What to do if we recently refinanced our home and our lender wants us to get flood insurance for an exhorbitant amount?

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What to do if we recently refinanced our home and our lender wants us to get flood insurance for an exhorbitant amount?

We only owe $75,000. We were just put on a flood plane. At first the financial institute had us get $150,000 worth of flood insurance. We just got another notice we have to put $250,000 of flood insurance on the home. Since we only owe $75,000 can they do this? In the 60 years of being in this area this house has never flooded.

Asked on December 16, 2012 under Real Estate Law, Ohio

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

If the escrow has closed then under the laws of all states in this country you have no further obligation to get the type of insurance presently being demanded of you. If the lender is requiring such, the lender has to cite a provision in the loan agreement where you have to do what it wants concerning the insurance issue.


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