For construction loans, flood ins is required to be in place no later than the start of construction....and there is a 30 day waiting process required for NFIP policies obtained for properties under construction to become effective...so how do others handle ensuring that the borrower has obtained flood insurance when construction starts, given the inherent difficulty in monitoring when construction ACTUALLY starts as opposed to starting when the lender is told it will start? We will force place once we find out construction has started and no ins is in place, which will still result in a potential violation of law if construction has started with no flood ins in place----is this others' experience as well?

.so how do others handle ensuring that the borrower has obtained flood insurance when construction starts,

They require proof of insurance before the loan closes.

I second what Randy stated. We require the insurance be in place before the loan closes.

I concur with the others. The customer (and loan officer) may not like it, but it's the only way to ensure you're protected unless someone is going to constantly monitor the project.

I've also had many an argument with insurance agents who state that they can't write a policy until construction begins. This isn't true.

That is what our lender services group is stating...that the builder cannot obtain a flood policy until construction begins...Do you have any resource I could share that states one can get a flood ins policy before construction begins?

They would buy a provisionally rated policy that would be adjusted once the elevation certificate is obtained. The premium (refund or extra charge) would be applied at that time.

thank you!