CRT-Eligible Profile Summary

How MI Works Disaster event / Physical Damage Under MI Master policies, an MI claim can be denied if there is material physical damage to the property that was the principal cause of default. The damage could be the result of natural disaster (e.g., flood, earthquake, hurricane, etc.) or otherwise (e.g., defects in construction, fire, environmental impairment). Physical damage means any injury, physical damage or impairment to a property that the MI reasonably estimates to be in excess of the greater of $5,000 or 2% of the original property value, whether caused by accident, natural disaster or otherwise. If physical damage is the principal cause of default and manifested itself after the MI issued its commitment, the MI can deny the claim. Physical damage is deemed to be the principal cause of default if: 1) the property has not been restored; and 2) there was no hazard insurance or insufficient hazard insurance to restore the property; or 3) there was sufficient hazard insurance, but a claim was not filed, or a claim was filed but the proceeds have not been received, or the proceeds have been received but not applied to restore the property. If the MI provides notification of its intent to deny the claim and we promptly notify the MI of our intent to restore the property and actually restore it within 180 days (or up to 1 year if certain requirements are met), the MI cannot deny the claim. If physical damage is not the principal cause of default, the MI may curtail (but not deny) the claim in accordance with policy parameters that depend on whether the MI can reasonably estimate the cost of restoration. 55 © 2024 Fannie Mae

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