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#1125209 - 02/06/09 08:42 PM Flood Ins. on Farmstead w/ mult. structures (ACV?)
illiniyak Offline
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Joined: Jan 2008
Posts: 283
We have a $250,000 farmstead loan that falls in a flood zone. The loan contains:

Non-owner occupied home appraised at $149,000 replacement cost (depreciated value (Actual cash value) is $60,000)

Dairy Barn valued at $34,000 replacement cost (depreciated value (ACV) is $6,700)

Open-End Shed valued at $29,500 RC (Depreciated value (ACV) is $3,000)

The insurance policy is for building coverage of $80,000.

1st Question: Do we need seperate policies on all of the structures(house, barn, shed)?

2nd Question: Are we right to use the ACV cost approach instead of replacement cost because it is non-owner occupied?

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Lending Compliance
#1125332 - 02/06/09 09:28 PM Re: Flood Ins. on Farmstead w/ mult. structures (ACV?) illiniyak
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,455
Bloomington, IN
Page 38 of the Mandatory Purchase Guidelines:

. . . Each building securing a loan must be covered by a separate policy.

Loss payment for RCV and ACV is discussed on page 28.
Last edited by Dan Persfull; 02/06/09 09:32 PM.
The opinions expressed are mine and they are not to be taken as legal advice.

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