The mortgage I got on my house is about $150,000.
The bank that gave me the mortgage made me get insurance for $320,000.
Why do they do that? Shouldn't they only be concerned with getting their $150,000?
Why would they care if I get $320,000 if the house was a total loss (like from a fire or tornado)?
Yes, my insurance gives the whole amount if it's a total loss, with no obligation to rebuild.
But I just wonder, why would the bank require me to have a much higher insurance policy than what we owe them?
Added (1). No, you are all not understand this.
My insurance company was fine insuring it for the amount I requested, but then the bank that holds my mortgage told me them and me that I had to insure it for a higher amount.
The point is, if they get their $150,000 back for the mortgage, shouldn't that be all they are concerned about?
Why would they want me to get more money?
Read more: My bank made me insure my house (they hold the mortgage on it) for double what the mortgage is. I'm wondering why they do that?
