In that time, my mortgage company saw the lapse, and spent $4000 on hazard insurance, something I just had to eat.

So what you want to do is create a bona fide loan under 166 in case it becomes a bad debt loss you can take as a short-term capital loss in the year it becomes worthless.Depending on the amount you may want to make sure that you have evidence of attempt to enforce the obligation on lapse of payment.You want things like:Evidence of indebtedness (written or printed)Interest rate consistent with risk-profileCollateralPayment ScheduleHistory of PaymentEnforcement efforts evidence on non paymentAbility to lend and repayConsistent treatment across tax formsRemove any evidence of there being payment subject to conditions.

If you don't have too much of a lapse in employment you will be able to secure a loan relatively easy.  

The time-lapse only goes through 2020, but there was a lot of development in 2021 and 2022.

Lapsing fire insurance is one of those things that causes me a bit of anxiety at times. 

Once a life insurance policy achieves MEC status, then even loans are taxable.Further, if you don't keep the policy healthy and it lapses with a loan pending then the loan becomes a surrender/disbursement and there could be taxes due at that time.

Conversely, owners who hold property in cash and let their insurance lapse are stuck with the bill for all damages incurred.

The avalanche of new government programs, new tax laws and rules, new reporting requirements, government (lack of) processing and responding, ever-changing technology including adapting to all-remote work - all of that creates an enormous strain on our already thinly spread resources, often resulting in longer delays and lapses in service.

I could always buy, fix, then refinance ASAP to buy the partner out, maybe with terms saying I will owe 1 year of interest even if I can repay the loan before a year's time as lapsed.

We are seeing a lot of companies pull back from what they were writing, reducing # of policies in areas, and not being flexible on cancellations or lapses.