Flood Insurance: Actual Cash Value

When a borrower is required to purchase flood insurance, the flood rules say that it must be in an amount to cover the lesser of:

  1. The outstanding principal balance of all loans secured by the property;
  2. The overall insurable value of the property (minus the land value); or,
  3. The maximum amount of insurance available under the National Flood Insurance Program.

If you look at #2, …The overall insurable value…. What is that? The answer is it could be a variety of different things. One of the options is that the insurable value could be equal to actual cash value. But, again, that’s just one potential option.

David explains actual cash value in the video.

 

Ready to learn more? JOIN US for our webinar, “Flood Insurance & Insurable Value”. Featured topics include:

  • Insurable Value Calculation Methods: Replacement Cost Value,
  • Actual Cash Value, Functional & Demolition/Removal Cost
  • Why Hazard Insurance Should NOT Be Used
  • Why You NEVER Use Market Value!
  • NFIP Policy Comparisons - What Policy for which Property Type
  • What NFIP Policies Don’t Cover

Flood Insurance Resources!

Published
2022/06/30
David Dickinson

David Dickinson

David’s banking career began as a field examiner for the FDIC in 1990. He later became a Compliance Officer and Loan Officer for a small bank. In 1993, he established Banker’s Compliance Consulting. Along with his amazingly talented Team, he has written numerous compliance articles for prestigious banking publications and has developed compliance seminars that Banker’s Compliance Consulting produces.

He is an expert in compliance regulations. He is also a motivational speaker and innovative educator. His quick wit and sense of humor transforms the usually tiring topic of compliance into an enjoyable educational experience. David is on the faculty of the American Bankers Association National Compliance Schools and has served on the faculty of the Center for Financial Training for many years. He also is a frequent speaker at the ABA’s Regulatory Compliance Conference. He is also a trainer for hundreds of webinars, is a Certified Regulatory Compliance Manager (CRCM) and has been a BankersOnline Guru for many years. The American Bankers Association honored David with their Distinguished Service Award in 2016.

David and his wife Karen have three adult children, four grandchildren (none of whom live at home!) and two cats (of which Dave is allergic … the cats, not the children!). They recently moved to an acreage outside of Lincoln, Nebraska where he gets to play with his tractor. When possible David can be found fishing, making sawdust in his shop, or playing the guitar and piano. He also enjoys leading worship at his church.

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