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Protecting Collateral- Hazard and Flood Policy

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Question: 
One of our borrowers is an owner of one unit of a condo. The Flood policy is taken by the Condo Association and they are refusing to name my bank as one of the 'loss payee' on the Hazard and Flood policy. In case of a fire, how can we insure that our interest in collateral is protected and the condo association provides the proportional insurance money relating to our collateral to us?
Answer: 

The Flood policy is taken by the Condo Association and they are refusing to name my bank as one of the 'loss payee'.

That is true under the NFIP program. I can't answer about the other hazard insurance, as that would be up to the insurance agency. But, condo unit owners are not insured individually, the association is insured as a whole.

First published on BankersOnline.com 8/29/11

First published on 08/29/2011

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