Flood Insurance – Do we have enough?

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Question:

Our loan amount is $1,000,000. According to the hazard policy, the replacement cost value of the building is $1,500,000. We only have $500,000 coverage on the building and our internal auditor has indicated we need more coverage. Is this true?

Answer:

Under the Flood Rules, you are required to get the lesser of the loan amount, value, or maximum coverage allowed under NFIP. If this is a commercial or non/residential structure, the maximum amount of coverage would be $500,000; which is the lesser of the three.

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Learn more about Michelle Strickland’s Flood Compliance for Commercial Lenders webinar.