Please help me resolve this issue with our lender. We have several construction loans that require flood insurance and there's a dispute about how much insurance is required. Loan amount: $150,000, Appraisal (dwelling portion): $140,000, and Cost Breakdown for Construction (excluding land purchase, landscaping, etc.): $115,000. In this case, how much insurance would be required? The lender is getting coverage equal to the cost breakdown. Thanks for any feedback you can give.

If something happens to the structure, will it cost $115,000 to replace it or $140,000?

You are to insure for the least of the outstanding principal balance, the value of the structure or the maximum available under the NFIP.

IMO you need $140,000, the value of the structure.

Quote:

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Appraisal (dwelling portion): $140,000,

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I am assuming this is the dwelling only not inclusive of the land. Based on the Regulation and what I have learned this week you will need the $140,000.00, as Dan had stated.