I own a condo, and I asked my mortgage company how much condo insurance I am required to hold as a provision of my mortgage. They stated that I must have enough to pay off the mortgage balance. This is COMPLETELY unreasonable. The condo association has insurance to rebuild the exterior (which was documented at loan closing), and a great deal of the condo value is the land. It would only take about 1/3 of the mortgage balance to fully rebuild the parts of the condo I am responsible for. If I carried that much insurance, the insurance company would never pay it anyway, even in a total loss. Do I have any recourse for negotiating with my mortgage lender to allow me to carry less insurance? --_Adam

Many Mortgage companies try this. I have found that when you actually sit down and go over a scenario with them, they sometimes wise up. Tell them that other companies take into acount the coverage of the master policy PLUS the land value. (if the building burns down, the land is still worth the same amount...) Your policy should only cover the replacement cost of the "drywall in" plus and additions or alterations you make.