The Bank can and should require that the borrower maintain insurance on the improvements to real estate and its contents. An Agreement to Provide Insurance is a document in which the borrower contractually agrees to the type and amount of coverage and specifies the insurance company providing the coverage. A sample Agreement to Provide Insurance form is located at the end of this Chapter.
Standard loan document forms contain provision which allow the Bank to purchase collateral protection insurance on behalf of the borrower if the borrower fails to maintain coverage and charge the cost to the borrower. A form of Collateral Protection Insurance Notice which notifies the borrower of the requirement of insurance is located at the end of this Chapter.