Typical the banks have a bulk insurance on loans that are bank owned homes. Lower priced homes they may self insure. When the loan is in foreclosure there should always be insurance to cover the principle balance, it is call forced place insurance that is very expensive because of the risk of the propety being in foreclosure and vacant. There usually a huge deductiable.

It varies of course. Often once the owner has been removed there is a bare bones policy applied by the lender as vacant homes are touble traps. I have seen situations though, especially with low end homes in rough areas, where no insurance is applied. This is a question where the answer is unique to the situation.

Hank

If the home does not have insurance the lender will IN MOST INSTANCES take out insurance regards to property. Due to liability issues till house sells to another home owner.

Dallas Realtor and Consultant, Mortgage Loan Officer, Lecturer regarding Credit Repair
– Lynn A. Crosby

Unless the bank has taken ownership of the property it is up to the homeowner to insure the property. If the home is a condo or townhome it could have some insurance coverage by the homeowner's association.