Tax Sale Insurance During Redemption Period

[Nick Morello]

Hi all. Let's assume you have won a tax sale auction and now you have to wait until the redemption period expires before you can take ownership of the property. What happens if a flood or fire occurs to the property during the redemption period? How can you proect/insure your interest? Does anyone know if there is insurance available and/or who providers might be? Thanks

[Ned Carey]

My partners and I have just started looking into this. For small liens in the past we just included that as a risk factor. However now we have some more expensive liens and feel it is worth looking into.

I inspect virtually every property I bid on. The tax sale was in May and one of our liens has had a fire since then. Given the neighborhood it might be one we just walk away from.

So far no luck finding an insurer. If anyone else know I would love to hear.

[Geof Greeneisen]

In Michigan there is no redemption period if you purchase a property at tax sale. The day you bid is the day you own. However we have a 6 month redemption period when purchasing at sheriff sale and yes get it insured! I have been insuring with Foremost who will insure my equity interest through the redemption period.

I'm not sure you can file an affidavit of insurance expense like you can when paying taxes. If you pay taxes during the redemption period and file an affidavit for the payment it adds the payment to the redemption expense. I don't think you can do that for insurance.

[Nick Morello]

Thanks Geof. I will call Foremost tomorrow. Is there a special name for this type of policy?

[Steve Babiak]

I insure the properties. In Pennsylvania, we are tax deed, so a deed is issued, but it is typically delayed (legal process takes time). Even when there is a redemption period, a deed is issued and recorded, that would then be re-recorded to the previous owner upon redemption. So I insure when I win the bid.

[Steve Babiak]

I get my coverage from Affinity Group; there are some posts here already with that info, and they have a few staff members who are also BP members.

[Marc Rosefort]

Steve, I've searched the forums and can't find the posts you were referring to. Can you point me to any of them if you don't mind?

[Jay Hinrichs]

@Nick Morello  I have a proctor account were I put all of my builders risk stuff... zurich has this product as well.... you just e mail them and address and boom your insured.. they charge by the month.. I like it a lot of my vendors move the inventory in 30 to 90 days so we are only paying sometimes as low at 90 to 150 for insurance per home.

Now if your going to keep it a full year or more this is not always the most cost effective.. but it works for a quick and dirty solution.

I used Foremost over the years for my MHParks that I owned.. they insruaed the crappy trailers in said parks LOL

[Jimmy Pritchard]

Quote from @Nick Morello:

Hi all. Let's assume you have won a tax sale auction and now you have to wait until the redemption period expires before you can take ownership of the property. What happens if a flood or fire occurs to the property during the redemption period? How can you proect/insure your interest? Does anyone know if there is insurance available and/or who providers might be? Thanks

Nick did you ever find an Insurer? I'm in South Carolina and have the same question.  Any help would be appreciated
Jimmy