Missouri Laws 379.1855 – Coverage and premiums based on replacement cost value — determined how
1. Any lender-placed insurance coverage, and subsequent calculation of premium, should be based upon the replacement cost value of the property. Replacement cost value of the property shall be determined as follows:
(1) The dwelling coverage amount set forth in the most recent evidence of insurance coverage provided by the mortgagee (“last known coverage amount” or “LKCA”), if known to the lender or servicer;
Terms Used In Missouri Laws 379.1855
- Department: the department of commerce and insurance. See Missouri Laws 379.005
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
- Mortgagee: The person to whom property is mortgaged and who has loaned the money.
- Mortgagor: The person who pledges property to a creditor as collateral for a loan and who receives the money.
- Property: includes real and personal property. See Missouri Laws 1.020
(2) The insurer shall inquire of the insured at least once as to the LKCA, and if it is not able to obtain the LKCA from the insured or in another manner, the replacement cost value may be determined as set forth in subdivision (3) or (4) of this subsection;
(3) If the LKCA is unknown and cannot be obtained from the insured or in another manner, the replacement cost of the property serving as collateral as calculated by the insurer, unless the use of replacement cost for this purpose is prohibited by other law;
(4) If the LKCA is unknown and cannot be obtained from the insured or in another manner, and the replacement cost is not available or its use is prohibited, the unpaid principal balance of the mortgage loan.
2. In the event of a covered loss, any replacement cost coverage provided by an insurer in excess of the unpaid principal balance of the mortgage loan shall be paid to the mortgagor.
3. No insurer shall write lender-placed insurance for which the premium rate differs from that determined by the schedules of the insurer on file with the department of commerce and insurance as of the effective date of the policy.