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18

Dec 2016

Can I Cancel My Homeowner Insurance—I’m Moving Out

Posted by / in Weekly Posts /

Can I Cancel the Homeowners Insurance—I’m Moving Out

Are you giving up your house as part of your bankruptcy? If you are, can you cancel the homeowners insurance?

I say, No. You homeowners insurance does two big things. First, it would pay to rebuild your house after a fire. If you’re giving the house back to the bank, maybe you don’t care about that. (Maybe you do.) Second, it protects you against liability for accidents on your property. That’s still important. In fact, if you are moving out it might be even more important.

kid slipping. So don't cancel the homeowners insurance

Your homeowners insurance protects you from liability for accidents on your property. So don’t cancel the homeowners insurance.

Until there’s an actual foreclosure, the property owner—that’s you—can be liable for accidents caused by unsafe conditions on the property. Most obviously something like dangerous ice on your sidewalk. But maybe an abandoned refrigerator. All those dangers are small, but they can add up.

Isn’t the bank the owner once I move out?

No, the bank does not become the owner until there is an actual foreclosure. If you’ve stopped paying and filed bankruptcy, that can be as little as three months, but usually four or five and sometimes much longer.  I explain a little more about that, here. 

So if you are asking me is it safe to cancel the homeowners insurance, when you move out, my answer is, No.

 

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Robert Weed has helped twelve thousand people file bankruptcy in Northern Virginia. Robert Weed is a frequent panelist and speaker at the meetings of the National Association of Consumer Bankruptcy Attorneys. He is one of Northern Virginia’s most experienced personal bankruptcy lawyers. As an expert on changing consumer bankruptcy laws, Robert Weed has been interviewed on local and national TV and quoted in newspapers across the country.

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