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.
Published
2021/05/07
David Dickinson
David’s banking career began as a field examiner for the FDIC in 1990. He later became a Compliance Officer and Loan Officer for a small bank. In 1993, he established Banker’s Compliance Consulting. Along with his amazingly talented Team, he has written numerous compliance articles for prestigious banking publications and has developed compliance seminars that Banker’s Compliance Consulting produces.
He is an expert in compliance regulations. He is also a motivational speaker and innovative educator. His quick wit and sense of humor transforms the usually tiring topic of compliance into an enjoyable educational experience. David is on the faculty of the American Bankers Association National Compliance Schools and has served on the faculty of the Center for Financial Training for many years. He also is a frequent speaker at the ABA’s Regulatory Compliance Conference. He is also a trainer for hundreds of webinars, is a Certified Regulatory Compliance Manager (CRCM) and has been a BankersOnline Guru for many years. The American Bankers Association honored David with their Distinguished Service Award in 2016.
David and his wife Karen have three adult children, four grandchildren (none of whom live at home!) and two cats (of which Dave is allergic … the cats, not the children!). They recently moved to an acreage outside of Lincoln, Nebraska where he gets to play with his tractor. When possible David can be found fishing, making sawdust in his shop, or playing the guitar and piano. He also enjoys leading worship at his church.