Lender asking for more flood insurance premium after closing

[Sandy Sawyer]

I received an email a week after closing, title company's 3rd request for funding from my lender. But lender wants me to send another $2,000 to increase flood policy from covering my mortgage amount to one covering full replacement value. (It's never flooded.) Can they play with people's lives like this and get away with it? I would have paid cash for the house had I factored in this additional cost. What can happen if I don't pay it?