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Private Flood Insurance Policy or NFIP Policy?

Answered by: 
Dan Persfull

Question: 
In cases where flood insurance coverage is mandatory, must a lender accept a private flood insurance policy that meets the six requirements set forth in the FEMA Guidelines? Or may a lender require their borrower to purchase an NFIP policy?
Answer: 

Unless state laws prevail you are never mandated to accept an insurance policy you are not comfortable with.

However, if the private policy meets the requirements and is already in place why would you want to put your borrower through unnecessary expense?

First published on BankersOnline.com 3/12/12

First published on 03/12/2012

Filed under: 
Lending
Filed under lending as: 
FEMA
Flood

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