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

Question

I am going to buy house for me. Mortgage company charge me the insurance amount from me and take insurance policy for my house. But it may cover less risk which we are seeking to cover in my policy like water damage etc.

Answer 1

your question is a little confusing.  when you purchase a home, YOU take out an insurance policy with the company YOU want to.  they cannot tell you who to carry your policy through.  sometimes they set up a policy for you at closing if you have not done so.  find out who your policy is through and then find out exactly what coverages you have.  if you dont like it, shop around and take out your own and cancel the one they got for you.  you can carry any coverage you deem necessary as long as the home itself is covered for your loan amount.

Answer 2

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.

Answer 3

Are they offering Mortgage Life insurance (if you die or get sick, they pay out the mortgage) or is it more like property insurance (if your house burns down, they rebuild it)?

If it is mortgage life insurance, avoid it like the plague!  It is a shady product and is seldom regulated by the insurance industries.  An individual term policy (life, criticall illness or disibility) is a far better option!