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#1926596 - 05/27/14 03:31 PM Forced placed insurance policy copy
Marnie Offline
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Posts: 437
Nevada
Is there any requirement to give the customer a copy of the forced placed insurance policy? The argument is that since the customer ultimately has to pay for the policy, they are entitled to a copy. I disagree, as this policy only protects the bank's interest and does not benefit the customer.

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Flood Compliance
#1926602 - 05/27/14 03:39 PM Re: Forced placed insurance policy copy Marnie
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
I disagree, as this policy only protects the bank's interest and does not benefit the customer.

If you have forced placed flood insurance policies that only protect the bank then you are in violation of the flood insurance requirements.

You MUST purchase the flood insurance on behalf of the borrower, not the bank.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1926625 - 05/27/14 04:14 PM Re: Forced placed insurance policy copy Dan Persfull
Marnie Offline
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Nevada
I phrased that incorrectly. We are purchasing on behalf of the borrower because they have not purchased it themselves. The point I was making was that we are making sure our loan is covered by flood insurance because the borrower has not complied with getting it himself. But my question is because it is forced placed, are we required to give them a copy of the policy?

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#1926637 - 05/27/14 04:21 PM Re: Forced placed insurance policy copy Marnie
rlcarey Offline
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rlcarey
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Galveston, TX
So what you are saying is that you are purchasing a policy in which the customer is the named insured but you do not want to give them a copy of the policy to tell them exactly what is or what is not covered.

Really?
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#1926664 - 05/27/14 04:43 PM Re: Forced placed insurance policy copy rlcarey
Marnie Offline
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Joined: Nov 2007
Posts: 437
Nevada
When we force place insurance, we have a blanket policy with our company for all forced placed policies.

We do receive a dec page for each prop we get force placed insurance for and that dec page has the information pertintent to amounts covered, location, etc. We give that to the customer, but not the actual policy, as it is written as a blanket for all loans for forced placed. It's not we don't want to--it just has a lot of info within that pertains to the overall coverage for all loans.

Know the 2011 manual is no longer the bible, but in there it does talk about, under MPPP, the dual interest of forced placed. Wish they would provide updated guidance.

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#1926669 - 05/27/14 04:47 PM Re: Forced placed insurance policy copy Marnie
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
But my question is because it is forced placed, are we required to give them a copy of the policy?

I can't give you a cite that mandates you provide them a copy but under the flood insurance rules the borrower is the insured under the policy regardless if they purchased it or the bank force placed it.

I guess I'm not sure why you would be hesitant in providing a copy of the policy to the borrower.

If you are going take such a "hard-line" stance then I would question why you do not call the loan for being in default of the provision to provide insurance.

Again I can't cite anything that would mandate you providing a copy of the policy to the borrower but I can't cite you anything why you shouldn't either since their property is protected by the policy purchased on their behalf.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#1926677 - 05/27/14 04:55 PM Re: Forced placed insurance policy copy Marnie
Marnie Offline
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Joined: Nov 2007
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Nevada
We are not taking a "hard line", Dan. We can give a copy of our huge blanket policy to the borrower.

We were just wondering if an option would have been acceptable to just give them a copy of the dec page that references their coverage under this policy and let them know we have the actual policy for here should they need it.

Thanks.

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#1926687 - 05/27/14 05:03 PM Re: Forced placed insurance policy copy Marnie
rlcarey Offline
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rlcarey
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Galveston, TX
So you are saying that this policy is issued with the borrower being a named insured and your insurance provider does not provide a policy document to the borrower?
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#1926689 - 05/27/14 05:06 PM Re: Forced placed insurance policy copy Marnie
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
Are you getting a lot of requests for copies? In all my years I've never had anyone ask for a copy of the force placed policy.

Can you not put a summary together (maybe your provider can provide you such a summary) that outlines the flood section of the policy and provide that to the borrower with contact information if they need to file a claim.

I can't blame you now that you gave us the whole picture. I would be reluctant providing a copy of the bank's blanket policy too.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#1926691 - 05/27/14 05:08 PM Re: Forced placed insurance policy copy Marnie
rlcarey Offline
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rlcarey
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Galveston, TX
I have yet to see one of these all encompassing flood insurance blanket policies actually meet the named insured requirements.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#1926701 - 05/27/14 05:25 PM Re: Forced placed insurance policy copy Marnie
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
Randy, your comment does jog my memory recalling several previous posts where blanket policies were not being accepted by regulators and the primary reason is the blanket policy is purchased on behalf of the bank with multiple persons named as insureds. There was no policy being purchased for the borrower.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#1926778 - 05/27/14 07:09 PM Re: Forced placed insurance policy copy Marnie
Marnie Offline
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Joined: Nov 2007
Posts: 437
Nevada
We are not getting requests. We are doing updates to our procedures and it was brought up whether we should be giving this out. All of your comments indicate to me that while we may have a blanket agreement with our forced placed insurance provider, they (the insurance provider)should be sending the individual policy related to their loan to the customer,not us sending a copy of the blanket policy.

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#1927076 - 05/28/14 03:59 PM Re: Forced placed insurance policy copy Marnie
midwestriver Offline
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Joined: May 2011
Posts: 37
we receive an individual Certificate of Insurance (COI) for each property that has force-placed flood. This certificate can be shared with the borrower as it contains general coverage information as the borrower is covered.

we also have a Master Policy which is a rather long 30+ page document, issued to us, that allows for the individual COI's to be issued when needed.

we would never share our Master Policy with the borrower for a variety of reasons, including that we are not insurance agents and we do not want to be in the business of answering specific coverage questions.

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