Hi All,

I have an apartment complex that has multiple buildings on it. Four of the buildings are in a flood zone. Would each individual building need its own flood insurance policy? I have one loan where the whole apartment complex was taken as collateral. Next question is there is a real estate holding company that has the real estate and to whom a loan is to. The operating company has a flood insurance policy that covers multiple real estates including the apartment complex. The insurance coverage is more than enough to cover the loan. Can the bank use this policy for flood insurance even though the policy is made to the operating company and the loan is to the real estate company? Does it matter if the real estate company owns the operating company or the operating company guarantees the loan? Last question how do I figure out the how much flood insurance is required, specifically the Replacement cost value?

Yes, one policy/building in the zone.

If it's legally an apartment complex...how would you take less than an entire building as collateral? That doesn't make sense.

Your next question would be better answered by a lawyer.

Your appraiser needs to be instructed to include cost value in their appraisal.

Well, if it was NFIP insurance you would need one policy per building. If this is private insurance, maybe not.

Only the titled owner of the property can be a named insured on any insurance policy. If you don't own the property, you can't collect in the event of a loss.

Rlcarey: Yes it is private insurance. Since it is private insurance one master policy would be enough to cover the apartment complex which includes the four buildings that are in a flood zone. So it appears that I am compliant with the one policy. We did figure out the dollar amount so we are good there. So the flood insurance policy should be in the real estate holding company's name and not the operating company's name, correct? Does it matter that the operating company guarantees the loan?

All I can say is that I have never seen an insurance company pay someone for a loss that doesn't own the property. If you find one, let me know and I will insure your house against fire damage and go look for my book of matches.

The determination of whether or not a private policy complies with the flood insurance requirements is more involved than just saying they have a policy. The policy has to be comparable to a NFIP policy as far as loss coverages and lender notification processes.