FEMA Forced-Placed Policy for Lender Purchase

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Question:

FEMA's forced-placement requirements states that the lender shall purchase the insurance on the behalf of the borrower but does that mean to include that the borrower is to be a named insured on a forced-placed policy? Many independently purchased insurance coverages are provided for the banks interest only.

Answer:

does that mean to include that the borrower is to be a named insured on a forced-placed policy?

Yes

Many independently purchased insurance coverages are provided for the banks interest only.

Those types of policies do not comply with the flood insurance requirements.

First published on BankersOnline.com 5/13/13