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Late Payments of Hazard/Wind Insurance

Answered by: 
Kathleen Blanchard
Randy Carey

Question: 
We do not escrow insurance at our bank. We have several customers and businesses who continually neglect to pay for their hazard or wind insurance on time. Is it permissible to require these customers to submit proof of 12 months paid insurance as a requirement of not force-placing insurance on their loans?
Answer: 

Answer by Randy Carey : It would be all a matter of your loan contract with the customers.

Answer: 

Answer by Kathleen Blanchard: You should also check the terms and conditions of any errors and omissions policy the bank maintains to cover it on uninsured properties. The bank's obligations for proof of insurance from customers, if any, will be spelled out.

First published on BankersOnline.com 5/16/11

First published on 05/16/2011

Filed under: 
Compliance
Filed under compliance as: 
Escrow
IT

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