“Flood Insurance ” - Employee Training American Bank and Trust 2003
Mar 28, 2015
“Flood Insurance” - Employee Training
American Bank and Trust
2003
Introduction
Foundation of the National Flood Insurance Reform Act of 1994
Topics of Discussion
Flood Insurance - “Why should we care?”
Definitions “What must we do to
comply?”
Flood Insurance - “Why should we care?”
Flooding is the #1 natural disaster that occurs each year
Flooding is an equal opportunity offender - it affects businesses and homes alike
Flooding disasters are expensive to everyone
Definitions Participating Community
Any community that voluntarily elects to participate in the NFIP by adopting and enforcing floodplain management regulations that are consistent with the standards of the NFIP
Non-Participating Community A community in which the sale of flood insurance is not
authorized because the community chooses not to participate in the NFIP
Special Flood Hazard Area (SFHA) Identifies an area on a flood map that has a 1-percent chance of
being flooded in any given year (100-year floodplain). Over a 30-year period, the life of most mortgages, there is at least a 26-percent chance that this area will be flooded. (Any flood zone that begins with an A or V is subject to the 100-year flood).
Designated loan A loan secured by a building or mobile home located or to
be located in a Special Flood Hazard Area (SFHA) where flood insurance is available under the 1968 Act
8 Rules of Compliance Flood insurance is mandatory for buildings in Special Flood Hazard Areas as
identified by FEMA Ensure that flood insurance coverage is maintained for the term of the loan Flood zone determinations are required to establish whether a structure is
located in a SFHA Know the amount of flood insurance coverage to require Notify borrowers in writing of the requirement to buy flood insurance for new
and existing loans Escrow flood insurance premiums There is no waiting period for flood insurance to go into effect when it is
purchased in connection with the making, increasing, renewing, or extending a loan
Notify the insurance company or agent when the lender or servicer of a loan changes
“What must we do to comply?” Remember “M.I.R.E.” Ensure adequate
coverage! - (Sample form)
Monitor LOL coverage