Flood FAQs #23 – Does the 30-day waiting period apply when the purchase of the flood insurance policy is deferred in connection with a construction loan?

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Q:  Does the 30-day waiting period apply when the purchase of the flood insurance policy is deferred in connection with a construction loan?
 
A:   No. The NFIP will rely on an insurance agent’s representation on the application for flood insurance that the purchase of insurance has been properly deferred unless there is a loss during the first 30 days of the policy period. In that case, the NFIP will require documentation of the loan transaction, such as settlement papers, before adjusting the loss.
 
 
 
ADDITIONAL INFORMATION – This Q&A was included in the “Interagency Questions and Answers Regarding Flood Insurance.”   For ease of collection, this has been obtained from the FDIC’s Compliance Examination Manual – April 2016, which may be found here:  https://fdic.gov/regulations/compliance/manual/5/V-6.1.pdf
 

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