On February 14, 2025, New York State Governor Kathy Hochul signed Assembly Bill A2056 into law, amending recently enacted flood insurance requirements which were previously discussed here.
The prior law, enacted in December 2024, as Assembly Bill A5073A, amended New York Real Property Law by adding a new Section 283, to prohibit any mortgagee from requiring mortgagors of improved real property to purchase flood insurance: (1) at a coverage amount that exceeds the outstanding principal mortgage balance as of the beginning of the year for which the policy shall be in effect, or (2) that includes coverage for contents of the property. The law further required that mortgagees shall provide a notice to the mortgagor when flood insurance is required, with specific language.
To meet the new notice requirement, DocMagic began providing the New York Flood Insurance Notice (Form ID: NYFIN.MSC) in initial, closing, and flood certification packages when a subject property is in New York, and indicated as being in a flood zone.
Assembly Bill A2056 amends the requirements under new Section 283 to limit the amount that a mortgagee may require for flood insurance. Mortgagees may not require mortgagors to purchase coverage in an amount that: (1) exceeds the lesser of the replacement value of the residential real property or the outstanding principal mortgage balance as of the beginning of the year for which the policy shall be in effect, or (2) that includes coverage for contents of the property.
The notification language required under Section 283 has been amended to add reflect the new requirements. DocMagic is updating the New York Flood Insurance Notice (Form ID: NYFIN.MSC) with the amended language, which will be available as of the extended effective date, March 13, 2025.
