Insurance Commissioner Urges Federal Government to Help Homeowners by Adopting Regulation Requiring Mortgage Lenders to Accept Private Market Flood…
Insurance Commissioner Urges Federal Government to Help Homeowners by Adopting Regulation Requiring Mortgage Lenders to
Insurance Commissioner
Commissioner Miller sent a letteraEuros to federal financial regulators who have proposed regulations governing which private market flood insurance policies lenders making federally-backed mortgage loans must accept. Homes in SFHAs with federally backed mortgages are required to have flood coverage, which is not included in standard homeowners' insurance policies.
"I have been working for a year to make private residential flood insurance more available to
Commissioner Miller said in her letter to federal financial regulators the main problem with the proposed regulations is they do not specifically say that personal lines residential flood policies offered by surplus lines insurers can be accepted by lenders for purposes of satisfying the mandatory purchase requirement for homes in SFHAs. She notes this could seriously harm consumers' opportunities to get flood insurance at the best prices, as nearly all residential flood policies sold by the private market in
Surplus lines insurance companies are licensed outside of
"In Pennsylvania, a number of communities have been re-mapped in the SFHAs by the
Commissioner Miller cited one case where a homeowner would have had to pay
Commissioner Miller also specifically asks federal regulators to amend their proposed regulations to require private flood coverage only be as broad as an NFIP policy for the specific property securing the loan. This is important to allow private insurers to tailor coverage to a homeowner's specific needs, and provide more options at better prices. For example, the NFIP provides coverage for certain property, such as a furnace or water heater, in a basement, but if a home does not have a basement, private flood coverage should be able to reflect this, and potentially offer the policy at a lower price.
"Many homeowners re-mapped into SFHAs have rarely or never experienced flooding, but are now required to have flood insurance. I want these consumers to have the opportunity to consider private market plans, offered through both
She also noted
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