We have a commercial loan renewal that we trying to close and need increased flood coverage because the current policy in force is no longer adequate. The agency will not issue anything right now, because this property is in south Texas and hurricane Dean is in process further south. Are there any exceptions in the Purchase Guidelines that address this? I don't know of anything. Do we literally have to delay closing on this loan? I understand an insurance agent's limitations in a situation like this, but do they only have to delay issuing coverage until the hurricane passes, or are there additional time constraints during the aftermath?

You mean there's not simply an effective date delay?

No. My understanding from the agents is they cannot issue a policy, or even increase coverage in this instance, if the hurricane or path is within certain longitude/latitude parameters. Anyone else familiar with this situtation?

I've heard of it from a personal side when purchasing a home. We didn't need flood insurance, but there was the same issue with hazard insurance.

From a private company that is probably true, however I have never seen such a statement regarding flood insurance. Checking the FEMA site there is no mention of a moratorium on flood insurance underwriting due to Hurricane Dean and there is no mention of such a policy in the Flood Insurance Manual. I think the insurance agent is all wet.

Ha Ha. That's a good one

I agree. Also, when flood insurance is being written or increased in connection with making a loan there is no 30 day waiting period.

It is law the the financial institution obtain flood insurance and, as Randy said, I can't see a moratorium being put in place where financial institution could not carry out they day to day business.

There is a moratorium in writing new policies as a hurricane approaches. However, it has been my understanding that it applied to walk-in business, not insurance required due to the mortgage rules (similar to the 30 day waiting period rule).

Per the Mandatory Purchase of Flood Insurance Guidelines the 30 day waiting period is for coverage under a new contract for flood insurance and any modification to an existing flood insurance contract. This was specifically to prevent purchase of flood insurance at times of imminent flood loss. The exclusion to the 30 day waiting period is for initial purchase of flood insurance. Your situation involves an existing policy. However, pursuant to the FIA Policy Issuance #5-98 the FIA interpreted the exception to the 30 days to include refinancing, modification and increased limits at renewal.
Maybe the insurance agent needs to read the interpretation.
FEMA also says to refer to the FIA Policy Issuance for detail.
Another consideration - is the property in a coastal barrier aarea and subject to those restrictions?
My opinions are my own ant cannot be taken for legal advice.

A friend of mine who owns an insurance company says their underwriters will "freeze" or "temporary stop writing policies" when a major storm is in the area and will not begin writing policies until it has completely passed the area. Otherwise, you'd have people getting brand new policies, only paying a small portion of the premium and the insurance companies would be at risk of paying out big $$ for such a small amount they've collected.