Do I need homeowners insurance if I file bankruptcy?

If you file for personal bankruptcy, you should maintain your homeowners insurance until the process is complete. In some bankruptcy filings, you may return the ownership of the house to the bank as part of the overall debt that you are discharging. However, until the title to the house officially transfers, you are still the legal owner of the home and will have some responsibility for any issues involving your home, particularly if someone is injured on the property. This is why it’s a good idea to continue holding homeowners insurance, even if you file for bankruptcy, because the personal liability portion of the homeowners insurance policy will continue to protect you during the bankruptcy process for anything that occurs on the property.

After the bankruptcy process has been completed, you will need to notify your insurance company to change your policy to suit your new living situation.


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