I'm not too sure how already having insurance affects it but when we used equity from Property A to get a 100% loan for property B then sold property A we had to bring the loan down on property b to 80%. If you already have insurance on the total amount of the loan for both then I don't see why it would affect it as all you are doing is bringing your total loan down but I've never held mortgage insurance so have no ideas of the technicalities.