What is flood insurance?

Unlike a standard homeowner's policy, flood insurance covers losses to your property caused by flooding. Some of the things a standard flood policy will cover include: Structural damage to the building and its […]

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How much does flood insurance cost?

Flood insurance premiums vary and are calculated based on several factors. These include: Year of building construction Building occupancy Number of floors The location of the contents in the building The flood risk […]

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When I bought my home, it was not in a Special Flood Hazard Area (SFHA), but when I refinanced my mortgage, the bank said I had to buy flood insurance because the flood maps had changed. Can the bank require me to buy flood insurance?

Yes. If the bank learns that a flood map revision places a property in a SFHA in which flood insurance is available under the National Flood Insurance Act (NFIA), the bank may not make, increase, extend, or renew any […]

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The bank said I need flood insurance, but I do not believe my property is in a flood area. What can I do?

If you believe that the flood map used by your bank incorrectly identified your property as being in a Special Flood Hazard Area (SFHA), you and the bank may jointly apply to the Federal Emergency Management Agency (FEMA) […]

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My home is no longer in a Special Flood Hazard Area (SFHA) due to a change in the flood maps. Will I be required to maintain flood insurance?

It depends. The lender is no longer obligated to require mandatory flood insurance under the federal flood insurance laws. However, if permitted by the contract, the lender may continue to require flood insurance coverage […]

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Does the National Flood Insurance Act (Act) apply to loans that are being restructured or modified?

It depends. If the loan being restructured or modified meets the definition of a "designated loan," the Act would apply to that loan. A designated loan is a loan secured by a building or mobile home that is located or is […]

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The loan balance on my home has decreased over the years so that I now owe $50,000 on my home. I have a new servicer and it is requiring that my flood insurance be increased. My present policy satisfies the minimum flood insurance requirement. Can my lender require more flood insurance than the minimum required?

In most circumstances, yes. Lenders are permitted to require more flood insurance coverage than the minimum amount required by the National Flood Insurance Act (Act). If the flood insurance requested by the lender is […]

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The cost of my flood insurance policy has increased. I would like to increase my deductible to reduce the cost of flood insurance. Is this possible?

It may be possible. You would need to discuss this with your lender. A lender should take into account the risk that an increased deductible would pose to the borrower and lender. Lenders should determine the […]

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My building is located in a Special Flood Hazard Area (SFHA) and the lender told me that I will be required to purchase flood insurance. Can I be exempt from the requirement to purchase flood insurance?

You can be exempt from purchasing flood insurance for a building or mobile home in an SFHA only if the original principal balance of your loan is $5,000 or less and the original repayment term of the loan is one year or […]

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My condominium is on the fifth floor of a multi-story building located in a Special Flood Hazard Area (SFHA). Is my loan subject to the regulatory requirements for flood insurance?

Yes. The mandatory flood insurance purchase requirements apply to loans secured by individual residential condominium units. This includes those units located in multi-story condominium complexes that are located in an SFHA […]

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What is a National Flood Insurance Program (NFIP) Residential Condominium Building Association Policy (RCBAP)?

The RCBAP is a master flood insurance policy issued by the Federal Emergency Management Agency (FEMA) for residential condominiums. To meet the definition of a residential condominium building and be eligible for coverage […]

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My home is located in a Special Flood Hazard Area (SFHA). I am thinking about obtaining a home equity loan. Will I be required to have flood insurance?

Yes. Flood insurance will be required if the home equity loan is secured by a building or mobile home located, or to be located, in an Special Flood Hazard Area (SFHA) in which flood insurance is available under the […]

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I recently obtained a loan for $10,000 and made several home improvements. The lender decided to take a security interest in my home, but only as a precaution. My home is in a Special Flood Hazard Area (SFHA). Will I be required to have flood insurance?

Yes. If the lender takes a security interest in a building or mobile home in an SFHA in which flood insurance is available under the National Flood Insurance Act (NFIA), then flood insurance is required. The NFIA makes no […]

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When can lenders or servicers charge the borrower a fee for making a flood zone determination?

There are four instances under the National Flood Insurance Act (NFIA) when the lender or servicer can charge a fee for a flood determination: When the determination is made in connection with the making, increasing, […]

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I plan to obtain a home equity loan. My property is in a Special Flood Hazard Area (SFHA). Will this affect my current flood insurance policy?

It depends. When you obtain the home equity loan, the lender must ensure that adequate flood insurance is already in place or require that additional flood insurance coverage be added to your existing flood insurance […]

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Why is the bank requiring escrow of the flood insurance premiums and fees in connection with my mortgage loan?

If a bank makes, increases, extends, or renews a loan secured by a residential property, and the property is required to have flood insurance under the National Flood Insurance Act, then the bank, or servicer acting on its […]

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I applied for a mortgage loan, and the bank is forcing me to buy flood insurance. Can the bank do this?

If your home is located in a Special Flood Hazard Area (SFHA) in which flood insurance is available under the National Flood Insurance Act (NFIA), then any federally regulated lender will require you to purchase flood […]

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The bank force-placed flood insurance on my property. What is the amount of insurance required to be placed?

Under the Act, the mandatory flood insurance purchase amount for a one- to four-family, non-condominium residential structure is the lesser of the outstanding principal balance of the loan(s), or the maximum amount of […]

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I received a letter from my bank stating I am required to have flood insurance for my property and the amount of the policy I presently have is not sufficient. The letter stated that the bank intends to force-place a policy if I do not provide proof of sufficient coverage. Can the bank do that?

Yes. The bank, or the servicer acting on behalf of the bank, is required by law to purchase flood insurance on the borrower's behalf (that is, force-place) if ALL of the following circumstances occur: The bank determines […]

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Flood maps for my community have changed and my home is now located in a Special Flood Hazard Area (SFHA). I am now required by my lender to have flood insurance. I read that I may be eligible for a lower rate on my flood insurance policy, is that true?

Yes. If your property was newly mapped into an SFHA, you may be eligible for a lower rate through FEMA's Newly Mapped Procedure. In the first year after a map revision, this option provides the lower-cost Preferred Risk […]

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