Requirements
The maximum deductible amounts:
- apply to all insurance coverages required by:
- must comply with the following tables.
| Maximum Deductibles |
|---|
| For the peril of... |
The maximum deductible must not exceed... |
| Wind/Hail (unrelated to a catastrophic peril) |
- 5% of the subject collateral’s Total Insurable ValueTotal Insurable ValueFor any Property, the sum of the full value of the insured's:
covered Property;
Property-related business income values; and
any other covered Property interests.
; or
- when expressed only as a dollar value:
- $50,000 for collateral Insurable ValuesInsurable ValuesFor any Property, the estimate of the maximum dollar amount needed to replace, repair, or reproduce the Property, but excluding any land value.
less than $10 million; or
- $100,000 for collateral Insurable ValuesInsurable ValuesFor any Property, the estimate of the maximum dollar amount needed to replace, repair, or reproduce the Property, but excluding any land value.
$10 million or more.
|
| Named Storm |
- 7.5% of the subject collateral’s Total Insurable ValueTotal Insurable ValueFor any Property, the sum of the full value of the insured's:
covered Property;
Property-related business income values; and
any other covered Property interests.
; or
- when expressed only as a dollar value:
- $50,000 for collateral Insurable ValuesInsurable ValuesFor any Property, the estimate of the maximum dollar amount needed to replace, repair, or reproduce the Property, but excluding any land value.
less than $10 million; or
- $100,000 for collateral Insurable ValuesInsurable ValuesFor any Property, the estimate of the maximum dollar amount needed to replace, repair, or reproduce the Property, but excluding any land value.
$10 million or more.
|
| Maximum Deductibles for All Other Perils |
|---|
| Specific Limit Insurance Policy |
| For Policies... |
The maximum deductible amount per occurrence based on the Total Insurable Value is... |
| Less than $10 million |
$50,000 |
| $10 million or more |
$100,000 |
| Blanket Deductibles |
| For Blanket Policies with a... |
The maximum deductible amount per occurrence is... |
| Blanket limit |
$250,000 |
| Specific limit |
- $50,000 for collateral Insurable ValuesInsurable ValuesFor any Property, the estimate of the maximum dollar amount needed to replace, repair, or reproduce the Property, but excluding any land value.
less than $10 million; or
- $100,000 for collateral Insurable ValuesInsurable ValuesFor any Property, the estimate of the maximum dollar amount needed to replace, repair, or reproduce the Property, but excluding any land value.
$10 million or more.
|
| Expanded Deductibles1 |
| For Policies other than NFIP... |
The maximum deductible amount per occurrence based on the Total Insurable Value is... |
| Less than $10 million |
$100,000 |
| $10 million or more |
$150,000 |
|
1 Expanded deductibles must meet all the following:
- the Borrower evidences liquid assets equal to at least 4x the deductible amount;
- the Mortgage Loan
- has a Pass rating,
- is not currently delinquent, and
- has not been delinquent within the last 12 months;
- the Property condition rating is a 2 or better; and
- you annually review the Mortgage Loan’s eligibility.
|
Guidance
Before accepting any deductibles, you should:
- assess the Borrower’sBorrower’sPerson who is the obligor per the Note.
ability to pay the deductible throughout the policy term;
- determine the high deductible financial exposure by considering total paid expenses rather than only the difference between the
- maximum allowable deductible, and
- requested/actual deductible; and
- only use the Borrower’sBorrower’sPerson who is the obligor per the Note.
owned or related properties to determine the maximum deductible if insurance coverage is provided on a management company’s or unrelated entities’ master property program.
