What happens if I have lender placed hazard insurance on my property?
I have received a notice from Bank of America that our previous homeowner’s insurance has expired. I am unable to renew this policy as the property is now a rental property. I have called around to get quotes on a new homeowner’s policy to which I have recieved quotes triple ($ 1200/yr) that of the lender-placed insurance ($ 400/yr). We do not live in the home, so the contents do not need to be covered. The lender-placed insurance is for the amount of our mortgage. Why would I get rid of the lender-placed insurance. A few additional things:
-The property is a manufactured home (the insurance world calls it a single wide)
-It is currently rented by my mother-in-law
-We never plan to move back into the home
-The market value for the home is equal to or less than the lender placed insurance
If the home catches fire or any other loss, Will hazard insurance pay off my loan? I do know that the lender-placed insurance is being added to our monthly payment.
I am assuming that the issue lies in if someone is injured on the property, etc???? Thanks