source:
  type: guide
  id: va-m26-7-ch09-t11
  authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 9, Topic 11 — Hazard
    Insurance
  description: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 9, Topic 11 — Hazard
    Insurance.
  coverage_tier: operative
obligations:
- id: va-m26-7-ch09-t11-full
  canonical_id: va-m26-7-ch09-t11-full
  section: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 9, Topic 11 — Hazard Insurance
  type: do
  tags:
  - regulator-direct
  - va
  - va-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 9, Topic 11 — Hazard
      Insurance
    source_class: va-handbook
    source_url: https://www.benefits.va.gov/warms/pam26_7.asp
    snapshot_id: 23782f6842a5daf5
    fetched_at: '2026-05-23T01:53:53Z'
    content_hash: sha256:b7c7fcb001b1097e51e4479c70f74c0d981cc1a7a38109e8cd455e205071d9e8
    paragraph_quote: '11. Hazard Insurance Change Date July 30, 2019 • This chapter
      has been revised in its entirety. a. General Requirements The lender is responsible
      for ensuring that hazard insurance is obtained prior to loan closing, and maintained
      for the term of the loan. It must be of an insurance type or types and in an
      amount sufficient to protect the property against risks or hazards to which
      it may be subjected in the locality. Generally, the type(s) and amount of insurance
      coverage customary in the locality will satisfy this requirement. Policies must
      provide that all amounts payable, including unearned premiums, shall be payable
      to the holder, or to a trustee or other person for the holder. All policy payments
      received for insured losses must be applied to the restoration of the security
      or to the loan balance. b. Flood Insurance Requirements The lender is responsible
      for ensuring that flood insurance is obtained and maintained on any building
      or personal property that secures a VA loan if the property is located in a
      special flood hazard area (SFHA), as identified by the Federal Emergency Management
      Agency (FEMA). The following flood insurance considerations may apply: • The
      lender/holder’s responsibility extends through the entire term of the loan,
      and includes insuring any secured property that becomes newly located in a SFHA
      due to FEMA remapping. • The VA appraiser’s opinion on whether the property
      is located in a SFHA does not relieve the lender from responsibility for ensuring
      flood insurance coverage on a property which is in fact located in a SFHA. •
      Personal property requiring coverage can include a manufactured home and its
      appliances, carpet, etc. if they secure the loan. Continued on next page VA
      Pamphlet 26-7, Revised Chapter 9: Legal Instruments, Liens, Escrows, and Related
      Issues 9-23 11. Hazard Insurance, continued b. Flood Insurance Requirements,
      continued • The amount of flood insurance must be equal to the lesser of the
      outstanding principal balance of the loan or the maximum limit of coverage available
      for the particular type(s) of property under the National Flood Insurance Act.
      • Contact local property insurance agents or brokers, or FEMA regional offices,
      for current information on maximum available coverage. Note: VA cannot guarantee
      a loan if the security is located in a SFHA and flood insurance is not available.
      c. Consequences of Uninsured Losses VA may reduce a future guaranty claim based
      on the lender’s noncompliance with VA hazard/flood insurance requirements which
      results in uninsured losses (unless a waiver has been granted). The lender must
      determine the minimum insurance coverage needed to meet the requirements of
      38 C.F.R. 36.4329 for a specific loan. If the required amount of coverage is
      maintained, no future guaranty claim can be reduced due to inadequate coverage
      provided there has been no change in the nature, value, or use of the security
      that would require new or additional coverage (based on what is customary in
      the locality) since VA’s determination was made. Continued on next page VA Pamphlet
      26-7, Revised Chapter 9: Legal Instruments, Liens, Escrows, and Related Issues
      9-24 11. Hazard Insurance, continued d. Special Considerations with Homeowners
      Associations Condominiums and many townhouse homeowners associations (HOAs)
      maintain blanket or master policies on common areas, including common mechanical
      and structural elements. The limits of coverage should be described in the policy,
      and may also be referred to in the organizational documents. Lenders should
      be aware that policies maintained by some HOAs may not provide adequate coverage.
      Condominium HOAs may protect only the shell of the structure. These “studs out”
      policies do not cover: • interior walls, • flooring, • plumbing or electrical
      fixtures, • cabinets, • heating, ventilation, and air conditioning (HVAC) equipment,
      • appliances, and • other items considered part of the real property. Carefully
      review the terms of each blanket policy, or confirm with the HOA that adequate
      coverage is in effect (and check periodically for any changes in coverage).
      If coverage is inadequate, the homeowner can be held responsible through the
      terms of the loan instruments, for maintaining coverage on the portions of the
      real property not covered by the master policy. VA Pamphlet 26-7, Revised Chapter
      9: Legal Instruments, Liens, Escrows, and Related Issues 9-25'
  judgment: false
