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Can a mortgage company require that you have coverage greater than the replacement value of the dwelling?
Wiki User
∙ 17y ago
I doubt it. The Mortgagee (i.e., the mortgage company) has an interest solely in the value of its collateral, which is its financial interest in the property as described in the mortgage documentation. I do not believe that the Mortgagee would possess an "insurable interest" in the property sufficient to compel you, the owner (also called the "mortgagor") to purchase insurance beyond replacement cost coverage. Further, I doubt a carrier would even sell coverage greater than replacement cost.
Wiki User
∙ 17y ago
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Homeowners insurance cancelled what will the mortgage company do?
The mortgage company will force-place coverage for the dwelling for you. Ultimately, you will be paying for it. It will also be A LOT more expensive for you with (generally) less coverage.
Do you have to insure your home for more than the mortgage balance?
To the insurance company, your mortgage balance has no impact on how much insurance coverage you need for your home. Homeowners insurance is based on the replacement/reconstruction cost of your home.
Your mortgage company wants you to insure for the value of the loan but you think insurance should only cover the replacement cost of the structure what is the minimum coverage required?
You have to have it insured for at least the amount of mortgage. That is the mortgage companies "insurance" that it will be paid for if it is totally destroyed.AnswerIf you agreed to insure your house for the amount of the mortgage when you obtained your mortgage then you are bound by that agreement and will have no choice but to comply. Actually, the purpose of homeowner's insurance is not to insure the loan, it's to insure the property. You cannot purchase more than the replacement cost of the house. In the event of a total loss, you will only be paid the cost to replace the house up to the limit shown in the declarations, regardless of what the loan amount is. It is against the law for a mortgage company to require you to secure insurance for the value of the loan. They can be fined.
If your home owners insurance is part of your mortgage payment and you stop paying your mortgage what happens to your insurance coverage?
Once you have defaulted on your mortgage or have gone into foreclosure all your rights on the homeowners policy are null and void. all rights of recovery revert to the Mortgage company. Basically you become uninsured and the mortgage company remains insured through the policy term. Also if the policy gets cancelled due to the foreclosure any refunds belong to the mortgage company.
Does insurance pay house off after house destroyed by fire?
It does if the policy is current and there is adequate coverage. If the property is underinsured the insurance company will not pay for the entire loss. That all relates to the homeowner's insurance.If the mortgage is greater than the value of the property then you will owe the balance after the homeowner's insurance payment unless you have mortgage insurance.It does if the policy is current and there is adequate coverage. If the property is underinsured the insurance company will not pay for the entire loss. That all relates to the homeowner's insurance.If the mortgage is greater than the value of the property then you will owe the balance after the homeowner's insurance payment unless you have mortgage insurance.It does if the policy is current and there is adequate coverage. If the property is underinsured the insurance company will not pay for the entire loss. That all relates to the homeowner's insurance.If the mortgage is greater than the value of the property then you will owe the balance after the homeowner's insurance payment unless you have mortgage insurance.It does if the policy is current and there is adequate coverage. If the property is underinsured the insurance company will not pay for the entire loss. That all relates to the homeowner's insurance.If the mortgage is greater than the value of the property then you will owe the balance after the homeowner's insurance payment unless you have mortgage insurance.
Homeowners insurance cancelled what will the mortgage company do?
The mortgage company will force-place coverage for the dwelling for you. Ultimately, you will be paying for it. It will also be A LOT more expensive for you with (generally) less coverage.
Do you have to insure your home for more than the mortgage balance?
To the insurance company, your mortgage balance has no impact on how much insurance coverage you need for your home. Homeowners insurance is based on the replacement/reconstruction cost of your home.
Is it harder to get a home insured if you have moved out and are now renting the property and can the mortgage company object to doing this and can they forbid renting it out?
No. Be sure you only insure the dwelling and not the contents inside. You should ask your tenants to have renters insurance to cover their personal belongings. Your mortgage company will require that you have adequate coverage but is not concerned with personal belongings inside the home. As far as I know, the mortgage company has no say in who lives in the home.
What is covered in a state farm fire and casualty company dwelling coverage a?
