I know I just read something about this, but I can't seem to locate it again. What should we have in the loan file at the time of loan closing to prove that flood insurance is in effect at the prior to funding the loan? Is a completed application and a copy of the check sufficient? If the effective date of the policy in the file is a few days after the loan date, will we have problems?

Yes.

Follow up question:

Can a tax assessed value be used to support the amount of flood insurance required? The particular loan I'm looking at has no appraisal (hence no cost approach valuation) and no copy of the hazard insurance declaration page showing the replacement cost value.

The tax assessment could be used, but it would be advisable that someone qualified within the bank do an evaluation using the assessment as a base.

We require a paid receipt for the flood insurance premium as opposed to a copy of a check. There have been circumstances where there was a copy of a check, but the check never was never received and the premium was never paid.