Urgent - Refinance vs Insurance Policy

[Tiago Pina]

Hello all - I aquired a multifamily property last year and my hard money loan will expire in a couple of months, I was in the process of refinancing it, but the bank is requiring that the insurance policy to be on a replacement cost, and I currently have it as 200% of actual costs. This property is located in Waterbury-CT. I purchased it at $100k it's currently valuated at ~ 150k and insurance polity covers $250k. The estimate of the actual costs would be $900k. 

If I change the policy to cover actual costs, policy will cost the triple or $5,000/ year more, which makes the investment have negative cashflow. 

Urgent help needed:

1 - Is this a common requirement? since the refinence loan ammount will be around $100k, my current policy covers 250% of the loan amount so why can't the bank accept it?

2 - Can you suggest a bank that would accept my current policy?

3 - Any other creative ideas other than selling the property?