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

Published
2022/06/30