Facing a foreclosure is never a situation that you want to go through. However, unplanned events occur in life that cause these type of situations. If you are facing a foreclosure, it is likely that you will have your homeowner’s insurance policy canceled. In most cases, the payment for your monthly premiums related to your homeowner’s insurance policy would be bundled along with the mortgage payment that you pay each month. If you have stopped making this monthly payment due to a possible foreclosure, your insurance company will likely cancel and void your policy, which will leave you without protection on your home.
Forcing Responsibility
If chances are high that you are going to lose your home, it may be beneficial to have your homeowner’s insurance policy canceled. The quicker this occurs, the faster the mortgage lender will have to take responsibility and make sure that your home is protected. Of course, this is a difficult time as you are losing an important aspect of your life, but the faster you are relieved of financial burdens related to your home, the quicker you can move on from the situation.
Fighting Foreclosure Proceedings
There are times when you may wish to put on a fight and try to stop a foreclosure. If this is the case, you will need to pay off any delinquent balance that is remaining on your loan. In most cases, this is unattainable. However, if you are able to pay off a delinquent balance, you will be required to pay premiums for a homeowner’s insurance policy.
Increase In The Cost Of Homeowner’s Insurance
Depending on how far you are in the process, you may not be able to use your previous insurance provider or you may have to pay a hefty premium to receive coverage. Unfortunately, if you had to cancel your policy due to a foreclosure, your insurance carrier is not going to see you as a good risk and will have to raise the premiums you pay by a significant amount.
Provisional Insurance
If you do decide to go through the process of foreclosure, it is important that you obtain a provisional insurance that will cover any contents that is in your home during the time that it takes for foreclosure proceedings to occur. This type of policy is known as a “home contents” plan. It functions in the same way that renter’s insurance does.
Jim Treebold is a North Carolina based writer. He lives by the mantra of “Learn 1 new thing each day”! Jim loves to write, read, pedal around on his electric bike and dream of big things. Drop him a line if you like his writing, he loves hearing from his readers!