Respected sir/madam,
Bank of America has adopted a new policy regarding the amount of property insurance carried. They have deceided that if you have a flood policy in place, then the amount of coverage must equal that of your homeowners insurance. It doesnt matter if your home is flood resistant and that the current amount of coverage is greater than the appraised value of the home. FEMA only requires you insure your property for the lessor of the replacement cost, the mortgage amount, or $250, 000 for single family residence. My mortgage is less than $100, 000. The home appraised for $130, 000 and I had $180, 000 flood policy. My homeowners insurance adjust each year for inflation (another rip off) and now I have to increase the amount of coverage on my flood policy. When I called to complain, Bank of America said that I could lower my coverage to the amount of my mortgage, all they cared about is that the coverage is equal.
I work at a community bank. If we adopted a policy like this we wouldnt have any customers left. I would leave if I could, but I cant afford to refinance. It would be pointless if I did. BoA would just end up buying that one when it hit the secondary market anyway.