SECTION 7 - MINIMUM INSURANCE: LEASEHOLD INSURANCE

1. The rate for Leasehold Insurance (or insurance for renewal of a lease) shall be the owner's rate and shall be based upon the amount of insurance selected by the insured according to one of the following methods:
   

   
   
   1. For leases having a term of six (6) years or less, an amount equal to the aggregate of the total rents payable under the lease; or
      
      
   2. For leases having a term of more than six (6) years, an amount not less than the aggregate of the total rentals for the six (6) years immediately following the closing of the lease transaction (on percentage leases, a statement of estimated rent may be used); or
      
      
   3. Not less than the fair market value of the land and improvements at the time of closing of the leasehold transaction; or
      
      
   4. Not less than the appraised value of the land and improvements at the time of the closing of the leasehold transaction
      
      
2. In the case of proposed construction, the projected cost of improvements may, at the option of the insured, be added to the amount specified in (A)(1) through (4) above.
   
   
3. When insuring an assignment of a leasehold estate, the minimum amount of insurance is calculated by the greater of the following:
   

   
   
   1. the full consideration for the leasehold estate, including all mortgages assumed or taken subject to; or
      
      
   2. the value of the leasehold estate calculated by the method outlined in Section 7(A)(1) or Section 7(A)(2) above.