2006 Code of Virginia § 6.1-2.6:1 - Fire insurance coverage under certain loans not to exceed replacement value of improvement...
6.1-2.6:1. Fire insurance coverage under certain loans not to exceedreplacement value of improvements.
A. No lender shall require a borrower, as a condition to receiving ormaintaining a loan secured by any mortgage or deed of trust, to provide orpurchase property insurance coverage against risks to any improvements on anyreal property in an amount exceeding the replacement value of theimprovements on the real property.
In this section, "property insurance coverage" means insurance againstlosses or damages caused by perils that commonly are covered in insurancepolicies described with terms similar to "standard fire" or "standard firewith extended coverage."
In determining the replacement value of the improvements on any realproperty, the lender may:
1. Accept the value placed on the improvements by the insurer; or
2. Use the value placed on the improvements that is determined by thelender's appraisal of the real property.
B. A violation of this section shall not affect the validity of the mortgageor deed of trust securing the loan.
(1989, c. 230.)
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