Flood Insurance Basics

Are you new to the flood insurance requirements?  Or, do you just need a refresher?  If you have questions we will get you answers!  This webinar will cover a variety of topics from flood determinations and required flood insurance coverage to force placement and escrows.  You will be on the right track in no time.

Here are a few questions we’ve received:

Question:  Our vendor makes us pull a separate flood determination for each structure on a property, is this correct?

Answer:  It’s not wrong but it’s also not required per the Regulation.  The flood rules do not require a separate determination for each structure on the same property; however, if there are multiple structures located within a Special Flood Hazard Area, you would be required to get a separate flood insurance policy for each structure.

Question:  If an appraisal assigns a structure located in a Special Flood Hazard Area as having “no value”, do we have to obtain flood insurance?

Answer:  We’d be very cautious about saying a structure has “no value”.  While it may not add any value to a transaction because it’s in poor condition or isn’t used anymore, most structures or at least the building materials do have some value.  It’s likely the value may be less than the lowest possible flood insurance deductible but you must still come up with a reasonable determination of the value and support it.  The flood rules indicate you (the lender) are to assign a “good faith determination” of value.  Just because the appraisal doesn’t assign a value, that doesn’t relieve you of assigning a value.


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