Flood - 45 Day Notification/Waiting Period

If flooding occurs within the borrower's 30 day grace period, and they renew, they are covered by the original policy. The borrower can renew at any time within that grace period and coverage is continuous from the original date as if cancellation had not occurred.

If flooding occurred after the grace period and before force placement at 45 days, the borrower is not covered. Banks can have blanket coverage that protects the bank during this period.

I don't remember ever seeing anything that explained the reason for a 45 day wait periond, except that for MPPP policies the bank must send three notices prior to force placement. Perhaps it was felt that was sufficient time for three notices to be sent.

First published on BankersOnline.com 5/11/09