I don't understand the following statemnt:
The amount of insurance must be the lesser of the value of the improvements (total estimated cost new) obtained from the cost approach section of the appraisal, or the loan amount. If the loan amount is the lesser value, the minimum coverage required would then be the greatest of 80% of the improvements or the loan amount. Full replacement coverage on the property structures is acceptable if it not limited by policy amount or other conditions.
I looked in the cost approach section of the appraisal and it was blank and siad the info was unavailable. What does this mean? And can you please translate this paragraph into English? Thanks
Your lender is telling you that the house has to be insured for at least 80% of its replacement cost or 80% of the loan amount, whichever is greater. Most insurance companies are phasing out these partial coverage policies, luckily. You have to have insurance as part of your loan, I'm thinking this is just their requirements. I would recommend having 100% on the dwelling and actual replacement cost on the contents, and not worry about the statement anymore.
I think it says insurance must be less then the value of the cost of improvements (are you improving home?)
In a nut shell they say they will cover your 80% money and don't care of 20%.
But, they will charge you for the whole 100%.