Flood Insurance: Replacement Cost Value

Be sure to JOIN US for our webinar, “Flood Insurance & Insurable 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 the replacement cost value. But, again, that’s just one potential option.

David explains replacement cost value in the video.

Published
2022/07/13