 Posted: Fri Feb 03, 2012 3:48 pm Post subject: |
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| Consent of the policy holder is not a guiding factor or an essential criterion when the mortgage company takes a decision to raise the coverage. This is in fact, primarily done in order to protect the owner, because ordinarily, the insurance and mortgage companies are at a better position to assess the rising risk factors as compared to the insurance holder. |
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Heller
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| Posted: Thu Feb 09, 2012 9:40 am Post subject: |
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Yes, the policyholder must give consent to increase coverage. But if the policyholder does not consent, the mortgage company can take out its own insurance on your home to cover the required amount, which will be very expensive, and the cost will be included with your mortgage payments.
Depending on your state laws, mortgage companies usually cannot compel you to insure for more than the cost to rebuild the home.
The mortgage loan may be for $300,000, but if it does not cost more than $250,000 to rebuild, 250k of insurance coverage should be okay.
Mortgage companies get concerned when insurance is less than the loan amount, so if they are requiring more coverage than you need, discuss it with them and your insurance company.
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Robert742
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