I was suprised to find out that the NFIP only covers ACV for commercial properties. Since I own a commercial building which is very old, the ACV (depreciated replacement cost) was a small fraction of replacement cost, yet my broker had me insured for full replacement cost. This meant that I was way overinsured in terms of the amount of coverage vs. the amount I could recover from the NFIP, and was paying a premium about 4 times the amount I should have been paying.My understanding of how this works is that if you have a non residential building with replacement cost of, say, $1 million but an ACV of , say, $200,000,(using remaining useful life statistics or IRS depreciation rules) you should buy insurance and pay premiums on $200,000 of coverage since that's all the the NFIP will pay. Is this the correct way to interpret the NFIP rules? How does the NFIP compute ACV?ThanksBob A
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