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#2055917 - 12/28/15 10:45 PM Endorsement to Hazard Policy for Flood
Tarhe Offline
Diamond Poster
Joined: Nov 2006
Posts: 1,243
California
We have had a couple of borrowers with NFIP policies approach the bank wanting to cancel their NFIP policy and add an endorsement onto their hazard insurance policy for flood. I don’t think this is okay for many reasons. The renewal page does not have the basic information specific to the flood coverage (flood risk zone, coverage limits specific to the flood insurance, grandfathered, etc.) Yet the agents are encouraging this when policies come up for renewal.

As final rules have not been issued on accepting private policies, our bank "policy" has been that we do not accept private policies except on a case-by-case basis with approval from Credit Admin. We've also been criticized by FDIC examiners for "combined" policies. Credit Admin is asking us to evaluate the endorsements to see if they offer the same protection to the bank as the NFIP policy.

Are other banks running into this?

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Flood Compliance
#2055932 - 12/29/15 01:09 PM Re: Endorsement to Hazard Policy for Flood Tarhe
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,230
Galveston, TX
If they are private policies, the flood zone rating and grandfathering would have nothing to do with those. They rate their own risks. You have to read the guts of the policy and endorsement to see if you think it might eventually qualify as a private policy. As far as policy limits, those should be very clear.
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#2056009 - 12/29/15 04:24 PM Re: Endorsement to Hazard Policy for Flood rlcarey
Tarhe Offline
Diamond Poster
Joined: Nov 2006
Posts: 1,243
California
Thank you!

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