We have a borrower who is required to provide proof of sufficient flood insurance coverage. They just submitted a hazard policy with a flood endorsement. The policy goes into detail about what constitutes a flood and that the flood coverage is compliant with the NFIP guidelines. However, we are not used to seeing combined policies like this outside of a condo. When we asked for a specific flood policy the borrower stated that was it. Has anyone seen this before and is it compliant with FDPA?

As always, thank you in advance!

Is this a mobile home?

Sorry it took a bit to get back to you. No, it is not a mobile home.

We thought that it might be ok but there is no additional info on the policy that we need like the coverage amount, the flood zone, etc. you know, the important things?

Well, if it is private insurance, then you won't have zones, etc. But not knowing the coverage amount would be problematic. The acceptable of private policies currently is left to the discretion of the bank. If you are not comfortable with the policy, just tell them you won't accept it.

Ok, I was reading another post where you all mention the acceptance of the private policies is left to the Bank. So totally following you there. It sounds like they are going to have to reach out to the insurance co for more info. Thanks again!

Please clarify this scenario: We hold a first lien on a property in a flood zone. There is a 2nd lien with another institution. We are only need to be concerned about our loan and coverage, correct? If the tables were turned and we were the 2nd lien holder, we would want to cover both loans, correct? Thanking you in advance -

Correct on both accounts.

For instances where the property and contents securing the loan are in a SFHA we look to the Declaration Page as evidence of insurance. To protect the Bank's interest for safety and soundness the Bank must be named as Mortgagee for 1st and/or 2nd mortgage and the Bank must be listed as Lender Loss Payee for contents coverage.

Does the Bank have to be named as Mortgagee and Lender Loss Payee on the Declaration Page?

I have a instances where the bank is NOT correctly named/listed on the Declaration Page but is named and listed correctly on the Acord 28 Evidence of Commercial Property Insurance for Commercial Real Estate and Acord 27 Evidence of Property Insurance for Residential properties.

Is the Bank's interested protected if it named/listed correctly on the Acord 28 or Acord 27 or it must be named/listed correctly on the Declaration Page?

I asked around and I can't seem to get a straight answer and we don't have a insurance expert on staff. Thank you in advance for your help.

Since a NFIP policy is not underwritten by the insurance company or agent, these certificates on NFIP policies are basically worthless. Especially the Acord 27 - read the disclaimer at the top. If it doesn't exist on the declaration page, it doesn't exist.

Its difficult to tell with the facts given, but if there is an RCBAP or private market Flood policy on a condo association, an Acord Evidence of Commercial Property and a Certificate of Flood (Acord) may be all you get with the mortgagee clause listed. Unit owner mortgagees are not listed on association declarations pages. The association is the named insured.
Perhaps that is what is causing confusion with some that have to be listed on the dec page and others that don't.