In short, lenders only require sufficient homeowners insurance to cover the mortgage amount. Purchasing additional insurance to cover the replacement value of the property is at the discretion of the homeowner. In many cases the mortgage amount includes the majority of the replacement value of a home. Plus, most homeowners decide to purchase sufficient coverage to cover the replacement value of their property so insurance companies assume that is the level of coverage that most people want. Borrowers are only required to purchase enough coverage to cover the amount of their loan, however. If your lender is requiring you to purchase additional insurance you should consider changing lenders. Additionally, your insurance company should work with you to provide the policy and amount of coverage you want.