RC Endorsement Explanation?

[iiinycboi]

Hazard Insurance coverage is to be determined or contain a "Guaranteed
Home Replacement Cost Endorsement"

A mortgagee is requesting insurance to have a RC endorsement on the insurance policy.

Do you interpret this as 100% replacement cost at the time of buying

or

Do you interpret this as replacement cost forever?

 

[NCAgent]

Re: RC Endorsement Explaination?

Hazard Insurance coverage is to be determined or contain a "Guaranteed
Home Replacement Cost Endorsement"

A mortgagee is requesting insurance to have a RC endorsement on the insurance policy.

Do you interpret this as 100% replacement cost at the time of buying

or

Do you interpret this as replacement cost forever?

Time of buying. They want to make sure there is replacement cost on the property, not ACV. You can also make a note on the certificate of insurance that there is a provision for 25%, 50% or whatever you have, though there is NO GUARANTEED REPLACEMENT COST coverage above and beyond the coverage A.

That is usually what they want to see in my mortgage experience. If they are asking, then they probably think the RC is low compared to an appraisal they did, or the RC isn't enough to cover the loan amount on the home and they want to make sure the home is properly covered.