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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?
Wiki User
∙ 13y ago
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.
Wiki User
∙ 13y ago
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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.
What is the structure of mortgage insurance business?
Corporate Structure
Can a mortgage company require that you have coverage greater than the replacement value of the dwelling?
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.
Is there homeloan term insurance?
It's called Mortgage Insurance, but it does not provide coverage for your home.
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.
What is the structure of mortgage insurance business?
Corporate Structure
Can a mortgage company require that you have coverage greater than the replacement value of the dwelling?
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.
Is there homeloan term insurance?
It's called Mortgage Insurance, but it does not provide coverage for your home.
Can you buy the amount of homeowner insurance you want?
Insured Property ValuationIn the united States there are two valuations that can be used to purchase your homeowners insurance coverage. ACV (Actual Cash Value) or RC (Replacement Value). If you are wanting to insure just the amount you we on a finance or mortgage note, That would be called mortgage insurance, not homeowners insurance..
Is it better to have life insurance coverage or decreasing mortgage coverage?
This depends upon your individual circumstances. Different people have different insurance needs.
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.
Is Mortgage Protection Life Insurance a good idea?
Mortgage Protection Life Insurance is a good idea if you want to protect your mortgage. It pays the outstanding balance of your mortgage if the mortgagor (insured person) dies. Mortgage protection life insurance coverage is usually in the form of decreasing term insurance, with the amount of coverage decreasing as the outstanding mortgage debt decreases. Usually, the proceeds of the mortgage protection life insurance are paid to the beneficiary, which is the mortgage company holding the mortgage loan. Some people choose instead to buy level term life insurance in the amount of the mortgage, and the benefits are paid to the insured's beneficiary (family member), who in turn can use the proceeds for any reason, including to pay the mortgage.
Mortgage is in your name spouse dies will mortgage life insurance pay off house?
If the mortgage is in your name it would not be affected by the death of your spouse. Mortgage life insurance is coverage that is taken out so that your house would be paid for in the event of your death.
How can you have MMI insurance cancelled on a FHA fixed rate mortgage?
On FHA there is no cancellation on the MMI insurance. It is life of loan coverage.
What is force place coverage insurance?
Forced placed insurance coverage is insurance that is put on your property without your control because you either don't have the insurance you are required to carry or the mortgage company has not received a satisfactory copy of the insurance declaration page. You are responsible for paying for this coverage as they add it to you mortgage account balance. The forced placed coverage on covers the balance of the money owed on your mortgage and does not cover anything else like your contents are not covered, liability is not covered, etc. Only the banks interest is covered and the price is extremely high especially when you consider what they are actually covering.
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.
