c. Unavailable or Terminated Insurance

If it is not possible to obtain and maintain insurance on the property, contact VA.  VA will determine whether to waive the requirement or declare the (existing) loan to be in default.

d. 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).

e. VA Determination of the Amount of Insurance Required

The lender may request VA to determine the minimum insurance coverage needed to meet the requirements of 38 CFR 36.4326 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.