New loan using existing mortgaged property. An older house sits on the property - Appraisal in 2019 listed the market value as $15,000. We ended up with $75,000 in flood insurance - no idea where that value came from as I was not involved with the transaction. I believe the customer just got insurance in the amount the agency chose. Now trying to determine the amount of coverage actually needed.

Market value of $15,000 is not the correct approach to use.
Loan amount is well over the amount we would insure the house for.
No hazard policy in place - there is extra land and the house is not significant to the loan.
The flood policy is for $75,000 but it states a replacement cost of $90,000.

I feel the $15,000 is too low and the $90,000 is too high. I have researched estimates to reconstruct and it would be close to $115,000, but it is highly doubtful that the customer would ever rebuild this house as it is currently vacant.

How would I go about determining the correct value for flood insurance - that I can actually support?

Is this a primary residence?

No it is not.

Then your number that you need is the Actual Cost Value, which is the replacement cost minus depreciation. Did your 2019 appraisal not address depreciation and include a cost basis appraisal?

You are correct that a market value is worthless when it comes to flood insurance.

Unfortunately no - it did not contain cost basis or depreciation - it only gave an approximate value of $15 per sf for the house. The majority of the appraisal was for the land value.

Then you are left to making your own justification. You already said you calculated RCV at $115,000. Call up one of your appraisers and ask them a simple question. Choose from the options listed: If I had a house that was built in 19XX and has not had major renovations/been fully renovated and the current condition of the house was in fair/ good/excellent conditions, what sort of depreciation would you normally assign to the structure?