If we become aware that a property is now in a flood zone, but we do not have a replacement cost value or insurable value (for whatever reason) on the building, so we are unable to determine the minimum amount of insurance required, can we hold off on sending the customer the 45-day letter until we can make that determination, or should we send a generic 45-day notice that just says the minimum of the replacement cost value, loan amount or max available under NFIP? Then once we determine a minimum, the LO can contact the customer directly with an amount.

Thanks in advance for your help.

If you are talking a day or two, you could probably wait. Why it would take longer than that to make a determination is a little beyond me.

It would only be if we are waiting on an appraisal where we ordered a replacement cost.

Thanks for your help.

Why would you go to that length and expense? Do you not have any other existing means of estimating RCV or ACV??? Other hazard insurance, existing appraisal, call to an insurance agent with square footage and type of dwelling, etc.?

We send our letter with the "Notice to Borroweof Special Flood Hazard" and don't put an amount in the letter. The Notice to Borrower spells out the minimum. Is that OK?

The only problem I see with that is what if the RCV is the "lesser of" and your borrower brings you a policy for say 60,000.00, but all of your records would lead the bank bank to a calculated RCV of 75,000.00. So now you have a disputed RCV amount. Who's right? If the bank is right, your borrower now has to go back and get more insurance. To me, it's a much easier pill to swallow if you make the purchase of flood insurance as easy and straightforward as possible. Tell them how much insurance you want from the get go. Then you only have to argue with them about it once.