VIP Flood Insurance Requirements

Insurance Requirements: Flood Zones and Flood Insurance

 Flood Zone:

  • Zone must match on flood cert AND flood policy
  • Exception: we allow for discrepancy between AO and AOB zone classification between the flood cert and flood policy


  • Individual Policy – Max $5,000
  • Master Flood Policy – Max $25,000 per building


  • Individual Policy
    • $250,000 NFIP max OR
    • Equal to/exceed the replacement cost coverage on the hazard policy
  • Master Flood Policy – take total coverage divided by total # units for our subject property
    • 100% of full replacement cost (or similar verbiage to indicate “guaranteed replacement” ) OR
    • $250,000 NFIP max per unit
Other Detached Structures
  • Other DETACTHED structures, in addition to the main house – requires separate flood policy if it does not state that it’s included in main flood policy
    • Review appraisal, photos, sketches – if structure is given a value of $5,000 or more.
    • Examples: barn, guest home, large storage facility/shed, workshop, tack room, horse facilities. A permanent structure with 2 rigid walls affixed to the property counts.
    • Exception:  A detached garage can be covered under the same flood policy as subject property
    • Separate Flood policy requirements:
      • Must have flood coverage that is at least equal to the value given on appraisal for
      • structure
        • Example: Tack room valued at $11,000 needs a policy with $11K flood coverage
        • If no value given: request appraiser for value, or insurance company to provide estimated value
      • Must indicate “Other structures – (list type of structures)”. If multiple detached structures, need the structures itemized.
        • Example: “Other structures – tack room and horse facilities”

Policy Requirements

  • Acord, Binder, and Quotes are not acceptable
  • Acceptable forms of documentation – 2 options ONLY:
    • FEMA Flood Application – must fully completed and include correct info, along with listed premium, and signed by borrowers and agent for acknowledgement
    • Flood Dec Page – contains all requirements, along with listed premium
  • Premium payment – 2 options ONLY:
    • Evidence showing  1st full year premium has been paid in full
    • Evidence 1st full year premium collected and paid on final HUD-1


  • Flood Hazard Notice (page 2 of flood cert) – must be signed/dated 3 days prior to closing
  • Flood Servicing Disclosure – no wait period; can be signed at closing

Borrower Information

  • All borrowers’ names match final 1003 (including suffix if applicable):
    • Middle initial may differ.
  • Name Examples:
    • 1003 shows Michael Smith, Insurance shows Mike Smith. We need insurance updated to show Michael.
    • 1003 shows Michael D. Smith, Insurance shows Michael Smith. We don’t need insurance updated.
  • All borrowers must appear on the policy.
    • May have additional insured, if applicable (e.g., non-borrowing spouse).
    • The name of the insured can be listed in any order, but must include our borrower(s) name.

Policy Information

  • Policy Number: Required, no quotes allowed.
  • Effective dates, Purchases must be on or before the funding date of the same month.
    • Policy period must extend at least 12 months from date of closing.
  • Effective dates, Refinances: Need at least 60 days remaining after the note (signing) date. If not, do one of the following:
    • Renewal policy and collect the new premium at closing.
    • Or collect current premium at closing.
  • Premium payment: We cannot assume the premium is paid in full.
    • We need one of the following:
    • Evidence paid in full.
    • Unpaid invoice or amount to collect at closing.
  • Escrows Waived: Need written proof that account is paid current with no lates.
  • Subject Property Address must match the 1003 and USPS.
  • Primary Refinance Address: Mailing and subject addresses must match.