We have a complex commercial loan taking several different properties as collateral; only a few are in a flood zone. Is the flood insurance calculated disregarding the properties that are not in a flood zone? Let's say the properties requiring insurance are eligible for a combined amount of coverage equal to or exceeding the loan balance - would the flood coverage have to equal the balance, even though there are numerous other properties as collateral?
I suppose the answer is yes, flood insurance would have to cover the entire balance, but I'm struggling with this concept; if the properties were financed separately the required coverage would be much less.
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