Mortgage company unreasonable about homeowners insurance requirements.?

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?


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