Raf Flood Insurance - A

Approved & Edited by ProProfs Editorial Team
The editorial team at ProProfs Quizzes consists of a select group of subject experts, trivia writers, and quiz masters who have authored over 10,000 quizzes taken by more than 100 million users. This team includes our in-house seasoned quiz moderators and subject matter experts. Our editorial experts, spread across the world, are rigorously trained using our comprehensive guidelines to ensure that you receive the highest quality quizzes.
Learn about Our Editorial Process
| By NeilHS
N
NeilHS
Community Contributor
Quizzes Created: 1 | Total Attempts: 238
Questions: 10 | Attempts: 238

SettingsSettingsSettings
Insurance Quizzes & Trivia

An assessment of understanding for those that participated in the RAF Flood Training conducted by Susan Stephens on September 26 and 27, 2011.


Questions and Answers
  • 1. 

    Why is Flood Insurance Important? 

    • A.

      Regulators are serious about enforcing flood requirements.

    • B.

      Civil Money Penalties can be assessed.

    • C.

      Reputational risk for not complying.

    • D.

      It protects the Borrower and the Lender.

    • E.

      All the above.

    Correct Answer
    E. All the above.
    Explanation
    Flood insurance is important for several reasons. Firstly, regulators are strict about enforcing flood requirements, and failing to comply can result in civil money penalties. Additionally, not having flood insurance can damage a person's reputation. Moreover, flood insurance protects both the borrower and the lender from financial losses in the event of a flood. Therefore, all of the above reasons make flood insurance important.

    Rate this question:

  • 2. 

    Flood insurance coverage is not limited to consumer or mortgage loans and is triggered by collateral of the loan.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Flood insurance coverage is not limited to consumer or mortgage loans means that flood insurance can be obtained for purposes other than just consumer or mortgage loans. It implies that flood insurance can be purchased for various types of properties or assets, not just those associated with loans. The statement also mentions that flood insurance is triggered by collateral of the loan, indicating that the insurance coverage is activated when the loan collateral is affected by a flood. Therefore, the correct answer is true.

    Rate this question:

  • 3. 

    Lenders must require flood insurance not only at the time the loan is made but throughout the term of the loan.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Lenders must require flood insurance throughout the term of the loan to protect their investment in case of a flood event. This ensures that the borrower has adequate insurance coverage to cover any potential damage or loss caused by a flood. By requiring flood insurance throughout the loan term, lenders can mitigate their risk and protect their financial interests.

    Rate this question:

  • 4. 

     A lender can allow the borrower to use the maximum deductibles to reduce the cost of flood insurance but it is not a sound business practice.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Allowing the borrower to use the maximum deductibles to reduce the cost of flood insurance may seem like a beneficial option for the borrower, but it is not a sound business practice for the lender. By allowing the borrower to use maximum deductibles, the lender is taking on a higher risk as they would have to bear a larger portion of the cost in case of a flood. This can potentially lead to financial losses for the lender, making it an unsound business practice.

    Rate this question:

  • 5. 

    General requirements of flood are:

    • A.

      A Standard Flood Hazard Determination Form must be used to document SFHA.

    • B.

      Notice must be provided to a customer if in a SFHA at the time of closing.

    • C.

      Flood insurance is required when making, renewing, increasing, or extending a designated loan.

    • D.

      All of the above

    • E.

      A and C

    Correct Answer
    E. A and C
    Explanation
    The correct answer is "A and C". This means that both the Standard Flood Hazard Determination Form must be used to document SFHA and flood insurance is required when making, renewing, increasing, or extending a designated loan. These requirements are important for identifying and managing flood risks, as well as ensuring that appropriate insurance coverage is in place for properties located in flood hazard areas.

    Rate this question:

  • 6. 

    Can flood insurance be waived on a structure if there is enough value or equity in the land being pledged as collateral.

    • A.

      Yes

    • B.

      No

    Correct Answer
    B. No
    Explanation
    Flood insurance cannot be waived on a structure based on the value or equity of the land being pledged as collateral. The requirement for flood insurance is determined by the location of the structure and the risk of flooding in that area, rather than the value of the property. Therefore, even if there is enough value or equity in the land, flood insurance cannot be waived.

    Rate this question:

  • 7. 

    Lender must have proof of flood insurance?

    • A.

      At the time of closing.

    • B.

      At the time the notice is provided to the customer.

    • C.

      At the time the customer can afford it.

    • D.

      All of the above

    • E.

      None of the above

    Correct Answer
    A. At the time of closing.
    Explanation
    The correct answer is "At the time of closing." This means that the lender must have proof of flood insurance when the loan is being finalized and the property is being transferred to the buyer. It is important for the lender to have this proof to ensure that the property is protected against potential flood damage, which could affect the value of the property and the borrower's ability to repay the loan. Having flood insurance in place at the time of closing helps mitigate these risks for the lender.

    Rate this question:

  • 8. 

    Lender does not need to ensure that the customer has continued flood insurance and force place the flood insurance if needed?

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The correct answer is False. This means that the lender does need to ensure that the customer has continued flood insurance and force place the flood insurance if needed. This is because having flood insurance is important for protecting the property and ensuring that the borrower can repay the loan in the event of a flood. The lender wants to mitigate their risk and protect their investment by making sure the borrower has the necessary insurance coverage.

    Rate this question:

  • 9. 

    Property owners ___________ contest a lender’s policy.

    • A.

      May

    • B.

      May not

    Correct Answer
    B. May not
    Explanation
    Property owners may not contest a lender's policy. This means that property owners do not have the ability or right to challenge or dispute a lender's policy. They are bound by the terms and conditions set by the lender and do not have the authority to contest it.

    Rate this question:

  • 10. 

    Lenders are __________ to abide by the SFHA until a LOMR or LOMA is issued.

    • A.

      Required

    • B.

      Not required

    Correct Answer
    A. Required
    Explanation
    Lenders are required to abide by the SFHA until a LOMR or LOMA is issued. This means that they must follow the guidelines and regulations set forth in the Special Flood Hazard Area until they receive official documentation stating otherwise. This is important for ensuring that lenders are aware of the potential flood risks associated with a property and can make informed decisions regarding lending and insurance.

    Rate this question:

Related Topics

Back to Top Back to top
Advertisement
×

Wait!
Here's an interesting quiz for you.

We have other quizzes matching your interest.