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#467501 - 12/08/05 03:13 PM Flood - Should be Simple, But It's Not
upstateNY Offline
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Joined: Apr 2003
Posts: 933
New York State
We are experiencing more and more frequent situations where the borrower renews his/her flood insurance policy for an amount that is inadequate under the NFIP rules. We fully comply with the notification requirements, but are faced with a dilemma when the customer refuses to increase the coverage. FEMA will not write a second policy on the property, so we are not able to forceplace for the additional amount. We can't cancel the customer's policy and forceplace for the full amount. If push comes to shove, we may have to proceed to forclosure action. However, the problem remains...the property is under-insured. Any suggestions?

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#467502 - 12/08/05 04:26 PM Re: Flood - Should be Simple, But It's Not
GreatBlue Offline
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GreatBlue
Joined: Feb 2003
Posts: 2,362
Colorado
How about private insurance to cover the deficit?
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#467503 - 12/08/05 04:40 PM Re: Flood - Should be Simple, But It's Not
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,765
Bloomington, IN
Quote:

How about private insurance to cover the deficit?




That's what we do. And when the borrower calls in to complain about the high premium we give them two choices, get the proper coverage on their own or pay off the loan. They normally opt to get insurance on their own.
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#467504 - 12/08/05 07:47 PM Re: Flood - Should be Simple, But It's Not
Sound Tactic Offline
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Sound Tactic
Joined: Feb 2005
Posts: 5,349
that is a good idea, I like that
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#467505 - 12/08/05 08:22 PM Re: Flood - Should be Simple, But It's Not
upstateNY Offline
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Joined: Apr 2003
Posts: 933
New York State
Quote:

How about private insurance to cover the deficit?



The implication then is that we can obtain coverage for the deficit from a private company (not FEMA)? I was not aware of that.

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#467506 - 12/08/05 08:27 PM Re: Flood - Should be Simple, But It's Not
The Incredible ComplyGuy Offline
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The Incredible ComplyGuy
Joined: Sep 2005
Posts: 7,350
The he11 of suburbia
You can also get a blanket policy to cover the bank's risk.

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#467507 - 12/08/05 08:36 PM Re: Flood - Should be Simple, But It's Not
upstateNY Offline
Platinum Poster
Joined: Apr 2003
Posts: 933
New York State
Quote:

You can also get a blanket policy to cover the bank's risk.



Don't think this would work for flood insurance where we need to have coverage specific to the particular piece of property.

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