Will Lenders Accept ACV Policy for a Home?

[Insurance303]

Will lenders/ mortgage companies generally accept a policy that has an ACV settlement option when it comes to providing a loan?

Thanks,

 

[djs]

Some will, some won't.
Is there enough coverage to protect their interest? That is usually what they want to know.

I doubt most ACV policies will cover the exposure to the lender, so unless its a small mortgage, then the answer to the question will usually be NO, but not necessarily because its ACV.

Dan

 

[Accelerated]

Some will, some won't.
Is there enough coverage to protect their interest? That is usually what they want to know.

The above is correct, in all aspects. A wise lender would make sure that the amount of the mortgage is insured, but they are not all wise. I have run across total losses in the past that had three times the policy limits in mortgages.

The homeowners themselves, however, would be unwise to try to save a couple of hundred dollars a year by skimping on their insurance, especially when they have a mortgage. I have seen many people lose their savings as a direct result of such skimping. If the home does burn down, the homeowner is still on the hook for the balance of the mortgage, regardless of whether they had inadequate insurance coverage.