{"id":191267,"date":"2014-11-17T06:43:21","date_gmt":"2014-11-17T13:43:21","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=191267"},"modified":"2014-11-12T14:43:54","modified_gmt":"2014-11-12T21:43:54","slug":"insurance-coverage-after-foreclosure","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/insurance-coverage-after-foreclosure\/","title":{"rendered":"Insurance Coverage after Foreclosure?"},"content":{"rendered":"<p>Shane Smith | Property Insurance Coverage Blog | November 9, 2014<\/p>\n<p>In August, the U.S. Court of Appeals addressed whether a homeowners\u2019 property insurance policy was rendered void after the insureds lost the home in foreclosure, yet continued to reside in the home and suffered a loss.1<\/p>\n<p>Fred and Debbie Baptist purchased their property insurance policy in October 2006. In November 2008, they lost their home to foreclosure, however they did not notify their insurer and continued to occupy the home. On December 9, 2011, the bank which foreclosed on the home obtained a judgment evicting the insureds from the home. The insureds had to vacate the home by January 13, 2012, however the home was damaged by a fire on December 27 and 28, 2011. The insureds made a claim with their insurer for contents coverage for the December 2011 fire and during the insurer\u2019s investigation it discovered that the insureds no longer owned the property. The insureds had renewed their policy twice (for the 2009-2010 and 2010-2011 policy periods) and sent checks for the premium to the insurer. It is also interesting to note that the fire claim was not the only loss the insureds suffered. They also filed post-foreclosure claims for wind and hail damage in April 2010, and for an unrelated fire in May 2010.<\/p>\n<p>The insurer filed suit in the U.S. District Court for the Northern District of Mississippi, seeking a declaratory judgment that the policies it issued after the foreclosure were void because the insureds had no insurable interest in the property. The insurer also made a claim to recover payments it made on the insured\u2019s claims in 2010 and 2011. On a summary judgment motion, the insurer argued that the insureds made a material misrepresentation by failing to inform the insurer of the foreclosure sale. The district court agreed and held that the insureds had no \u201cinsurable interest\u201d in the property because they did not have a right to renew the policy after they lost ownership and the renewed policy was void ab initio. The Fifth Circuit Court of Appeals affirmed the district court\u2019s judgment and stated:<\/p>\n<p>Although the parties devote much of their briefing to whether the Baptists maintained an insurable interest in the property sufficient to sustain their policy\u2019s effectiveness after the foreclosure, we need not address this issue to conclude that the district court\u2019s judgment must be affirmed. Our de novo review [footnote omitted] satisfies us that the district court\u2019s ultimate conclusion was correct because, even assuming arguendo that the Baptists maintained an insurable interest sufficient to sustain their policy\u2014in their personal property, contemplated as \u201ccontents,\u201d for example\u2014their renewals of their policy constituted their affirmations to Nationwide of their initial application for insurance, material portions of which were no longer true. The Baptists\u2019 application reflects that the home would be owner occupied, and includes both the Baptists\u2019 declaration that the facts stated on the application are true and their request that Nationwide issue \u201cthe insurance and any renewals thereof in reliance thereon.\u201d By renewing their homeowner\u2019s policy when they no longer owned their home, the Baptists made a misstatement of material fact that entitled Nationwide to rescind the policy. [footnote omitted] Accordingly, the judgment of the district court is AFFIRMED. (Emphasis added).<\/p>\n<p>1 Nationwide Mut. Ins. Co. v. Baptist, No. 13-60726, 2014 WL 3882888 (5th Cir. Aug. 7, 2014).<\/p>\n<p>via <a href=\"http:\/\/www.propertyinsurancecoveragelaw.com\/2014\/11\/articles\/insurance\/insurance-coverage-after-foreclosure\/index.html\">Insurance Coverage after Foreclosure? : Property Insurance Coverage Law Blog<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Shane Smith | Property Insurance Coverage Blog | November 9, 2014 In August, the U.S. Court of Appeals addressed whether a homeowners\u2019 property insurance policy was rendered void after the insureds lost the home in foreclosure, yet continued to reside in the home and suffered a loss.1 Fred and Debbie Baptist purchased their property insurance&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/insurance-coverage-after-foreclosure\/\">Continue reading <span class=\"screen-reader-text\">Insurance Coverage after Foreclosure?<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[3],"tags":[5625,3,23],"class_list":["post-191267","post","type-post","status-publish","format-standard","hentry","category-insurance-claims","tag-foreclosure","tag-insurance-claims","tag-insurance-coverage","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Insurance Coverage after Foreclosure? 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