What do the FEMA FAQs mean when they warn against creating an "overinsurance" situation for the customer when using hazard insurance RCV to set your required flood insruance amunt? Does "overinsurance" mean, for example, requiring $200,000 from the hazard insurance policy when the loan amount on a refi is only $100,000 and that is the lesser of amount? Or does it mean that if the hazard policy is for $200,000 on a house that appraises for only $100,000, that requiring $200,000 in flood coverage is "overinsuring".
Additionally, does anyone feel that it is ever acceptable to use the RCV from hazard policies when you have a cost approach in the appraisal? And, if you do use hazard RCV, what do you do about getting a value for the foundation RCV and do insurance agents generally laugh or refuse to provide that inforamtion. We have investors that require hazard RCV and I think that exposes us to a potential flood violation.
Sorry, did I just use my outside voice?