I posted this on another thread on the real estate board
The flood insurance adjusters are going to adhere the coinsurance penalty rules. In short, you need to insure your home, whether primary policy or flood policy to at least 80% (in most cases) of true replacement value to not incur additional penalties/deductions taken out of the total claim. You can't just "name" the amount you want to insure your home for and still be covered they way you would think.
If you want more info, let me know and I'll search here for a fairly good explanation of coinsurance penalty posted a few months back.
Fyi, standard flood insurance for a home caps at $250,000 so homes valued more that 250k will need an excess flood policy to be fully insured for flood. It is a separate policy that can usually be purchased from the same agent you bought the primary flood policy from. Commercial buildings cap at $500k on the standard policy, by the way.