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This question was originally posted in our Compliance Master Group forum by tstrait.
The loan is for $700,000. The collateral consists of three (3) parcels of land totallying 226 acres. A house (valued at $220,000) and a barn (valued at $22,500) sit on the biggest parcel. The insurance policy shows they are both insured. The appraisal for the land/house/barn was $1,670,000. The flood search showed the address was not in a flood zone, but the appraiser noted that while the house was not in a flood zone, a small corner of the barn was. Do we need to get flood insurance on the barn?
We had a similar situation at a bank where I worked. You should be able to talk to your flood determination company and explain your situation. They have most likely seen this before and can review the location of the barn using the parcel number and aerial maps to determine if the barn is located in a flood zone. If part of the barn is in a flood zone then you will need flood insurance on the barn.
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