Flood insurance on a commercial building expired in May. After 45 days, we force placed a $500,000 policy. Borrower has now purchased a $250,000 effective Aug. Do we:
1) Cancel the force-placed policy, accept the borrower’s $250,000 policy and start another 45 day letter cycle requesting the borrower to increase his policy to $500,000?
2) Accept the borrower’s policy and reduce the force-placed policy to $250,000 and notify borrower to increase – while retaining both policies? OR
3) Keep the $500,000 force-placed policy in place until borrower increases his policy to $500,000? (Can we do that?)