Insurance agent won't send a replacement cost estimate for a mortgage

The agent is often right to refuse. A replacement-cost estimate is the carrier’s underwriting worksheet. Fannie Mae Selling Guide B7-3-02 (08/05/2026) treats a one- to four-unit policy as sufficient when it settles on a replacement-cost basis, except roofs. Ask for that settlement language on the declarations page.

This is for the processor or processing manager at an independent mortgage bank on Encompass whose HOI row is still open prior to docs because the agency will not send an RCE. The counterparty is the insurance agency. Pull the conditions list, the loan number, the property address, and the binder or declarations page already on the file.

The estimator is the carrier’s underwriting file

An RCE, also called a replacement cost estimator or cost-estimator report, is the worksheet the carrier or agency ran to set Coverage A. It lists square footage, materials, and a rebuild number.

It is proprietary underwriting information. Citizens Property Insurance’s 08/29/2024 agent bulletin, read 2026-10-09, says the RCE is part of the insured’s underwriting file and can be provided only to the policyholder, not to third parties such as mortgage companies. On r/InsuranceProfessional in August 2024, a habitational-valuations thread warned that carrier contracts can prohibit sharing an RCE with a lender, and that Florida §626.9551 bars requiring it as a loan condition.

Old overlays matched dwelling coverage to unpaid principal balance, or to 80 percent of replacement cost, and wanted the worksheet as proof. That formula is gone from the conventional 1-4 Guides. What a mortgage lender needs from the homeowners insurance agent before closing is the rest of the HOI packet. This page is the RCE row.

Fannie and Freddie retired the 1-4 estimator

Fannie Mae Selling Guide B7-3-02 (08/05/2026) determines coverage sufficiency from the policy’s loss-settlement terms. A one- to four-unit policy that settles on a replacement-cost basis is sufficient, except roofs. Roofs must be insured. They do not have to be replacement cost. Actual cash value is acceptable for personal property and structures that are not buildings. The maximum deductible is 5 percent of the coverage amount, including each separate peril deductible.

Lender Letter LL-2026-03 (03/18/2026) retired the requirements related to documenting the replacement cost value to verify the coverage amount in B7-3-02. It also retired the requirement to insure roofs on a replacement cost basis.

Freddie Mac Bulletin 2026-C (03/18/2026) is the same move. Seller/servicers are no longer required to verify replacement cost value for coverage sufficiency on a 1- to 4-unit property. The old minimum of unpaid principal balance versus 80 percent of replacement cost, and the RCV verification steps that went with it, are retired. Freddie Mac Guide 4703.2, effective 09/16/2026, read 2026-10-09, now requires a policy that provides coverage on a replacement cost basis, excluding roofs.

Agency	What the 1-4 Guide wants after March 2026	What it no longer wants
Fannie Mae	Replacement-cost settlement except roofs. Deductible at or under 5 percent. B7-3-02 (08/05/2026)	An estimator, and the old unpaid-principal-balance versus 80 percent of replacement-cost math
Freddie Mac	Replacement-cost basis excluding roofs. Deductible at or under 5 percent of dwelling. Bulletin 2026-C	Verify RCV, and the UPB versus 80 percent RCV calculation
FHA	Evidence of Hazard Insurance in the case binder (HUD Handbook 4000.1, read 2026-10-09)	Handbook 4000.1 does not name an agent’s RCE as origination evidence

A missing mortgagee clause, a quote in place of a binder, or a silent settlement line still keeps HOI open. Close the RCE row from the declarations page.

Florida and North Carolina make the ask illegal

Florida Statute 626.9551(1)(e), 2026 Florida Statutes, read 2026-10-09, says no person may require an insurance agent or agency to provide the replacement cost estimator or other underwriting information of an insurer, as a condition precedent or subsequent to a loan secured by real property, when that information is proprietary. The agent or agency may not provide it either.

