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Massachusetts Enacts Flood Insurance Bill
On July 23, Massachusetts Governor Deval Patrick signed HB 3783, which prohibits creditors from requiring borrowers or owners to purchase flood insurance on the property: (i) at a coverage amount that exceeds the outstanding mortgage thereon; (ii) that includes coverage for contents; or (iii) that includes a deductible less than $5,000. Borrowers and owners will still have the option of purchasing a greater amount of insurance. The law provides that, in each instance flood insurance is required, the creditor must provide notice explaining that insurance coverage will only protect the creditor or lender’s interest in the property, and may not be sufficient to pay for repairs or property loss after a flood. The changes took effect immediately.