Second Flood Insurance Policy Reportedly Forced on Some Homeowners

According to numerous claims around the United States, some mortgage companies are forcing homeowners to purchase unnecessary or excessive flood insurance policies, even if their homes are already covered. Through FEMA, a flood insurance program called National Flood Insurance Program (NFIP) has moved to force residences in high-risk flood areas to obtain flood insurance in an effort to protect communities that are particularly vulnerable. As a result, many condominium and apartment complexes have obtained flood insurance policies to abide by federal guidelines. Despite existing coverage though, some mortgage companies are allegedly forcing homeowners to pay for additional flood insurance. This flood insurance is often costly and is essentially useless, because the NFIP will not pay out damages for two different policies on one home.

Some mortgage companies are allegedly forcing homeowners to pay for additional flood insurance.

As part of a program administered by the Federal Emergency Management Agency (FEMA), homes and buildings in what are deemed to be high-risk flood areas are now required to have flood insurance. This program is called the National Flood Insurance Program (NFIP), which works with almost ninety insurance companies to offer fixed-rate flood insurance policies to homeowners in communities that are members. According to the requirements, high-risk flood areas are defined as those with greater than a 1% chance of a flood in any given year, amounting to a 26% chance of a flood during a standard 30-year mortgage. Moderate-to-low risk areas are not required to have flood insurance, but it is highly suggested by the NFIP.

If you believe that you or a loved one has been the victim of deceptive forced placed flood insurance practices by mortgage companies, you may be entitled to legal recourse. Flood insurance on a home in a high-risk area is extremely expensive and when a policy already exists through a condominium or apartment complex, the new one is effectively useless. Contact a dedicated bank flood insurance complaint attorney to find out if you are entitled to compensation for damages as a result of a worthless policy forced upon you by your mortgage company. Fill out the form on the right today for a free, no obligation review of your claim.