Windstorm Insurance

Windstorm Insurance. The VHPB requires Windstorm (Hurricane) Insurance in the six coastal counties of Mississippi. (Hancock, Harrison, Jackson, Pearl River, Stone, George). The dwelling coverage amount will be the same as on the Hazard (Homeowners) policy. The maximum deductible amount required is 2 percent of the dwelling coverage. However, should the borrower request a higher deductible or his/her insurance company will not allow the 2 percent deductible, the VHPB will review the account to determine if a higher deductible of 5 percent is acceptable. The review will consider the following: A. The payment history must reflect that the borrower paid the monthly payments in accordance with the Deed of Trust note. Payments made consistently over 16 days from the due date are not acceptable. B. The equity position of the property must be at least four times that of the dollar amount of the deductible. Examples: 1. Dwelling coverage = $150,000 5% ded = $7,000 Balance of VHPB mortgage = $100,000 Four times ded amount = $30,000. Equity position = $50,000 In this example, the higher deductible of 5% is Acceptable 2. Dwelling coverage = $150,000 5% ded + $7,500 Balance of VHPB mortgage = $140,000 Four times ded amount = $30,000. Equity position = $10,000 In this example, the higher deductible of 5% is Not Acceptable Both of the examples above assume the dwelling coverage amount approximates the value/ replacement costs of the dwelling. C. Requests for deductibles higher than 5% will be submitted to management for review and approval/disapproval. NOTE ON WINDSTORM INSURANCE: Severe storms, namely hurricanes, can cause widespread damage and destruction of property located in the six southern most counties of Mississippi. Because of the possibility of such storms, insurance companies often times offer limited coverage or no coverage at all. The VHPB requires wind insurance based on the above deductible amounts. However, because of limitations dictated by insurance companies, the deductible limits of 2% may not be obtainable. In such cases, on new loans, the VHPB management will determine the best course of action. On renewals, the VHPB staff will use its best efforts to maintain the deductible percentage as above. Management will review exception cases as they are determined.