I am reviewing a loan file right now (property is in a flood zone), and there are two RCVs in the file. One is on the Hazard Insurance, and the other is on the actual Flood Insurance Declaration. They are not close in value. What gives?

I am not sure which one I should be using. Any thoughts or suggestions? Thanks!

The hazard insurance values were determined by the agent (and possibly property owner) using specific property information. What I've found is that the RCV on flood policies is what the bank has told the agent to use for RCV....so I don't trust it. I'm reviewing values on all policies as they come up for renewal. If both policies are through the same agent/company, you could check with them on why there is such a big difference.

"What I've found is that the RCV on flood policies is what the bank has told the agent to use for RCV"

Why would the bank even be in contact with the agent on this issue? I would think that if the bank communicated an amount too low, the bank would be at some risk if they are involved in this process. This is something the borrower and the agent need to determine.

Agree...the bank should not be a part of that conversation.

Do you think the RCV on the Hazard might include he building AND its contents? That was my only thought as to why it could be so much higher than the RCV on the Flood Dec. Forgive me, I am not well versed in Insurance matters.

That is possible. It might include a number of things not covered under flood insurance, such as fences, pools, etc.

Intesting. Thanks everyone for your thoughts and insight!

I agree, but documentation shows this is how it was handled in certain situations.