Can a bank require more flood insurance than the mortgage is worth ...

I have a 50k equity line of credit. I only owe 17k on it TOTAL. I have flood insurance for 50k but the bank is wanting me to up it to 105K. this would increase my premium to 2500 a year instead of the 650. i am paying now. is this appropriate? can I contest it somehow? Any ideas?

it's been awhile since I've dealt with flood insurance, but I believe the most the banks can make you insure to is 250k. now, my guess with this situation is that it's not what you owe on your heloc, but what your home is worth. if the bank had an appraisal completed on your property and it's worth 105k, then you may have to have flood insurance worth that much. I believe your heloc closing paperwork has a section stating as such. i would see if you have such paperwork, if not, I would inquire as to what basis the banks is making this claim and go from there, but if the bank has a solid basis for the rise, you may have to either pay off the lien entirely or up your flood insurance, good luck

Beverly is incorrect. I work a customer service center that supplies flood insurance and the way that works is based upon your loan contract. Which there are 2 ways that i see a lender require flood. the #1 is that it has to met andor be 80% of your homeowners. also they would make your flood ins match the replacement cost of your home. this is to insure there end of the deal.

No- it's not their concern as long as their loan amount is covered. 50k should be fine-they cannot require you to insure over their loan amount.

Can a bank require more flood insurance than the mortgage is worth?

Source: http://www.insurance4noobs.com/can-a-bank-require-more-flood-insurance-than-the-mortgage-is-worth/

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