forced increased home owners insurance

I have had a 1st mortgage for $429,000 (interest only) w/Everhome Mortgage for over 6 years now - they "bought" it from Provident Savings Bank in 2006. At the time of signing the Provident paperwork it was required to carry $206,000 worth of property hazard insurance on my home. It has always been an impound account whereby I pay my taxes and home owners insurance through my escrow payments. I have attempted 3 times in the last 3 years to get my loan adjusted due to a divorce and loss of income but to no avail and without a satisfactory reason of denial. So today, 6 years later since they've had the loan I receive a letter that states an Everhome requirement is that "the property be insured to full value with replacement coverage preferable". Therefore I must now increase the coverage or provide that verification replacement coverage is guaranteed. Isn't that a change in the terms of the loan contract and is considered illegal?

My current property coverage is $256,000 Dwelling, $51,200 for Structure, $192,000 for personal property and $128,000 for loss of use w/$300,000 for personal liability. I pay extra for extended replacement costs and building code upgrade coverage......isn't that enough?
My home value is down to about $385,000 including the land (comps in area)

I just feel that mortgage companies are finding any way they can to get your home and especially if they know you're already struggling.