FEMA is introducing cost saving insurance options through the National Flood Insurance Program (NFIP) that may benefit property owners. If a building has been newly mapped into a high-risk flood zone, the property owner may be eligible for significant savings with the NFIP's new Preferred Risk Policy (PRP) Eligibility Extension.
PRPs offer low-cost coverage to owners and tenants of eligible buildings located in the NFIP Regular Program communities. FEMA’s stated goal in providing this temporary extension of PRP eligibility is to reduce some of the financial burden imposed on borrowers by Federally-regulated lenders who require the purchase of flood insurance for buildings that are located in newly mapped SFHAs. The PRP extension is also available on mortgages from non-Federally-regulated lenders. While non-regulated lenders are not subject to Federal regulations, they may consult the Federal websites for guidance on how to proceed.
The Federal Agencies for Lending Regulation, in support of the FEMA initiative, have issued guidance to lending institutions indicating the flood insurance policy writing company, not the lender, will be responsible for determining and validating PRP extended eligibility.
If a lending institution refuses to accept a valid PRP, insurance agents should provide the lending institution with the Federal Lending Agency Guidance Regarding the PRP Eligibility Extension.
If the lender still refuses to accept a valid PRP, the borrower can file a complaint with the lender’s Federal regulator. Information to assist a borrower in finding the lender’s Federal regulator is available at: www.ffiec.gov/consumercenter/default.aspx. If the borrower does not have access to the Internet or can’t find their lender's name, they can contact any of the Federal bank regulators noted below:
Office of the Comptroller of the Currency at (800) 613-6743
Federal Reserve Board at (888) 851-1920
Federal Deposit Insurance Corporation at (877) 275-3342
Office of Thrift Supervision at ( 800) 842-6929
FEMA manages the NFIP, a federal program allowing property owners in participating communities to buy insurance protection against losses from flooding. FEMA does not have authority to require the purchase of flood insurance; nor does FEMA have the authority to regulate lenders. Implementation of the flood insurance purchase requirement is the duty of the various federal agencies that supervise lenders.
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