More pages in this section

“New Requirements Regarding Flood Insurance in Massachusetts”

On July 23, 2014 , Governor Deval Patrick signed into law An Act Further Regulating Flood Insurance

November 2014

Christopher J. Currier

On July 23, 2014 , Governor Deval Patrick signed into law “An Act Further Regulating Flood Insurance”, effective November 20, 2014. Links to the Act and to “Frequently Asked Questions” prepared by the Massachusetts Division of Banks can be found below.

As of November 20, 2014, lenders/creditors are prohibited from requiring that a purchaser or owner of residential property with 1-4 units, purchase flood insurance that:

  • Contains coverage exceeding the outstanding principal mortgage balance of the loan secured as of the beginning of the year for which the flood insurance policy shall be in effect;

  • Includes coverage for contents; or

  • Includes a deductible of less than $5,000.

The Act requires that a notice containing statutory prescribed language be given to the purchaser or property owner at the time the purchaser or owner is notified of the need to purchase or pay for flood insurance.

Although the new law clearly impacts residential mortgage lenders, the law also applies to commercial lenders where residential property is taken as collateral to secure a loan or guaranty of a principal.

Lenders should review their form of notes, mortgages and other documents to ensure that they do not contain language which would be in violation of the law, such as provisions requiring the procurement of flood insurance covering contents.

An Act Further Regulating Flood Insurance

Frequently Asked Questions on Chapter 177 of the Acts of 2014, An Act Further Regulating Flood Insurance


Back to Top

30 Federal Street
Boston, MA 02110


40 Westminster Street
Suite 1100
Providence, RI 02903


128 Union Street
Suite 500
New Bedford, MA 02740

e-Alert signup