Skip to content

Determining Minimum Required Flood Insurance

Answered by: 

We have a loan in the pipeline and received notice that the building is in a special flood zone area. The building is a multiple unit apartment building consisting of a basement and 4 floors. There was an elevation certificate done which showed that only the basement is in the flood area. There is nothing in the basement, and no contents stored there. I realize that in determining the minimum required flood insurance we have to take into consideration: 1-Replacement cost of the building / appraised value; 2- MAX limits of coverage: $500,000.00 limit for structure / $500,000 for contents (since this is a multiple unit apartment building), and the 3- loan amount. Our question is, once we assign a value, and because the flood area is only in the basement, as determined by the elevation certificate, since the building is 4 floors and a basement, can use 1/5 of the value as a factor in determining minimum required flood insurance?

First published on 06/09/2019

Filed under: 
Filed under lending as: 

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics