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#2207867 - 03/05/19 09:31 PM flood coverage on 2 properties in flood zone
pjs Offline
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A business loan secured by the business property and their personal residence both in flood zones. This would be a 1st lien on the business property and a second on the personal residence. We have the personal residence loan too.
How do you figure the amount of flood coverage on the business loan? Does the personal residence have to carry flood insurance
that covers both the personal loan and the business loan balance??? A bit confused. Thanks.

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Flood Compliance
#2207869 - 03/05/19 09:35 PM Re: flood coverage on 2 properties in flood zone pjs
rlcarey Online
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What are the insurable values and the loan amounts?
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#2207906 - 03/06/19 01:15 PM Re: flood coverage on 2 properties in flood zone rlcarey
pjs Offline
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business - insurable value -$204,700- the loan amount: $100,000
per residence- insurable value- $177,800- the loan amount $40,000

Thank you.

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#2207909 - 03/06/19 01:49 PM Re: flood coverage on 2 properties in flood zone pjs
rlcarey Online
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Galveston, TX
Assuming you mean that the $40,000 is the 1st lien on the residence.

You need at least $40,000 on the residence and you need a total of $140,000 between the two properties. There has to be a policy on the commercial property for some amount as each building would require a policy. How the customer chooses to split that up is up to them.
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#2207915 - 03/06/19 02:20 PM Re: flood coverage on 2 properties in flood zone pjs
pjs Offline
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Yes, 40k is the first lien- I am sorry I did not specify that-
We were covered at the beginning because the flood policy on the business alone was $212,400.

What about years later: the balance on the home- 1st lien- $36,982- with flood coverage of $39,600
the business loan balance is $54,929- flood coverage on business is $100,000.

Are we ok? Would I add the balance of the 1st lien to the balance of the business loan = what I need for flood coverage?

Thanks so much.

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#2207918 - 03/06/19 02:44 PM Re: flood coverage on 2 properties in flood zone pjs
rlcarey Online
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You need to cover the 1st lien on the house with a policy on the house. Then as long as both policies are more than the total amount outstanding, you are fine.
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#2207922 - 03/06/19 03:12 PM Re: flood coverage on 2 properties in flood zone rlcarey
pjs Offline
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Yes- we have a flood policy on the home.
Thanks so much- I appreciate you explaining it to me.

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