MLOs - What is Florida Statute 626.9551 and how will it wreak havoc on your new loan closings?

These changes make it illegal to request a Replacement Cost Estimator from the insurance agent. What this means is we cannot ask for the cost estimator (and agents are not allowed to provide it), but we can ask what the insurable value is to meet the agency guidelines related to sufficient coverage. Basically, instead of asking for the proprietary documentation for HOW they determined the replacement cost, we simply need to understand WHAT the replacement cost is.

Lenders always ask for Guaranteed Replacement Cost - which we do not do here in Florida, or proof that the coverage amount is sufficient to replace the dwelling in case of total loss.  What we all have been doing is asking for an RCE or Replacement Cost Estimator to justify the coverage amount when that amount is less than what Underwriting deems necessary.

You will no longer get an RCE from your insurance agents.  It is illegal now to provide that to the mortgage processor and mortgage lender. 

So now what!?

Different lenders will require different things but the consensus is that the agent can type in the Acord form comments that the coverage amount is the replacement cost.

I am sure that some lenders will require it a different way and some Insurance Agencies may provide it differently.