Liability Insurance?

[laurannm]

So as I stated in an earlier post, we are abandoning our non-reaffirmed house in a couple of weeks. Most of what I am reading indicates that it may be a good idea to keep liability insurance current on the house until foreclosure is complete. Is this correct? If so, for those who went this route, which insurer did you go with? I have read that Foremost and American Modern Insurance offer vacant home insurance. My current insurer does not offer this kind of insurance

Thanks

[LadyInTheRed]

Whether or not you should maintain liability insurance has been an issue of debate. The fact is that as the owner of the property, you can be held liable for damages caused to others because of conditions on your property. What if a tree on your property falls on a car or a neighbor's house? What if a pipe bursts and some how causes flooding on a neighboring property? It may never become an issue. It really is a matter of what you think the level of risk is and what your comfort level is with the risk versus the cost of insurance.

[HHM]

Get vacant property insurance....

It is a question of affordability vs. the potential risk. Can you afford a vacant property policy? If you can, then you need to decide if it is a priority. The odds of something happening are slim, but do you want to live with the worry?

Presumably, if you on this forum, you filed BK, so if something did happen, you don't have BK as an exit for some time.

My risk tolerance is pretty high, the only insurance I would "choose" to have is term life insurance. But the state requires auto insurance and the mortgage lender requires home owners insurance, but for that, I probably wouldn't pay for them.

[laurannm]

Thanks to you both for your responses. I am going to get a few quotes and see how much it is and go from there. My risk tolerance is fairly has as well so I may just roll the dice if it's too much money

[ValleYum]

I priced vacant house insurance (online) trying to plan for our 'departure'. It was higher than my homeowner's policy! It was over $200/month.

I did buy a 1 million dollar umbrella liability policy from our insurance company (USAA). It was ~$189 for a year. It also covers us for libel and slander... I have no idea about that!! LOL. I think my peace of mind is worth about $16/month.

[laurannm]

Wouldn't an umbrella policy also get cancelled once the home was determined to be vacant?

[ValleYum]

Nope. It will just ride on the coat-tails of my auto and renter's policy at that point. If you aren't carrying the max liability on those policies (300k/500k here) you may have to increase those but it was only $18 per 6 months for me to bump that up on my auto policies

[laurannm]

Interesting...so when I go to open up my new auto and renter's policy at my new location (once we move), I could potentially also include an umbrella policy and I would be covered?

[laurannm]

And doesn't the home have to be occupied (i.e. rented out) in order to be covered by an umbrella policy, or does the umbrella policy actually cover a vacant house?

[ValleYum]

I specifically asked and they said that my liability (someone trips and breaks a leg while at my house) would be covered for the vacant house. Vandalism, contents or structure can be covered by a force placed policy enacted by the mortgage company at their expense and/or option.

[laurannm]

Good to know, thanks...I found an insurance agent willing to do the same (i.e. liability only for a vacant house) for $500\year. I hadn't seen this type of policy mentioned anywhere on the boards so I was curious as to why this isn't offered more