". Although if the property burned down, it would financially make no difference to me as I'm not responsible for the structure. Seems quirky, but that's what I'm starting to understand. The real annoyance here is that I have no control over the disposal of the property and completely at the whim of the trustee and the bank, so I either continue to pay for the insurance or take my chances. Anybody think differently?

C'mon now, Richard, don't you care about the safety and welfare of the guys ripping out your copper pipes? Lol. It does seem completely unfair we have to cover an abandoned property and can't even claim it as an expense on our Schedule J, doesn't it? That's what I have been told here. When I put my rental properties up for short sale the realtor said to keep someone in the property to prevent it being broken into if empty. She guaranteed it would happen within a few weeks of them being vacant, and this is in a small, higher end bedroom community of a larger city.

[frogger]

You might want to an insurance agent about an "umbrella" liability policy for yourself.

[StrawberrySu]

You might want to an insurance agent about an "umbrella" liability policy for yourself.

Frogger, I asked my agent today about an umbrella policy. She said it needs an underlying policy as it is "extra" insurance after the main policy is used up. I was hoping to cancel my homeowner/landlord policies for my home/rentals and just have like a $1 million liability to cover everything (surely something won't happen to each one all on the same day). Maybe I need to find a new agent?

[RichardL]

Good thought! I checked into just that option. However, my insurance company (and none I could find) would cover the property via an umbrella policy without the structure first being covered through a traditional policy.

[frogger]

I posted this on another thread, but check into a "builders" policy. They might call it builders risk.