Increases in RCV

Posted By: AuditorK

Increases in RCV - 10/07/11 03:08 PM

As we receive renewals for hazard insurance coverage, and the RCV increases over time so hazard insurance coverage amounts increase, do we need to also go back to the customer and require an increase in flood coverage to coincide? Or are we okay if at inception we had enough flood insurance to cover the RCV, even though now our coverage is below RCV?
Posted By: CRA Padawan

Re: Increases in RCV - 10/07/11 04:58 PM

My understanding is that the flood insurance would need to increase as well.
Posted By: AuditorK

Re: Increases in RCV - 10/07/11 06:10 PM

I don't doubt you timd0802, but this is crazy if true. We have some (actually I think most) hazard insurance policy RCVs that increase every year. So we are to contact the customer every year and say, "Oh by the way, we need you to up your flood insurance coverage by $5,000 again."
Posted By: RR Joker

Re: Increases in RCV - 10/07/11 08:15 PM

You are okay until you MIRE the loan, IMHO. YOu are not obligated to monitor your files.
Posted By: AuditorK

Re: Increases in RCV - 10/07/11 08:24 PM

I remember reading that in the preamble to the 2009 Interagency Q&As. It said you didn't have to have a monitoring process, but if you became aware, you had to address it. We don't have a process of comparing, but we had a loan officer see the difference and bring it up. Is that "becoming aware"?
Posted By: David Dickinson

Re: Increases in RCV - 10/10/11 06:14 PM

I don't think you need to think about the amount of flood insurance unless you MIRE the loan (as Joker stated). Otherwise, every year when hazard insurance renewals are received, the bank would have info to become "aware".