Florida+mortgage
Can my mortgage lender force me to increase my property insurance?
Live in Florida
Mortgage balance is 224,000
replacement cost for my dwelling is 170,000
Property worth 300,000 including land
Yes and no.
If you can’t talk them into accepting the replacement value of your dwelling amount, they can put “forced placement” coverage on your property, and add it to the mortgage payment, and foreclose the house if you don’t pay it.
But if you have an agent worth anything, they can attack this and get the mortgage company to agree to accept 100% replacement value. Here’s what they need to do: 1. don’t talk to the first person who answers the phone – talk to the supervisor. The first person doesn’t have the power (or the knowledge) to handle it. 2. make sure your “replacement valuation” is accurate. Get an estimate from a contractor in your area, of what it would cost to rebuild your home. I’d guess about $130 per square foot. 3. Be sure your insurer is confident that your valuation is accurate. Be SURE your policy includes “guaranteed replacement cost” on the dwelling, along with “Ordinance or Law” coverage which should cover INCREASED COSTS to rebuild not just what was there, but what you need to be up to current code. 4. Get your original appraisal, which should break out the value of the land vs. the value of the house. Make sure your mortgage company isn’t trying to insure land value.
Again, your agent is used to dealing with people like this, and should be doing this for you.
Florida Mortgages – Countryside International
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