I know when I refinanced my townhouse, part of the paperwork was providing a copy of the insurance, which included the replacement cost.  So, it seems like a normal part of doing business.  The 50% increase doesn't suprise me, since real estate prices seem like they're up about that much in the last 5-6 years as well.  If the house burns down, the insurance company has to know how much it will cost to rebuild and replace it.  Same thing with this. Seems straight forward enough to me. 

The Torch