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Help me with a hypothetical

Chardee MacDennis · 2019-10-13 13:51:39

If I do not take out property insurance and my mortgaged house burns down. I hand back the keys to the bank and declare bankruptcy. How is the bank protected from this situation? Do they have separate insurance on their investment? Sorry if this is off topic!

13-10-2019 02:51PM

#1

Chardee MacDennis

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If I do not take out property insurance and my mortgaged house burns down.

I hand back the keys to the bank and declare bankruptcy.

How is the bank protected from this situation? Do they have separate insurance on their investment?

Sorry if this is off topic!

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Comments

#2 13-10-2019 04:27PM

coylemj

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Posts: 25410

The bank requires you to have insurance and that the policy is assigned to them. That means that if the house burns down, you can't do a runner with the insurance money.

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