FEMA recently issued a Final Rule that will give National Flood Insurance Program (NFIP) policyholders the option of paying their flood insurance premiums in monthly installments vs. annual premiums. This will take effect on December 31, 2024.
It’s important to note that this monthly payment option is NOT required for loans in which you require the escrow of flood insurance premiums. Additionally, this option only applies to consumers.
The biggest challenge arising with this change is monitoring in that if a consumer wants to pay monthly, you will have to monitor that the premium was paid each month. We’ve also been asked if institutions could refuse to let consumer borrowers pay their flood insurance monthly and we believe that is strong “no”.
While there is nothing that requires a lender to inform their borrowers of this new monthly payment option, you still need to be prepared as insurance agents may share it with them.
We discussed this recently at our November Monthly Connection. Have a listen:
Published
2024/11/145
