When getting home insurance are you required to get the amount owed on the loan or only the amount to cover?

This post has 4 comments

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  shiprepairwoman
  April 4th, 2008

  Replacement value because the land will still have some value even after a total disaster like fire.

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  SuperCactus
  April 6th, 2008

  Home owner insurance is BASED on the value of the home, but the policy also covers contents and personal liability, so the price depends on the coverage.

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  glenn
  April 8th, 2008

  You are required by the loan company to protect their interest and that would be the amount of the loan.

  The insurance company normally explains to you that you will need to insurance for the rebuilding of the house plus removal of any debris such as after a fire. Every time I have checked into that it would be a much higher amount than the market value of the house.

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  sprp
  April 9th, 2008

  There are 2 types of insurance involved in this question, first is the insurance on the loan or mortgage, it must be for the full amount you owe and is payable directly to the lendor.
  Secondly, you should also have insurance on the contents of your home, this is payable to you and will allow you to re-purchase the personal property lost.

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