§ 283 — Limits on amount of flood insurance required by mortgagee

§ 283. Limits on amount of flood insurance required by mortgagee. No\nmortgagee shall require a mortgagor to whom the mortgagee makes,\nincreases, extends, or renews any loan or line of credit secured by\nimproved residential real property to purchase or pay for flood\ninsurance on such residential real property: (1) at a coverage amount\nthat exceeds the lesser of the replacement value of the residential real\nproperty or the outstanding principal mortgage balance as of the\nbeginning of the year for which the policy shall be in effect; or (2)\nthat includes coverage for contents. In each instance where a mortgagee\nrequires a mortgagor to purchase or pay for flood insurance on such\nresidential real property, the mortgagee shall provide notice to the\nmortgagor at the time the mortgagee is notified of the need to purchase\nor pay for flood insurance that states the following in clear and\nconspicuous print: 'The flood insurance we are requiring you to purchase\nmay not be sufficient to pay for many needed repairs after a flood and\nmay not compensate you for your losses in the property due to the flood.\nIf you wish to protect your home or investment, you may wish to purchase\nmore flood insurance than the amount we are requiring you to buy.'\n