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“ Flood Insurance ” - Employee Training

“ 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?”.

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“ Flood Insurance ” - Employee Training

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  1. “Flood Insurance” - Employee Training • American Bank and Trust • 2003

  2. Introduction • Foundation of the National Flood Insurance Reform Act of 1994

  3. Topics of Discussion • Flood Insurance - “Why should we care?” • Definitions • “What must we do to comply?”

  4. 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

  5. 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

  6. 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

  7. “What must we do to comply?” • Remember “M.I.R.E.” • Ensure adequate coverage! - (Sample form) • Monitor LOL coverage

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