Flood Insurance

Federal regulations state that it is mandatory for lenders to require mortgagors to carry flood insurance if the property is located in a Special Flood Hazard Area (zones A, AE, A4,AR,AR/AE, AO, VA, V12, AH, AO as designated by the Federal government). 

A determination is used to map the flood zone location of the property. 

If an escrow account is established for the hazard insurance premium or any other escrowed item, it must also include collection for the flood insurance premiums.  

Customers with questions relating to the flood determination should contact the Federal Emergency Management Agency (FEMA) at:  (800) 638-6620

Flood Insurance 

Coverage Requirement

Single Family, Multi-Family and Detached Condos and PUDs

  • Flood coverage must equal the lesser of the following:
    • 100% of the replacement value of the improvements, which is defined as the following:
      • The estimated cost new of the improvements (as listed on the appraisal, i.e. 100% of replacement cost
      • The replacement amount listed on the policy
  • The maximum insurance available under the National Flood Insurance (NFIP),currently at $250,000 for residential real estate

  • Deductible amount up to 5% 

Wind Insurance

Coverage Amount

  • The acceptable coverage amount for wind insurance must be at least 100% of the loan balance or include 100% replacement cost

  • Deductible amount up to 5%

Flood zones are subject to change after the loan closes.  FEMA may issue a Letter of Map Amendment (LOMA) or a Letter of Map Revision (LOMR).  When this takes place the borrower is notified by letter by both FEMA and the Servicer.  

Servicers do not determine the flood zone.  All borrowers disputing their flood zones are directed to FEMA.  

Borrowers who send in a recent LOMA or LOMR will have their flood zone verified with the servicers Flood Vendor.