Does this legislator not realize that the regulations already say that the required amount of coverage is the least of (a) loan balance, (b) insurable value, or (c) NFIP maximum limits? If the mortgage balance is less than the replacement value, the existing regs already allow for insurance to cover only the mortgage balance. But if the property has a really high market value it could have a really large mortgage as well, possibly greater than the value of constructing the building in the first place, and then having to insure the mortgage balance would be punitive to the property owner. Watch what you wish for, or at least, watch how they word it.
Does this legislator not realize that the regulations already say that the required amount of coverage is the least of (a) loan balance, (b) insurable value, or (c) NFIP maximum limits? If the mortgage balance is less than the replacement value, the existing regs already allow for insurance to cover only the mortgage balance. But if the property has a really high market value it could have a really large mortgage as well, possibly greater than the value of constructing the building in the first place, and then having to insure the mortgage balance would be punitive to the property owner. Watch what you wish for, or at least, watch how they word it.