My home loan was recently taking over by another bank, this took place during the bail out of all the banks. I live in a 100 year flood zone, even though it is just a creek…I carry flood insurance. it is an amount that will cover the balance of my loan if my house is ever flooded. The bank that now has my loan is mandating that I carry the same amount of flood insurance on my home as my homeowners insurance. I carry 106,000.00 flood insurance that cost me $ 828.00 a year, the bank wants me to carry $ 192,000.00 of flood insurance; which is going to cost me $ 1123.00 a year for the next 11 years.,…My question is as a homeowner do I have the right to refuse this, the bank has told me this is their policy. According to National Insurance Flood Program (NFIP) the guide lines are as follows…The amount of flood insurance coverage required by the Flood Di aster Protection Act of 1973, as amended by the National Flood Insurance Reform Act of 1994, is the lesser of the following..
.1. The maximum amount of NFIP coverage available for the particular property type.
2. The outstanding principal balance of the loan, or
3. the insurable value of the structure.
I read these guidelines to the person I talked to and she informed me it was the banks policy that I carry the same amount of my homeowners insurance…My next comment was, “You are telling me I have no choice but to purchasing the extra flood insurance, or you will purchase it for me and send me the bill?” Her answer was yes. Oh, I forgot to mention that the flood insurance company was a subsidiary of their bank…..and they stood to gain from sell me the insurance.
Ok I know long and drawn out….my question do I have the right to refuse this, I carry enough insurance to cover the principal balance..how can they tell me that I need to carry this or else…
Does anyone have any advice about what to do about this……I have purchased addition insurance , but though my insurance company not theirs….