Best Practice for Sub2 Insurance?

[Curtis H.]

Hello all, 

I have a home I bought Sub2 that I will be getting a policy on tomorrow, but have a couple questions before I pull the trigger. I should mention I am actually living in the property as my primary residence, not renting this one out.

1) When I request to put the previous owner as an additional insured since his name is still on the mortgage, and they ask why, what is the right answer? Insurance agent said they will probably ask why, and ask for address of the previous owner too. I don't know if I should give them that. 

2) The agent also said she can choose not to manually send something to the mortgage company, but thinks the company automatically sends something basic to the mortgagee. Is this a problem as it will trigger the bank to investigate why a new policy is written, and of course the old policy cancelled?

3) If the BANK starts asking questions, what would be the normal "investor" response? Or at that point it is what it is since they will discover title has changed to my name and there is nothing I can hide? 

I have full Power of Attorney with the bank, and I paid to bring the loan current so I am on file all over the place there and have a decent relationship with them. Still though...I brought the loan current and the home prices have gone up about 60K since that happened. So they may have incentive to call the loan due and HOPE to get the house back at this point. Don't know.