Is the mortgage company asking for full replacement cost coverage on the home? That tends to make things harder. However, there are still options.
@Preston Quinn Your loan officer should have a preferred insurance agent in his back pocket.
Sounds like they are asking for the wrong policy. Normally on a flip I use a Renovation Builders Risk policy for the property and a separate Liability policy. There are a couple of markets that will cover that under a Vacant Dwelling with renovation but I don't think they will do it with Replacement Cost (RC) on the existing structure.
Most Renovation Builders Risk policies insure the existing structure at Actual Cash Value (ACV) and the Additions at Replacement Cost (RC). I think I had one or two markets say they might do RC for the structure if needed. I will check and if any are positive I will find out if they write in VA.
I will send you the company that most flippers use. The policy can insure the building while it's vacant, being rehabbed or occupied.
Yes, we can write in VA. Our agency is licensed in all 50 States. However, the markets that I thought might be able to the Replacement Cost coverage on the existing building during the renovation do not do that. The closest I could find is a company that will do an "Agreed Value" on the existing Structure. If the Bank, the company, and yourself can come up with an value that you can agree on then that may help. If they insist on seeing "Replacement Cost" on the paperwork then I would ask them for referrals to who provided that coverage for past projects.