What is the minimum coverage requirement for RCV in flood insurance?

The minimum coverage requirement for Replacement Cost Value (RCV) in flood insurance is set at at least 80% of the total replacement cost of the insured property. This requirement ensures that homeowners are adequately covered for the full cost to replace their property in the event of a flood.

By having at least this percentage as coverage, policyholders can avoid significant financial losses should a disaster occur. It encourages property owners to carry sufficient insurance to reflect the actual cost of rebuilding or replacing their structures, which can be substantially higher than the market value, especially in regions prone to flooding.

This requirement helps mitigate disputes about payouts and ensures that the insured amount aligns more closely with real-world costs associated with rebuilding, rather than just the market value, which can fluctuate over time. Having coverage at this threshold supports the financial stability of both the insured and the insurance program as a whole.