Yes, I know this has been discussed before, but I've been going in circles for a few days with an insurance agent and I'm starting to get worn out. Thinking perhaps I either need confirmation that I am appropriately digging my heels in, or that I'm just wrong.

Loan is to a builder to build commercial buildings. One structure on property in flood zone is already built, two more are to be constructed with the loan. Of course, we are requiring proof of flood insurance for all 3 prior to closing.

Agent provided us with a certificate for the existing building, and a quote for builder's risk for the two structures to be constructed - I was surprised to see flood insurance included in that builder's risk, but it was there.

So, I let the agent know that although the amounts were correct, a certificate/binder was not sufficient proof for us to close, nor was a quote for builder's risk. I explained that we must have either 1) declarations page for each or 2) completed application plus proof of payment.

She said 1) NFIP does not provide flood for structures that haven't been built or are not complete and the builder's risk covers the buildings while under construction, 2) they could provide a binder of coverage until the policy is available, 3) they could provide a certificate and proof of payment.

I responded again this time giving links to the FAQs, quote from FEMA memo W-13013, and gave her FAQs 20-23 reiterating what we are required to follow - the fact that binders/certificates are not sufficient, and copied the FAQs to her that state insurance is available prior to construction and that is what we require. Just don't know what else I can do - but we seem to both be digging in.

Direct her to the NFIP Manual for agents. The National Flood Insurance Program (NFIP) Flood Insurance Manual is used primarily by insurers and agents selling and servicing Federal flood insurance.

http://www.fema.gov/media-library-data/1...508_nov2015.pdf

General Rules, Page GR-5

8. Buildings in the Course of Construction
NFIP rules allow for the issuance of an SFIP to cover
a building in the course of construction before it
is walled and roofed. These rules provide lenders
with an option to require flood insurance coverage
at the time that the development loan is made to
comply with the mandatory purchase requirement
outlined in the Flood Disaster Protection Act of
1973, as amended. The policy is issued and rated
based on the construction designs and intended
use of the building.

Buildings in the course of construction that have
yet to be walled and roofed are eligible for coverage
except when construction has been halted for
more than 90 days and/or if the lowest floor used
for rating purposes is below the BFE. Materials or
supplies intended for use in such construction,
alteration, or repair are not insurable unless they
are contained within an enclosed building on the
premises or adjacent to the premises.

To determine the eligibility of a residential
condominium building under construction, see the
Condominiums section of this manual.

Thank you!

Interesting response I received after I sent that to her:

"Thanks. We are very familiar with NFIP. I have spoken with them and they agreed you do not write a policy before the building is constructed. We are trying a work around to satisfy your needs but this is definitely not beneficial to our client."

She has no idea what she is talking about. Who know what she asked the NFIP. Banks have been obtaining insurance on constructions loans for many years.

I built my house in a SFHA and had a policy BEFORE I closed the loan. It's based on estimated elevation and estimated value. As Kathleen stated, this is not new. It's apparently new to this agent, however.

"It's definitely not beneficial to our client"? What?!? Leaving it uninsured is? I'd tell the borrower to find a new agent.

Ditto. No insurance - no loan. Your borrower has no choice but to find an agent that knows what they are doing.