REPO homes and burn out

This home was purchased 2 years ago, repo home. Insurance company stated  the owners needed 150,000 dollars worth of insurance on this property and it was replacement. After the home was appraised, it was appraised at  120,000.  Question, you say, me to.THIS HAD TO BE A MISTAKES SAID THE OWNERS. Well no it wasn't"t they stated that the owners didn't pay that for the home.. They stated they would pay the full amount when the house was build back, question u say , again me to .  So just remember read your policy well and no your insurance agent,