6.2-412 - (Effective October 1, 2010) Fire insurance coverage under certain loans not to exceed replacement value of improvements. - Virginia Statutes

§ 6.2-412. (Effective October 1, 2010) Fire insurance coverage under certainloans not to exceed replacement value of improvements.

A. As used in this section, "property insurance coverage" means insuranceagainst losses or damages caused by perils that commonly are covered ininsurance policies described with terms similar to "standard fire" or"standard fire with extended coverage."

B. 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.

C. 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.

D. A violation of this section shall not affect the validity of the mortgageor deed of trust securing the loan.

(1989, c. 230, § 6.1-2.6:1; 2010, c. 794.)