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#2232806 - 03/11/20 06:33 PM Builders Risk Policy with Flood for Construction?
R Law Offline
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Joined: Nov 2014
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Can Lender accept Builders Risk Policy with Compliance Aid clause? However, the builders risk policy has $100,000 deductible which is higher than $50,000 for NFIP policy. Can a policy with compliance aid clause also has deductible higher than $50,000?

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Flood Compliance
#2232809 - 03/11/20 06:51 PM Re: Builders Risk Policy with Flood for Construction? R Law
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 78,620
Galveston, TX
I would be contacting your State Department of Insurance.

(ii) Compliance aid for mandatory acceptance. A member bank may determine that a policy meets the definition of private flood insurance in paragraph (b)(9) of this section, without further review of the policy, if the following statement is included within the policy or as an endorsement to the policy: “This policy meets the definition of private flood insurance contained in 42 U.S.C. 4012a(b)(7) and the corresponding regulation.”

If it contains that statement, they are warranting that they meet the requirements and deductible are one of those items.

(C) Contain deductibles no higher than the specified maximum, and include similar non-applicability provisions, as under an SFIP, for any total policy coverage amount up to the maximum available under the NFIP at the time the policy is provided to the lender;
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#2249531 - 02/22/21 06:38 PM Re: Builders Risk Policy with Flood for Construction? rlcarey
Fiddlesticks Offline
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Tagging onto this older thread. So a builders risk policy is considered a "private" policy and needs to meet the requirements for private policies?

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#2249533 - 02/22/21 07:07 PM Re: Builders Risk Policy with Flood for Construction? R Law
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 78,620
Galveston, TX
That would be correct.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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