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Are there Insurance Requirements for Loans?

To protect each borrower and the Agency, SBA may require you to obtain and maintain appropriate insurance. By law, borrowers whose damaged or collateral property is located in a special flood hazard area must purchase and maintain flood insurance. SBA requires that flood insurance coverage be the lesser of

  • The total of the disaster loan
  • The insurable value of the property
  • The maximum insurance available

Source: U.S. Small Business Loan Administration

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