There are a lot of things to consider and comply with when you have a loan that requires flood insurance. Not only do you need to provide the required notice and have the borrower obtain an adequate amount of insurance, you must also ensure the deductible for the policy is in line. This starts to step outside your compliance requirements a bit and moves in on your safety and soundness considerations.
Jerod explains more in the video.
Video Highlights:
- Flood Insurance is like other types of insurance. As the deductible increases, the premium amount decreases.
- You cannot allow a deductible greater than the required amount of flood insurance.
- You must consider the borrower's ability to withstand a higher deductible, as this may present safety and soundness risks.
Published
2023/05/03
