| |
Welcome to WNC's Who Wants To Be A Flood Pro? -- a relaxed way to learn or re-learn about flood, flood compliance and insurance so you can effectively manage flood risk.
So, how much do you really know about flood? Click the "I Want To Be A Flood Pro!" button after answering each question and let's find out!
Ready? Click the button now and let's begin .... |
| |
|
|
|
| |
| True or False: Floods are the deadliest natural catastrophes in the U.S. every year -- more than hurricanes, tornadoes, and earthquakes combined. |
| |
|
|
|
|
| |
| You are correct! Off to a good start .... |
| |
|
|
|
| |
Oops! Floods are the deadliest natural catastrophes in the U.S. every year.
That's alright. We're just getting started. On to the next question .... |
| |
|
|
|
| |
| What is the name of the Federal government's flood program? |
| |
|
|
|
|
|
|
|
|
| |
Not quite ... the Federal flood program is called the National Flood Insurance Program (NFIP).
No problem, with all of the government acronyms we read or hear about, it's easy to forget some of them! |
| |
|
|
|
| |
| A property mortgaged with a regulated lender and which has a building and/or contents inside this location is required by Federal law to maintain flood insurance for the life of the mortgage. What is this area called? |
| |
|
|
|
|
|
|
|
|
| |
Nope, sorry ... this area is called a Special Flood Hazard Area (SFHA).
Yeah, all of the answers sound right, don't they? Perfectly understandable. |
| |
|
|
|
| |
| What are the two flood zones that are classified as Special Flood Hazard Area (SFHA)? |
| |
|
|
|
|
| |
| That's right! Nice going .... |
| |
|
|
|
| |
Not so fast my friend ... A and V zones, including those followed by a second letter or a number, are the only SFHA zones where flood insurance is required.
B, C, D and X zones reflect some level of flood risk but are not part of the mandatory flood insurance requirements.
I know ... it seems like re-learning the alphabet! |
| |
|
|
|
| |
| What is the only instance when a mortgaged property in an SFHA would NOT be required by Federal law to maintain flood insurance? |
| |
|
|
|
|
| |
| You are correct! Keep it going! |
| |
|
|
|
| |
Sorry, that is incorrect. The right answer is "When the lender or mortgagee is not regulated by the Federal government".
Really? You would think all institutions were regulated, right? |
| |
|
|
|
| |
| True or False: If a building in an SFHA is on land whose value alone is enough to secure the loan regardless of the building's value, the lender may waive the flood insurance requirement. |
| |
|
|
|
|
| |
You got it!
As long as a building or part of it is in an SFHA, the lender must require flood insurance - regardless of the value of the land. |
| |
|
|
|
| |
Sorry, that's not correct. As long as a building or part of it is in an SFHA, the lender must require flood insurance - regardless of the value of the land.
Good to know, right? |
| |
|
|
|
| |
| During the life of a 30-year mortgage, how many times more likely would a property in an SFHA be damaged by flood than by fire? |
| |
|
|
|
|
| |
| You're on a roll, friend ... that's right! |
| |
|
|
|
| |
Sorry, you missed it. But seriously, who would have thought? Fires seem to occur all the time, don't they?
Statistically, a property in an SHFA is 6 times more likely to be damaged by flood than by fire during a 30-year mortgage. |
| |
|
|
|
| |
| When required by law, what is the maximum amount of flood insurance that a lender or servicer may require? |
| |
|
|
|
|
| |
I'm becoming a believer ... you are correct!
However, you should also consider the requirements of investors such as Fannie Mae or Freddie Mac in determining the amount of insurance. |
| |
|
|
|
| |
Sorry ... while the outstanding balance, maximum available, and full replacement cost all sound right, the lowest of those three amounts is the maximum that a lender can require.
However, consider other factors too, such as Fannie Mae or Freddie Mac requirements in determining the amount of insurance. |
| |
|
|
|
| |
| True or False: A lender may require a borrower to purchase flood insurance even if a building is located outside an SFHA (Special Flood Hazard Area). |
| |
|
|
|
|
| |
Absolutely, as long as it's clearly stated in the loan agreement.
I can feel your confidence increasing ... good sign! |
| |
|
|
|
| |
| Sorry, but it's true. As long as it is clearly stated in its mortgage loan agreement, a lender may require flood insurance to protect its investment, even if Federal law doesn't. |
| |
|
|
|
| |
| What is the name of the NFIP's force placed (or lender placed) flood program? |
| |
|
|
|
|
| |
That's right!
The Mortgage Portfolio Protection Program (MPPP) is the force placed flood insurance option provided by the NFIP. |
| |
|
|
|
| |
Sorry, friend ... it's called the Mortgage Portfolio Protection Program (MPPP).
But that's alright ... let's go to the next question. |
| |
|
|
|
| |
| True or False: Where the outstanding principal balance of the loan exceeds the insurable value of the building, the insurance amount should be the insurable value of the building rather than the outstanding principal balance of the loan. |
| |
|
|
|
|
| |
That's right!
This makes sure that the insured does not pay for uninsurable land and property improvements which exceed what the flood policy will pay for. |
| |
|
|
|
| |
Oops, not quite.
If the loan balance is greater than the insurable value of the building and yet you still require it (loan balance) to be the amount of insurance, the insured may be paying more than what the flood policy will cover. This is possible because the loan value may include uninsurable land and other property improvements. |
| |
|
|
|
| |
| True or False: Increased Cost of Compliance or ICC coverage, which pays for the increased cost to rebuild or alter a flood-damaged property to conform with state or local building code or floodplain management laws is in addition to the amount of building insurance purchased. |
| |
|
|
|
|
| |
You are correct!
However, the amount of combined loss payment received from building coverage and ICC cannot exceed the prevailing maximum NFIP limits of $250,000 for residential and $500,000 for non-residential structures. |
| |
|
|
|
| |
Nope, not quite.
ICC coverage is in addition to the amount of insurance that applies to the building; however, the combined loss payment received from building coverage and ICC cannot exceed the prevailing maximum NFIP limits of $250,000 for residential and $500,000 for non-residential structures. |
| |
|
|
|
| |
| Yes or No: Can flood insurance be purchased on a building still to be constructed in a Special Flood Hazard Area even if construction hasn't started? |
| |
|
|
|
|
| |
Yes, you can!
If a soon-to-be-constructed building located in an SFHA will become eligible for flood insurance when completed, flood insurance can be purchased even if construction hasn't started. |
| |
|
|
|
| |
| Sorry, but the answer is Yes - you can purchase flood insurance on a building which will be located in an SFHA even if actual construction hasn't started. |
| |
|
|
|
Loading...
