Escrow & Title
In Missouri, a 'co-insurance' provision in a property insurance policy may affect a real estate owner who:
AInsures with multiple companies
BInsures the property for less than the required percentage of its replacement cost and files a partial loss claim✓ Correct
CHas multiple mortgages
DOwns property in multiple states
Explanation
Co-insurance requires Missouri property owners to insure their property for at least a specified percentage (typically 80%) of replacement cost. If underinsured and a partial loss occurs, the owner may only receive a partial settlement proportional to the coverage-to-value ratio.
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Key Terms to Know
Title Insurance
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Math Concepts
State-Specific Concepts
Continuing Education
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