Here is the scenario: Customer has a loan of $212,000 secured by three properties. Two are residences, one is a commercial building. Total appraised value of all three structures is $381,500. One residence is in a flood zone with a RCV of $200,000. Am I correct in calculating that we need $200,000 in flood insurance coverage on that residence?

Is this property the applicant's primary residence? If not you will need ACV - and you are correct on the amount. The required flood insurance is still the lesser of:

1. The loan amount;
2. The actual cash value/replacement cost of the property;
3. The maximum available for the property type.

In this instance it would be the actual cash value (or replacement cost)

You would be correct. The values of properties not located in the SFHA are not a consideration when calculating the minimum coverage requirements.

The minimum coverage requirement is the lesser of the:

The insurable value for the property located in the SFHA:
The outstanding principal balance of all loans secured by the property located in the SFHA:
The maximum coverage available through the NFIP for the property type located in the SFHA.

Thanks. Just wanted to verify. And yes, it's the customer's primary residence that's in the flood zone.