MINNEAPOLIS (AP) — More than 200 of the homes damaged in the deadly tornado that hit north Minneapolis were already foreclosed or vacant, making it difficult to determine if the homes are insured.

Many of the mortgages that have gone into foreclosure went to multiple owners, so it’s hard to tell who would be responsible for insurance.

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The Minnesota Department of Commerce requires state-chartered banks to maintain insurance on foreclosed properties. But that doesn’t apply to nationally-chartered banks, and in many cases, it’s unclear whether national lenders who own foreclosed homes have insurance on them.

Mark Kulda, vice president of public affairs for the Insurance Federation of Minnesota, said most of the big lenders don’t.

“I think for the larger lenders who are going through this, the chances of them buying an insurance policy is pretty small,” Kulda told Minnesota Public Radio. “They probably did something to assume the risks on their own. And if that’s the case, there could be many properties in north Minneapolis that are not insured if they were lender-owned and vacant at the same time.”

Rick Sharga, a senior vice president for the foreclosure research firm RealtyTrac, said even if the foreclosed property is insured, that doesn’t mean the lender will pay for the tornado repairs. Lenders will compare the cost of building the homes versus what it would be insured for, he said.

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“It really comes down to an economic decision,” Sharga said. “The more it’s going to cost the lender out of pocket, the less likely they are going to invest money in hopes of recouping something.”

If that’s the case, lenders might walk away from properties, leaving the city to deal with them.

Both Kulda and Sharga agree that solving the insurance question will have to be done on a case-by-case basis.

Nearly six years after Hurricane Katrina destroyed homes in Louisiana, there are still unsettled lawsuits between insurance companies, lenders and municipalities there, Sharga said.

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