Flood insurance inconsistencies???

[Floodfrenzy]

What is the name of your state? Massachusetts

Hubs and I just purchased a house in August. In the almost six months that we have had this house, the loan had been bought out by another bank and then sold to a mortgage company. The initial bank we signed with stated we needed 158,000 worth of flood insurance on the house, which we purchased. Now that the loan is in the hands of the mortgage company, they are saying we have inadequate flood insurance and want us to purchase flood insurance for the full amount we owe on the house.

My question is why the discrepancy? Two banks did not have a problem with the 158,000 worth of flood insurance, yet this mortgage company wants full total coverage for flood insurance. They're response was "this is their policy." Seeing as how this isn't written in stone anywhere in the contract about terms regarding flood insurance, do I just have to suck this up and pay what they want or is there some way I can get them to honor the previous bank's requirement for flood insurance? Furthermore, the threat that they are calling a "flood risk" is pathetic and needs rezoning in my opinion, as does my insurance agent.

 

[tammy8]

Ohh I hate flood stuff! Have only written 3 in my 9 yrs of ins!

But here goes, is 158K your loan amount? Most mortgage companies require the full amount of flood coverage to met your loan requirements.

To save you some money raise your deductible or remove or reduce the coverage for personal contents (with contents, I have found most ppl believe if a flood is coming they would have enough time to remove what they needed to however this is not always the case, just mostly the case in my state).

Speak to your ins agent and one that works a lot with flood coverages.

Good luck.

 

[Floodfrenzy]

Thanks for the great suggestions, Tammy. I will definitely look into increasing our deductible and your other suggestions as well.

The odd thing is that when the loan was originated, it was for 198,000, but the bank said we only needed 158,000 in flood. Do banks require less flood insurance coverage than mortgage companies, or was this truly a fluke that slipped through two banks' hands and caught by a mortgage company?

Thanks again for any suggestions. 'Tis definitely a headache!!