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Flood Insurance Company

What is a Flood Insurance Company?

Flood Insurance Company

A flood insurance company sells and services flood insurance policies. It may also offer other types of insurances such as property insurance, car insurance, and boat insurance.

Write Your Own Program

Write Your Own (WYO) Program from FEMA allows flood insurance companies to write and service the National Flood Insurance Program (NFIP) Standard Flood Insurance Policy in their own names. The WYO Program which was established in 1981 operates as part of the NFIP and is subject to its rules and regulations.

Mortgage Portfolio Protection Program (MPPP)

A flood insurance company may participate in Mortgage Portfolio Protection Program (MPPP). MPPP provides flood insurance coverage that can be obtained by lenders for mortgage loans where the borrower has failed to obtain flood insurance at the time of origination. PPP is a force-placed flood insurance purchased by the lender at the time of origination to enable the lender to be in compliance with the flood insurance requirements under federal regulations. Policies written under the MPPP can be placed only through a WYO Company.

Source :www.MortgagesAnalyzed.com

Borrower's Considerations

Obtain Flood Insurance

You will need to obtain and maintain flood insurance when you obtain, increase, renew, or extend a mortgage loan where the property is in a special flood hazard area. This is a requirement under federal regulations. If you fail to obtain insurance, then the lender may force-place insurance on your behalf and will require you to pay for the insurance premiums.

Source :www.MortgagesAnalyzed.com

Lender's Considerations

Force-Placed Insurance

You will have to contact a flood insurance company to force-place flood insurance policy if the borrower has failed to renew the policy.

Notice to Flood Insurance Companies

There are two types of notices that you may have to provide to a flood insurance company to meet the requirements of Regulation H codified in 12 CFR 208.25 (j).

Notice of Servicer’s Identity

When you make, increase, extend, renew, sell, or transfer a mortgage loan secured by a property that is located in a Special Flood Hazard Area (SFHA), you need to inform the Director of FEMA, or its designee, in writing of the identity of the servicer of the loan. FEMA has designated the flood insurance companies to receive the notice.

In other words, you need to inform the flood insurance company the identity of the servicer anytime make, increase, extend, renew, sell, or transfer a mortgage loan that requires flood insurance.

Notice of Transfer of Servicing Rights

You must notify the Director of FEMA, its designee of any change in the servicer of a mortgage loan secured by a property that is located in a Special Flood Hazard Area (SFHA) within 60 days after the effective date of the change. FEMA has designated the flood insurance companies to receive the notice.

In other words, for mortgage loan that requires flood insurance, you need to inform the flood insurance company the identity of the new servicer anytime there is a change in the servicer.

Source :www.MortgagesAnalyzed.com

External Links

  1. Write Your Own Program

Updated: Mar 04, 2016

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Flood insurance company sells and services flood insurance policies
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