Skip to content
 

Flood Insurance Shortfall

Answered by: 
Dan Persfull

Question: 
We have a loan in a flood zone and the loan balance is $37,000.00, but there is only $16,600.00 in flood insurance. We have sent the notice about the shortage of insurance and still no additional flood insurance has been purchased. Should we force place flood insurance for the full amount of the balance or only the difference between the loan balance and the flood insurance purchased by the customer? Can we have two insurance policies on one property?
Answer: 

This depends who force places your insurance for you. If you use the NFIP you can only have one policy per structure. If you use a private underwriter they can write multiple policies. Either way, you must obtain a minimum coverage of $37,000, assuming of course the balance is the lesser of the structure's value.

First published on BankersOnline.com 7/16/07

First published on 07/16/2007

Filed under: 
Lending
Filed under lending as: 
Flood
Policies

Report a problem with this page

Search Topics