Flood--Do we have enough?

We have property in flood zone and it has a 2007 appraisal with a replacement cost value of 70M. Our flood insurance is for 65M. We have a 2009 tax assessment that shows are improvements are valued at 30M. Can we rely on the 2009 tax assessment to prove we have anough insurance. Our hazard insurance is also at 65M. Or are we in violation--what are our options here? Thanks.

We have the FDIC here this week and they told us not to use a tax assessment, use only an appraisal if not, then hazard insurance. So in your example, if you have a document that shows RCV at $65K and that equals or exceeds your loan amount, you should be fine.

If you have a 2 year old appraisal showing a RCV of 70, how can you justify a RCV of 30 based on a tax assessment? Are you saying the property lost over 50% of its RCV in 2 years? If so you have some problems other than flood coverage.

You have to insure for the lesser of

1. The value of the property less land value,
2. The balance of any loan(s)
3. Maximum coverage available under the NFIP.

I thought the improvements were 30K, not the value.I was going off the statement that they have hazard ins. value of $65K (I assumed this was recent and up to date).

That is the problem as our loan amount is 75,000. The value of improvements are much less value because the mobile home is on a lake and the value of the property is much greater than the improvements. The appraisal gave a much higher value to the improvements than the 2009 tax assessment. I believe we are under by about 5,000 on flood if we use the flood regulation requirements.

I agree with Dan. Also, IMO, if you are relying on the 2007 appraisal, you can only rely on any other 2007 data and would therefore need 70K.

I'm not sure what is going on here but I would be very suspect of an appraiser that gave, and a loan officer that accepted, a replacement cost value of $75,000 for a mobile home. I'm not saying it's not possible, but I am saying it is suspect.

Land is not insurable. You have to determine the insurable value of the improvements and if you have $65,000 in homeowners insurance on the improvements then I would have to assume that's the insurable value and the amount of flood insurance needed.

Sounds to me you have some investigative work to do.