Is it acceptable to close with evidence of insurance binder with condition that payment must be received within 7 days from the closing date. Bank submitting payment directly to the insurance company.

What is "with evidence of insurance binder". An insurance company or an agent cannot bind NFIP insurance. How do you have proof of coverage at closing if no payment has been submitted and if you pay through closing, how can you possibly control that the payment actually gets to where it needs to be? I always tried to avoid spinning the roulette wheel myself.

VIII. POLICY EFFECTIVE DATE
A. Evidence of Insurance
A copy of the Flood Insurance Application and
premium payment, or a copy of the declarations
page, is sufficient evidence of proof of purchase
for new policies. The NFIP does not recognize
binders. However, the NFIP recognizes
Certificates of Insurance for renewal policies.

Guys - any idea on how this might change (if any) in the world (7/1/2019) of private flood policies? Until we know for sure, I will treat it the same as NFIP rules...……………. just to be on the safe side.

An agent might be able to bind Private insurance; however, I'd still want a Dec page to show the zone, effective date, amount and the bank listed as the loss payee.

In order to accept a private policy it has to meet specific rules. Without a copy of the policy in hand, there is no way to make that determination. A binder or even a declaration page alone will be worthless in determining acceptability of a private policy.

The way I read the final rule I am in agreement with Randy in needing the policy.I see this possibly as an issue for purchase money loans. Do you think Private Flood Insurance companies will be able to issue a declaration page with an endorsement page indicating "This policy meets the definition of private flood insurance contained in 42 USC 4012a(b)(7) and the corresponding regulation."?

WABComply, I was thinking the same thing and plan to ask the regulators this question. The narrative in the final rule seems to imply there could be instances where a declaration page could be sufficient, but I would think it would most likely need to be an endorsement (based on how the rule is written).

"However, a declarations page may be insufficient for a regulated lending institution to make a determination that the institution must accept a private flood insurance policy in satisfaction of the flood insurance purchase requirement if the declarations page does not provide enough information for the institution to determine that the policy meets the statutory definition of “private flood insurance.” In these circumstances, the regulated lending institution should request additional information about the policy to aid it in making its determination."