Over-insurance issue strikes a chord

I am a mortgage broker and deal with insurance/lender issues on a regular occasion. Your piece [“Over-insured by a Mile,” April 24] was dead-on.

Steve Kahan

Manhattan Beach

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Your article failed to mention an important way in which lenders gauge how much insurance to require. Typically, the lenders should require insurance to cover the “reproduction cost” of the home, less the amount of the site value (land value), which is found in the cost-approach section of an appraisal.

Inexperienced underwriters or funders sometimes ask for the policy to cover the loan amount, which is incorrect, or the home value, which is incorrect.

David Campbell

Newport Beach

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Thank you for the article about homeowner’s insurance over-coverage.

I refinanced my mortgage two years ago and for two years now I have received a letter from my mortgage company expressing “concern” about my apparently low (to them) insurance coverage in relation to the size of my mortgage.

I have called each time and explained about California real estate values, at which they drop the issue. The letters are obviously computer generated, and I asked if they could code my file so I don’t receive these letters every year for the next 30 years.

Kathy Musial

Pasadena

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Most homeowners are underinsured, not over-insured, as they sadly discover when their homes are destroyed by fire or other disasters. In Orange County, the typical cost to rebuild is $200 to $250 per square foot. I doubt very much that Marsha Miller will be successful in finding a licensed contractor to rebuild her home, which must be brought up to current building codes, for $120 a square foot.

Frances Hayward

Laguna Niguel