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#2173547 - 04/13/18 06:04 PM Coverage Gap
George Offline
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Registered: 04/22/16
Posts: 352
What happens if we have a customer who let their flood policy lapse and we don't force place until after the 45 day period, and there ends up being a flood?

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Flood Compliance
#2173552 - 04/13/18 06:34 PM Re: Coverage Gap [Re: George]
rlcarey Offline
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Registered: 07/16/01
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Loc: Galveston, TX
You are probably going to end up with a worthless property as collateral.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2174882 - 04/24/18 12:35 PM Re: Coverage Gap [Re: George]
George Offline
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Registered: 04/22/16
Posts: 352
Sorry, I just now remembered I asked this question. So, would it be best practice, then, to force place immediately rather than wait? And then that way we are covered IF something happens?

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#2174903 - 04/24/18 01:29 PM Re: Coverage Gap [Re: George]
rlcarey Offline
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Registered: 07/16/01
Posts: 67912
Loc: Galveston, TX
If it is a NFIP policy, the mortgagee is covered for an additional 30 days, but I would definitely be force placing sometime before that period expires.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2174909 - 04/24/18 01:47 PM Re: Coverage Gap [Re: George]
George Offline
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Registered: 04/22/16
Posts: 352
Thank you sir, I appreciate it! Let me ask this real quick as a follow up: If we force place before the end of the 45 days (let's just say immediately after policy expiration) and the customer ends up providing their own coverage, then the bank has to eat any charges incurred for the force placed policy, correct?

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#2174912 - 04/24/18 01:58 PM Re: Coverage Gap [Re: George]
Dan Persfull Offline
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Registered: 08/28/02
Posts: 45111
Loc: Bloomington, IN
Only the cost for the period that the coverages overlap.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2174913 - 04/24/18 02:01 PM Re: Coverage Gap [Re: George]
rlcarey Offline
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Registered: 07/16/01
Posts: 67912
Loc: Galveston, TX
Yes, but most force placed policy providers allow you to cancel as of the date of force placement or some other retroactive date when a borrower policy is provided and not incur any charges for the period the property was otherwise covered by a borrower policy.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2175003 - 04/24/18 05:34 PM Re: Coverage Gap [Re: George]
George Offline
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Registered: 04/22/16
Posts: 352
Thank you both for you help, I appreciate it!

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