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Wayne Said:

Does my mortgage company allow me to insure my house with more added features & coverage ?

We Answered:

The only insurance your lender might require is private mortgage insurance, which is insurance against the possibility that you will default on your loan. It has nothing to do with insuring your home against damage. When you insure the home, you want to insure it for the cost of rebuilding it exactly as it is today. This figure could be significantly less than the market value of your home. In some cases, if you have made significant upgrades and remodeling, the replacement cost could exceed the market value, especially in a “down” market. To get the right amount of insurance, contact an insurance broker. A broker works with several companies, and can find the best policy and terms for you. To find a broker in your area, log on to a website like http://www.homeownerswiz.com and fill out a form requesting a free quote.

Naomi Said:

Insurance Coverage Question?

We Answered:

You need to look into an umbrella policy. These are high limit (one million + up to multiple millions) liability policies, meant to pick up where your homeowner's and auto policies leave off. They require certain underlying limits of coverage (your limits are common and work for many umbrellas, I've seen some that require a bit higher.
An umbrella policy is usually relatively inexpensive because very few claims ever exceed those underlying limits of coverage, the vast majority never even come close.
This is probably a smart, affordable alternative to increasing your auto insurance.
Call your agent or company.

Leslie Said:

I have replacement cost coverage on my homeowner insurance but should I be paying for the lot it is built on?

We Answered:

In my years as an insurance agent I came across this situation many times. It is a particularly a problem where you have lakefront property with a cottage. Often the cottage is very small and of simple construction and the lot is, by far, the most significant part of the purchase price. In these cases I worked with the loan officer to satisfy their requirement for the proper replacement cost insurance so that the cottage was insured without wasting significant premiums insuring land.

That being said when you purchase your insurance you want to insure the replacement cost of your home not just the mortgage amount. The calculated replacement cost (not including the lot) will often be higher than the amount you chose to finance.