                                 CODE OF VIRGINIA

INSURANCE COVERAGE UNDER CERTAIN LOANS NOT TO EXCEED REPLACEMENT VALUE OF
IMPROVEMENTS (§ 6.2-412)

A. As used in this section:
			&#8220;Flood insurance coverage&#8221; means insurance against loss or damage
to any property caused by flooding or the rising of the waters of the ocean or
its tributaries.
			&#8220;Property insurance coverage&#8221; means insurance against losses or
damages caused by perils that commonly are covered in insurance policies
described with terms similar to &#8220;standard fire&#8221; or &#8220;standard
fire with extended coverage.&#8221;

B. No lender shall require a borrower, as a condition to receiving or
maintaining a loan secured by any mortgage or deed of trust, to provide or
purchase property insurance coverage or flood insurance coverage against risks
to any improvements on any real property in an amount exceeding the replacement
value of the improvements on the real property.

C. In determining the replacement value of the improvements on any real
property, 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 the
   lender&#8217;s appraisal of the real property.

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

HISTORY: 1989, c. 230, § 6.1-2.6:1; 2010, c. 794; 2014, c. 247.