Mortgage lenders and servicers will have to be more careful than ever about force-placing insurance this year.

A 2012 law designed to stabilize the National Flood Insurance Program's finances could have the unintended consequence of dramatically increasing the price of coverage for borrowers in flood zones. This in turn could result in more borrowers failing to pay or renew flood coverage, requiring lenders to force-place coverage, says Tom Elder, the program manager for financial institutions at the wholesale insurance brokerage All Risks.

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