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It is my understanding that lenders may not dictate the amount of insurance placed on a home because CA state law. Is it not true that lenders may not force borrowers to insure their homes for more than the replacement cost?

I have checked II.org and CA Dept of Insurance website and can't find anything concrete. The issue comes up a few times a year and I usually explain to my insured's that we can only insure the home to it's replacement cost and that seems to put the issue to rest (I've never heard back from the lenders).

Can anyone point me in the right direction? Where can I get concret info on this? I would like to be able to more confidently advise my clients on the subject and maybe even have a print-out of the facts.

Thanks for any feedback!

that is correct here in AZ an dI would imagine the same everywhere. This is what the 125% or what ever each particular company uses. sometimes you have to go to 150% replacement cost.

We have this same battle daily

It's certainly good to know I'm not the only one who deals deals with this - but do you know of any resources? Someone suggested I talk to Realtor and the guy I spoke with had no idea. I'll try another Realtor - but it would be great if anyone out there can offer up some ideas where I can get some good info on this.

I've got something for you back in my office.. i dealt with this before.. you're not the only one

California Civil Code Section 2955.5

New Law passed in 1988 for California.

Thank you Santa Rosa Ins Broker!