logco, the simple way to put it, is that 'mortgage insurance' covers the lender, and 'mortgage protection insurance' offers cover to the borrower, obviously, terms and conditions need to be read. It doesn't matter what sort of insurance you are paying for, it's well worth understanding what you are covered for.
Insurers need to become clearer about their terms and conditions. We had a claim years ago for burglary, and the insurer explained they were being nice to us, in paying our claim, as our claim met 'theft' definition but not 'burglary', which we had. Then 'underinsurance' was explained also, as we insured our building but not to the level we should have, which wasn't relevant to the actual claim but the claims manager, in a way, did an audit on our current cover.
Further to 'underinsurance': if your building is worth $500,000 to replace, and you insure for $250,000, you will only get $125,000 in a total levelling, because you only insured 50%. Strange way they work it but since then, we have insured to full value, as per the insurers assessment.
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