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#2254417 - 05/26/21 12:23 AM Excess Private Insurance
TryingtoComply Offline
Diamond Poster
Joined: Apr 2013
Posts: 1,826
The West
Borrower's loan amount is $245K. RCV is $840K. Borrower has private insurance for $250K.

The story on this is that the loan was refinanced from $391K to $254. When the loan amount was $391K, they purchased a policy for $250K as that is what we required. When they refinanced, they kept the same policy and it has since renewed. I have no idea if having extra insurance was a conscious decision on their part.

With a private policy is it acceptable for the borrower to have insurance in excess of the loan amount if not required by the bank?
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Flood Compliance
#2254418 - 05/26/21 11:07 AM Re: Excess Private Insurance TryingtoComply
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,548
Galveston, TX
All you care about is what you require them to maintain. As long as you only are requiring them to maintain $245K then anything else is between them and their insurance agent. If I had a house with a RCV of $840K and I was in a flood zone, I would have $840K of private flood insurance coverage. Trust me - living on Galveston Island, I have much more than the $250K NFIP limit.
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#2254449 - 05/26/21 05:08 PM Re: Excess Private Insurance TryingtoComply
TryingtoComply Offline
Diamond Poster
Joined: Apr 2013
Posts: 1,826
The West
Thanks Randy. Appreciate the response! Check that off my list!
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