Coverage A on any homeowners policy includes the dwelling itself. This is the home without including the contents. The coverages under a homeowners policy are as follows: Coverage A: Dwelling Coverage B: Other Structures Coverage C: Contents Coverage D: Loss of Use Also provided under most homeowners policies are liability coverage and medical payments to others.
Can you get homeowners full replacement coverage up to a specified amount IE 500000 even if the actual replacement cost is 6500000?
If you can support that your home's true replacement cost is $500,000 instead of $650,000 - which is different from market value OR tax value, your insurance company will probably reduce the amount of coverage at your written request. However, if you owe more than $500,000 your mortgage company may not approve and you may have a bigger problem to deal with. Coordinate with your mortgage company in advance, and ask them to remove the land value from the homeowner's insurance requirement. That said, however, talk with your agent first because some things, like additional living expenses and debris removal - come out of the coverage limit - and you don't want to be underinsured!
Should the limits on a homeowners insurance policy be at least equal to the fair market value of the home being insured?
The dwelling coverage (coverage A) should equal the amount necessary to rebuild your house. Market value has nothing to do with it. However, if your house can be rebuilt for say, $150,000 and you have a $200,000 mortgage your mortgage company may require additional coverage beyond the estimated replacement cost. Remember the market value of your house also includes the dirt it sits on. There is no need to include the value of your dirt in the insurance policy unless required by the mortgage. Or due to a depressed market there might be a house that is only worth $65,000 on the market but would cost $125,000 to rebuild. This happens a lot in small rural communities.
What would be the benefits of opting for individual property insurance coverage?
You would be able to control your coverage instead of letting the mortgage company do it for you. They usually insist on choosing it however.
How do you get total replacement cost on home insurance claim?
It depends on the policy you have with the insurance company. Replacement cost phrasing should include 20% or so over the value of the home. Closely question the agent about the contents--like cabinets, appliances, fixtures and so on should the home become a total loss.
Do homeowner insurance policies typically include flood coverage?
There is no requirement, but your mortgage company may require a certain amount of coverage that both policies will have to match.
Your mortgage company wants you to insure for the value of the loan but you think insurance should only cover the replacement cost of the structure what is the minimum coverage required?
You have to have it insured for at least the amount of mortgage. That is the mortgage companies "insurance" that it will be paid for if it is totally destroyed.AnswerIf you agreed to insure your house for the amount of the mortgage when you obtained your mortgage then you are bound by that agreement and will have no choice but to comply. Actually, the purpose of homeowner's insurance is not to insure the loan, it's to insure the property. You cannot purchase more than the replacement cost of the house. In the event of a total loss, you will only be paid the cost to replace the house up to the limit shown in the declarations, regardless of what the loan amount is. It is against the law for a mortgage company to require you to secure insurance for the value of the loan. They can be fined.
Does homeowners insurance pay off your mortgage if the house is lost?
Homeowners Insurance and Total Loss.It all depends on what type of coverage you have. If you have replacement coverage, The insurance will pay to rebuild your house so your mortgage continues as usual. If you are not rebuilding then it will pay your mortgage within policy limits. So it is important that you have adequate coverage on your policy.If your not rebuilding, the insurance company will generally pay the Mortgage Company first before any remaining money is disbursed to the home buyer. Usually the check is issued with both the buyer and the mortgage company as payees. You must however continue to make your monthly mortgage payment until the insurance settlement comes through. If you miss monthly payments you can wreck your credit just when you need it most.You usually will not need to pay off the mortgage yourself. The check is issued to you and the company. You send it into them, they sign off on it and send it back to you. You then endorse it to pay the contractor to keep building your new home. Meanwhile, you keep paying your mortgage. The mortgagee is only listed on the policy so they are notified if the policy is canceled so they can force place coverage on the policy because they have an insurable interest.You have the OPTION of paying it off and taking out a new mortgage to build a new home with whatever you have left over or whatever you can afford with that new mortgage.
Does mortgage company know the change of the homeowner insurance to landlord insurance?
Your Insurance Company is required by law to provide a copy of insurance policy at renewal time to your mortgage company and to notify them of any endorsements or changes in coverage. They may Notice it if they review your policy.
