Determining the Flood Premium & Disclosing on GFE

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Question:

How do we determine the amount of the flood insurance premium when disclosing the premium on the Good Faith Estimate? When we prepare the GFE we don't have much more than the flood zone designation. Every insurance agent I question asks for the elevation of the property.

Answer:

The GFE is an estimate. Ask an insurance agent to give you the premium per $1000 for a Zone A policy. You can then calculate the insurance premium based on the size of loan or insurance limit (estimated appraisal or FEMA maximum). This should be adequate information for the GFE.

First published on BankersOnline.com 8/25/08