Flood Insurance Regulations

Looking for a little guidance. When issuing forced placed insurance to a borrower, is the current principal balance used to detrmine the forced placed amount of insurance coverage? Or is there another way of detrmining the amount of insurance coverage?

Thanks in advance for any assistance.

It would be at a minimum, the lesser of the current principal balance, the amount of the improvements or the maximum amount of insurance available, unless for safety and soundness reasons the bank was requiring more insurance.