We have a property with 3 buildings. When lender made loan for one building the flood insurance purchased was not adequate. Lender also made a second loan for the other buildings. Lender explained the inadequate amount of coverage on first building and customer purchased another policy (with another company but same agent) that has enough coverage for remainder of first building and the other two buildings. Agent assures lender that this is OK. I am a little puzzled over this. I thought we had to have one policy with all three buildings listed or a seperate policy for each building. Can someone share some info on this or point me in the right direction.

You are correct that each building must have flood insurance coverage. The multiple building policy was phased out a year ago. Now you must buy a separate policy for each building.

The Proposed FAQs address this in #11:
Is flood insurance required for each building when the real estate security contains more than one building located in an SFHA in a participating community? If so, how much coverage is required?

Answer: Yes. The lender must determine the amount of insurance required on each building and add these individual amounts together. The total amount of required flood insurance is the lesser of:
• the outstanding principal balance of the loan(s) or
• the maximum amount of insurance available under the NFIP, which is the lesser of:
o the maximum limit available for the type of structures or
o the “insurable value” of the structures (see Question 7).
The amount of total required flood insurance can be allocated among the secured buildings in varying amounts, but all buildings in an SFHA must have some coverage.

Example: Lender makes a loan in the principal amount of $150,000 secured by five nonresidential buildings, only three of which are located in SFHAs within participating communities.
• Outstanding loan principal is $150,000
• Maximum amount of insurance available under the NFIP
o Maximum limit available for the type of structure is $500,000 per building (non-residential buildings); or
o Insurable value (for each non-residential building for which insurance is required, which is $100,000, or $300,000 total)
Amount of insurance required for the three buildings is $150,000. This amount of required flood insurance could be allocated among the three buildings in varying amounts, so long as each is covered by flood insurance.