Boy, there's sure to be trouble! This article talks about all the small business owners without flood insurance. They are in a flood zone, and they have loans, so why don't they have lender required coverage? Something stinks.

The only one who specifically says they have a loan has an equipment loan, no real estate so no requirement for flood insurance. Banks only look at flood insurance from a regulatory perspective, not a risk perspective, so only require it when they are forced to by law. This shows the follow in that idea.

We noticed that our flood insurance vendor did not send the 45 day letter to customers with flood insurance policy's that have recently expired in NY. They suspended for 30 days due to Hurricane Sandy and NY Department of Financial Services suspending some insurance laws. NY Dept of Fin Services

After some additional research I located a memorandum from FEMA (w-12091) that extends the 30 day grace period to pay the premium from the flood insurance policy expiration date an additional 30 days. FEMA Memorandum

Has anyone seen this before and how would a lender comply with the 45 day force placement requirement? Would the date the lender sends the letter be 30 days from the expiration date?

I would think not. I would send the letter. The fact that they have an additional grace period only means that if they pay at a later date, the policy will be retroactive and then you would retroactively cancel any force placed policy. If they do not pay, then you would end up with an uninsured loan for more than 45 days and a violation.

Thank you for your quick response.

That makes sense for the grace period.

The NY moratorium prohibits the termination, cancellation, or non-renewal of a covered policy for 30 days. For loans in NY would the letter be sent on the actual expriation date or 30 days later? That is what the flood insurance vendor is doing now.

I would be in direct contact with my regulatory agency for guidance on this subject. It is a very unique situation.

Thank you. I will contact our regulatory agency.