Flood

The civil money penalty for a flood insurance violation increased from $350 to _________, and there is no longer an ____________ on flood penalties.

-$2,000 -annual cap

The Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) premiums can increase as much as _____ annually until the premium rate reflects the _____________.

-25% -full risk rate

Congress passed the _________________ in _________.

-National Flood Insurance Act -1968

It is lower than either the outstanding ________________ of the loan or the __________________ of insurance available from the NFIP.

-principal balance -maximum amount

Three facts about a NFIP standard flood insurance policy:

1. single-peril policy 2. Pays for direct physical damage to your insured property up to the Insurable value subject to the policy limits​ 3.Personal Property coverage, also known as contents coverage, is not included with building property coverage

What are the four financial institutional obligations?

1.Determine whether the building is or will be located in an SFHA​ 2.Document the flood hazard determination​ 3.Require that flood insurance, if required, is obtained to the appropriate limit​ 4.Ensure that required flood insurance is maintained for the term of the loan or added if the property is subsequently determined to be in an SFHA

What are the three components of the NFIP?

1.to provide flood insurance, 2.floodplain management and 3.flood hazard mapping

More than ___________ communities across the country participate in the program.

20,000

RCV Notification Letter is required every ___________ years.

3

Policyholders must wait _________ before their policy takes effect​.

30 days (To prevent people from putting off the purchase of coverage until waters are rising and flooding is inevitable​)

Notice of change of servicers must be done within ____ days of change effective date​

60

Occupied by less than ________ residential units and is not eligible for RCBAP

75%

There is no _________________ in standard flood policies

Additional Living Expenses (ALE)

_______________ most commonly used commercial loan structure in the U.S.

Best Efforts

In July 2012, the U.S. Congress passed the ________________________.

Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12)

What is a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties?

Flood

MIRE stands for

Making Increasing​ Renewing​ Extending

The National Flood Insurance Act created the ____________________, which was designed to stem the rising cost of taxpayer funded relief for flood victims and the increasing amount of damage caused by floods

National Flood Insurance Program (NFIP)

A loan offered by a group of lenders referred to as a ______________.

Syndicate loan

A triggering event related to a commercial loan that mandates review of the location of the property/properties to determine if flood insurance coverage is required on the loan.

Tripwire

Private flood insurance is available for those who need additional insurance protection or for people whose communities do not participate in the NFIP​, known as ___________________.

excess coverage, which is over and above the basic policy

Water that comes from the bottom up, such as an overflowing stream, river or lake caused by melting snow is covered by?

flood insurance

The back-up of sewers and drains may be covered under a _____________________.

home insurance policy, or a rider to an insurance policy

Water that comes from the top down is covered by _________________________.

homeowners or renters insurance

The Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) implements __________________ through a phase out of subsidies and discounts on the insurance premiums.

increases in premiums

NFIP coverage is ____________ outside of the high-hazard areas.

also available

Coverage for the contents of basements is ___________.​

limited

Federal flood insurance is only available where __________________ have adopted adequate floodplain management regulations for their floodplain areas as set out by NFIP.

local governments

A flood zone determination must be made or obtained whenever a federally regulated lender _______, _______, ___________ or _________ a loan secured by a building or mobile home.

makes, extends, increases or renews

Flood coverage is available from the National Flood Insurance Program (NFIP) and _________________.​

private insurers

Insurable value approaches/methods?

•Appraisal based on cost-value approach​ •Construction-cost calculation​ •Insurable value used in hazard policy​ •Any other reasonable approach that can be supported

The NFIP offers commercial policyholders coverage for:

•Building Property up to $500,000 ​ •Personal Property up to $500,000 ​

Residential Condominium Building Association Policy (RCBAP)​

•If insured for at least 80% of its replacement cost value at the time of loss or maximum limit there is no coinsurance penalty​ •RCBAP automatically provides Replacement Cost (RC) loss settlement for the building elements​ -The maximum available building coverage is the replacement cost value of the building and its supporting structure or up to $250,000 per unit times the number of units, whichever is less

Lenders must accept private flood insurance if:

•Insurer meets state department of insurance requirements​ •Surplus Lines insurer must be recognized by the state department of insurance​ •Must be as broad as the NFIP policy​ •45-day cancellation and/or non-renewal notice​ •Information has been provided about the availability of flood coverage under the NFIP​ •Must contain similar NFIP mortgage interest clause​ •Provision requiring insured to file suit within one year after claim denied​ •Cancellation provisions as restrictive as SFIP under

Lenders are required to force place insurance if all the following occur:

•Lender determines collateral is in SFHA​ •Flood insurance is available under the Act​ •Lender determines coverage is inadequate or non-exist​ •After required notice, borrower fails to purchase appropriate amount of coverage

Two methods to determine insurable value:

•Replacement Cost Value (RCV)​ •Actual Cost Value (ACV)​

A Flood can cause a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties from

•overflow of inland or tidal waters​ •unusual and rapid accumulation or runoff of surface waters from any source​ •mudflow or collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels​