Lender Requirement: 100% replacement Cost policy on a reno proper

5 Replies

Hi, I need help finding an insurance agent who will issue a 100% replacement cost home insurance policy.  I bought this property and then decided to renovate the whole house so it is currently under construction and obviously vacant.  Due to this, I can't get a policy issued that meets the lender's requirement.  Without this, the mortgage company will not move forward towards closing.  Can anyone help with recommendations or my options as to what I need to do so that I can pull the money out of this property?

I am refinancing it to get the cash out.

If you're currently in the middle of a rehab you need a builder's risk policy.  Regular landlord insurance may not be available if the house is going to be under construction for more than a few weeks.  You're at a bad point in the process to be doing a refi.

Yes, you are correct Jon but I wasn't aware of this requirement by the lender till the very end.  Is it possible to get  a (DP3)100% replacement cost policy while the property is under construction and vacant?  Do insurers provide it?  I was informed by my current agent that she has not seen this in her 20 years of being in this business.  

Two words: Builders Risk insurance, nothing else.

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