2007-01-29 06:57:08 · 7 answers · asked by Anonymous in Business & Finance ➔ Insurance
No. Your homeowners insurance will pay out the value of the policy. So, if you have a mortgage of $100,000 and you only have insurance for $80,000 -- the insurance will pay you $80,000.
Your best bet is to make sure that your insurance will pay out the full replacement value of the house. That still may not pay your full mortgage (because your mortgage will include the full cost of the property and that includes the land, which the insurance does not pay for in the case of a lost house.)
2007-01-29 07:53:36 · answer #1 · answered by MoniqueLise 3 · 2⤊ 0⤋
Gads - let's get this straight. Homeowners insurance is not mortgage insurance. Homeowners insurance will pay to repair/rebuild your house if damaged by a covered peril. House gets damaged -- contractor gets hired to do the repair. You just keep paying your mortgage. It has nothing to do with homeowners insurance. "Mortgage insurance" is a life insurance policy, basically. You might buy a policy on your life that equals the value of your mortgage so that your spouse, in the event of your death, could pay off the mortgage and not have to worry about having a roof of their head (due to the loss of you and your income). There is more to say on this topic but you get the gist...
2007-01-31 09:19:30 · answer #2 · answered by LesElle 3 · 0⤊ 0⤋
It only pays up to the face value of the policy - so if the house is insured for more than the mortgage, less demolition costs, the answer is yes, if the house is "lost" to a covered peril.
2007-01-29 20:29:17 · answer #3 · answered by Anonymous 7 · 0⤊ 0⤋
NO...it covers replacement of your home. Ask the folks in San Diego that lost their homes in the fire...they are still paying on their mortgages...
Be sure to update your policy regularly as well....building costs are constantly going up and your homeowners should reflect those escalating costs...
2007-01-29 15:47:53 · answer #4 · answered by City 2 · 0⤊ 0⤋
That depends entirely on your policy. Strictly, most people structure the insurance so that their benefit would cover the cost of the mortgage. The two aren't directly tied, so the insurance company would pay you, and you would pay off the mortgage.
2007-01-29 15:00:12 · answer #5 · answered by tony1athome 5 · 0⤊ 2⤋
If your house is mortgage, yes it is! Simple.
2007-01-29 15:16:43 · answer #6 · answered by john a 2 · 0⤊ 1⤋
It probably does.
2007-02-01 14:30:12 · answer #7 · answered by Samantha Thompson 3 · 0⤊ 0⤋