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Insurance Requirements

17 Years of Experience | Uptown | Garden District Real Estate

Conventional Financing

Hazard: Coverage must be at least Appraised Value less Land Value OR Loan Amount

“All Perils” and “Hurricane/Wind & Hail” deductible cannot exceed 5% of policy’s face value

FHA Financing

Hazard: Coverage must be at least Appraised Value less 80% of Land Value OR Loan Amount

“All Perils” and “Hurricane/Wind & Hail” deductible allowed up to 5% of policy’s face value

VA Financing

Hazard: Coverage must be at minimum the Loan Amount

Condo Financing

An “HO6” condo owner’s policy is required in addition to the master condo policies.
Coverage should be at 20% of the appraised value.

Flood Insurance Requirements

Must equal the Homeowner’s coverage. It can be more but never less and it must cover the loan amount up to the $250,000 max flood coverage available.

Flood Insurance on a detached structure on a slab per the appraisal
Any detached structure such as a shed or pool house that is shown either in the appraisal report, on the sketch, or in the appraisal pictures must be addressed by the insurance agent. If the insurance agent will state in a letter that the replacement cost of said structure is less than $1,000 then a separate flood policy will not be required. If the agent feels that the replacement cost is more than $1,000 a separate flood policy and elevation certificate will be required prior to closing.

*If the detached structure is a garage used as a garage then it will be covered by 10% of the main flood policy.
EX: $250,000 in flood coverage would cover a detached “GARAGE” in the amount of $25,000. Refer to the appraisal to see if $25,000 would cover the cost new per the appraiser’s cost approach.

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