We have a $500,000 flood insurance policy for a business condo building that covers two units. There are four units in the building, but our policy covers two units that our borrower owns. The borrower is a business. The loan amount is $500,000, and the value is $1,170,700. For a business condo, would the maximum available under the NFIP be $500,000 or $1,000,000 due to there being two units? In other words, what is the minimum amount required to meet FDPA compliance? Do we look at the two units separately or together?
The loan amount is $500,000. The maximum amount from FEMA is $1,000,000 (Two general policies at $500,000 each). The value of the improvements is $1,170,700.
To be in compliance you must obtain at least $500,000 in coverage, which is the loan amount. The maximum coverage you could obtain is $1,000,000, assuming each unit is worth at least $500,000.
NOTICE: This email message, including any attachments, is intended only for the addressee, and may contain confidential and privileged information either as protected work product or confidential client information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, do not read, copy, retain, or disseminate this message or any attachment, and please contact the sender by reply e-mail or at 888.760.5646 and destroy all copies of the original message and attachments. Neither the transmission of this message or any attachment, nor any error in transmission or misdelivery shall constitute waiver of any applicable legal privilege.
THIS RESPONSE AND ITS ATTACHMENTS DO NOT CONSTITUTE LEGAL ADVICE