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#2230989 - 02/13/20 06:05 PM Proof of Purchase/ New Flood Policy
parr04 Offline
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Posts: 377
oklahoma
Borrower has provide a document from his insurance company titled "Federal Emergency Management Agency Certificate of Proof of Purchase of Flood Insurance". It shows the coverage amount applied for, the property address and says premium paid.

Does not mention the flood zone, deductible or the policy period. It also says in small print "subject to underwriting approval".

The insurance company is saying this is all they have to provide.

I do not think this is enough information to close the loan.

Am I overthinking this?

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Flood Compliance
#2230992 - 02/13/20 06:17 PM Re: Proof of Purchase/ New Flood Policy parr04
Skittles Offline
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Skittles
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Posts: 13,957
TN
I would agree with you that it is inadequate.
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#2231000 - 02/13/20 07:00 PM Re: Proof of Purchase/ New Flood Policy parr04
Dan Persfull Offline
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Dan Persfull
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Posts: 46,416
Bloomington, IN
Certificates are not acceptable proof of coverage for new NFIP policies.

VIII. POLICY EFFECTIVE DATE
A. Evidence of Insurance
A copy of the Flood Insurance Application and
premium payment, or a copy of the declarations
page, is sufficient evidence of proof of purchase
for new policies. The NFIP does not recognize
binders. However, the NFIP recognizes
Certificates of Insurance for renewal policies.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2257980 - 08/10/21 06:16 PM Re: Proof of Purchase/ New Flood Policy Dan Persfull
TeamComply Offline
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Posts: 393
This is still current information, correct? And Dan you reference "VIII. POLICY EFFECTIVE DATE" with additional information, can you specify where this information can be found? As we are dealing with this exact scenario. Thanks.

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#2257985 - 08/10/21 06:37 PM Re: Proof of Purchase/ New Flood Policy TeamComply
Dan Persfull Offline
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Dan Persfull
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Posts: 46,416
Bloomington, IN
That was taken from the 2008 Flood Insurance Manual.

The April 2021 Manual states the following:

VII. Evidence of Insurance
A copy of the Flood Insurance Application and premium payment or a copy
of the declarations page is sufficient evidence of proof of purchase for
new policies.

And then there is this .
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2257994 - 08/10/21 07:02 PM Re: Proof of Purchase/ New Flood Policy parr04
TeamComply Offline
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Posts: 393
Thanks so much Dan! And is there any similar guidance for private policies?

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#2258001 - 08/10/21 07:37 PM Re: Proof of Purchase/ New Flood Policy parr04
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,416
Bloomington, IN
I'm not aware of any such guidance for private policies since they are not NFIP policies. As a best practice we do follow the above guidance for private policies.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2258008 - 08/10/21 08:12 PM Re: Proof of Purchase/ New Flood Policy parr04
COMPL101TX Offline
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Joined: Apr 2018
Posts: 77
Since you have to determine whether a private policy meets the definition of private flood insurance (either by having the compliance aid statement on the declaration page, on the policy, or by a full review of the policy), I don't see how you could accept a "copy of the Flood Insurance Application and premium payment."

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#2258009 - 08/10/21 08:15 PM Re: Proof of Purchase/ New Flood Policy parr04
TeamComply Offline
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Joined: Aug 2016
Posts: 393
Thank you both. Makes sense.

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