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JoshStark: Point taken. The way insurance is purchased is wrong. The bank owns most of your home and is the beneficiary of insurance you pay for. However, no one is forced to borrow from a bank, and a bank has a right to impose any conditions on borrowing is pleases, A more equitable system would be for the premiums to be split at the same ratio of ownership of property. As a borrower pays down his debt and his percentage of actual ownership increases so does his share of premium. This would encourage the banks(more powerful) to press for rates more in line with cost of replacement, while not letting the homeowner abdicate his responsibility of maintaining the asset.

I am however very happy that the federal government (our tax money) is getting out of the property insurance business. If I buy a bright red mustang GT I pay a much higher insurance premium than for say a pick up truck. So it should be that if I buy a home on the waterfront, I should be prepared to pay an insurance premium much higher than someone inland. BTW, it is actually nice to see a coherent discussion on this board rather than the normal bs.