The maximum amount of Flood insurance that can be purchased on a condo is 80% of the replacement cost of the building or the total number of units in the condo building times $250,000, whichever is less.

What if there is no documented Replacement Cost on the building. Should we use the appraisal value to base our calculation on?

Do you have a RCBAP?

Also, the maximum amount is 100% of the RCV - not 80%.

The maximum amount of Flood insurance that can be purchased on a condo is 80% of the replacement cost of the building

Where is this coming from?

The maximum coverage that can be purchased is 100% of the RCV or the number of units times $250,000, whichever is less.


What if there is no documented Replacement Cost on the building

If there is a RCBAP then the RCV is required to be shown on the Dec. page.

Let's say we have a condo loan where RCV is $150,002 per unit. Insurance per unit is $150,000 and our loan amount is $200,000. I know the lesser of the RCV, loan amount and max available is required ($150,002). Do we need to have the borrower get a policy for $2??? Common sense says no but a strict reading of the reg doesn't say close enough is fine. ugh... smile

How many units? They can only buy flood insurance in increments of $100.

10 units. So in my example the RCV of the whole building per the flood policy is $1,500,020 and they have insurance for $1,500,000.

I don't think I would sweat it for $2. You would have to be faced with a really unreasonable auditor or examiner. You could force them to get a dwelling policy for $100, but then you could be criticized for over insuring.

Thanks for your input!