North Carolina G.S. 58-3-137, read 2026-10-09, bars requiring an insurance company or its designated agent to provide the replacement cost estimator or other underwriting or related proprietary business information as a condition of a loan secured by real property. The North Carolina Department of Insurance may investigate. A knowing violation carries the penalties in Articles 3 and 63 of Chapter 58.

The Independent Insurance Agents of North Carolina (RCE law changes, fact sheet updated 2024-05-10, read 2026-10-09) tells members to hand lenders a one-page flyer on the statute. A later best-practices note, updated 2025-09-17, covers the workaround some shops then tried: asking the agent to write that an RCE was used and that the property is insured to 100 percent of replacement cost. IIANC calls that a guarantee of adequacy, and a major E&O red flag.

Other states differ. Check counsel. This is not legal advice.

On r/loanoriginators in February 2026, a conventional file sat because the agent would not send an RCE. Florida processors pointed at the statute. Another processor said an email confirming replacement-cost settlement cleared the overlay. Ask for that email.

Ask the agent for replacement-cost settlement on the declarations page

What an insurance binder should include for a mortgage is the field list. When the RCE is the open row, send one of these instead.

What you can take	Why it works	When it fails
Binder or declarations page that prints replacement-cost settlement	B7-3-02 and Freddie 4703.2 read the loss-settlement terms	The form is silent, or the dwelling is actual cash value
Agent email that the policy settles on a replacement-cost basis up to the limit shown	IIANC sample language, updated 2025-09-17. Clears a silent form	The agent writes “insured to 100 percent of replacement cost.” That is a guarantee. Bounce it
ACORD comments that the coverage amount is the replacement cost	Florida shops used this after 626.9551 took effect in 2021	Comments that recite the estimator or attach the worksheet in Florida or North Carolina
Carrier letter or endorsement confirming replacement-cost settlement	IIANC: if a shop insists on a certification, it has to come from the carrier	An agent-only letter guaranteeing rebuild cost

Resend the legal name, ISAOA, mailing address, loan number, and closing date with that ask.

Do not attach the borrower’s appraisal and ask the agent to match Coverage A to it. Replacement cost is rebuild cost. Market value includes land. They are different numbers.

A condo master still documents 100 percent of estimated replacement cost

The master is a different packet from the unit agent’s dwelling worksheet.

Fannie Mae B7-3-03 (08/05/2026) wants master coverage at least equal to 100 percent of the estimated replacement cost of the project improvements, including common elements and residential structures. Document that amount with any one of: guaranteed or extended replacement cost, a replacement cost value estimate provided by the insurer, the project’s insurance risk appraisal, or a statement from the insurer or another qualified professional. Master loss settlement is replacement cost, except roofs.

Freddie Bulletin 2026-C allows a guaranteed or extended replacement-cost endorsement, or equivalents, as evidence of 100 percent RCV on the master. The project’s insurance risk appraisal and an insurer or specialist statement remain on the list in 4703.2.

Ask the HOA or the master carrier for one of those five. Do not chase the unit agent for a dwelling worksheet on the HO-6. Put the standard mortgagee clause on the HO-6. The master names the HOA.

Dwelling equal to the loan amount is a shop overlay

Many condition lists still say “dwelling coverage must equal or exceed the loan amount” and “provide RCE if coverage is less.” That match is overlay. Fannie and Freddie no longer use unpaid principal balance versus 80 percent of replacement cost on a 1-4 origination file.

If the overlay is on the conditions list, take it to the underwriter with B7-3-02 and Bulletin 2026-C attached, plus the declarations page that already shows replacement-cost settlement. If the shop keeps the overlay, the agent’s email that the policy settles on a replacement-cost basis up to the limit shown is the document that usually clears it. The estimator is the document that stalls the file in Florida and North Carolina, and at any agency whose E&O carrier told them not to send it.

Pull the open HOI files. Read each declarations page for replacement-cost settlement, the deductible, and the dwelling limit. If the page is silent, resend the agent a request for a line that the policy settles on a replacement-cost basis up to the limit shown, with the loan number and the lender’s legal name in the same email. Log the sent date on the file that afternoon.