3.9.1 Insurance During Construction

A. Public Liability Insurance on a Commercial General Liability form with limits of not less than $1Million per occurrence, $2 Million in the aggregate to protect the mortgagor during the construction phase from claims involving bodily injury and/or death and damage to the property of others, is required during construction. Such Commercial General Liability Insurance must be endorsed to include owners' and Contractors' protective coverage.

B. Vehicle Liability Insurance with limits based on the State or the District of Columbia’s minimum required liability coverage or not less than $300,000 for one person and $500,000 for more than one person, whichever is greater, to protect the mortgagor for claims for bodily injury and/or death, and not

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Chapter 3 Programs 3.9 Property Insurance Requirements

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less than $100,000 against claims for damage to property of others arising from the owner's operation of vehicles is required during construction. Such insurance must include coverage for employer's owned, non-owned and/or hired vehicles, where applicable.

C. For properties in a Special Flood Hazard Area (SFHA) on a Federal Emergency Management Agency (FEMA) Flood Insurance Rate Map, flood insurance is required during construction when the property becomes insurable, and upon completion, in the amount required per Section 102(a) of by the Flood Disaster Protection Act of 1973 (42 USC 4012a(a)). For each improved structure located in a SFHA, HUD insurance requirements may go beyond the statutory minimum.

D. HUD requires flood insurance in an amount at least equal to the greater of:

1. The maximum flood insurance available for that type of property under the National Flood Insurance Program (NFIP); or

2. An amount equal to the replacement cost of the bottom two stories above grade, as determined by form HUD-92329, or equivalent.