Lenders Can’t Require Limits Greater Than Home Replacement Cost
The question comes into the Geek CaveTM often enough that I thought it would be worth posting a reminder here. In New York and Connecticut, the law prohibits lenders from requiring home mortgage borrowers to buy dwelling insurance limits that are greater than the home's replacement cost. Your Resident Insurance GeekTM has not had to answer this question since ... yesterday.Here is chapter and verse. First, New York Banking Regulations Section 38.9 states:No mortgage banker or exempt organization shall require any mortgagor, in connection with the granting of a mortgage loan, to obtain a hazard insurance policy in excess of the replacement cost of the improvements…