(a) Borrowers shall purchase and maintain flood insurance for buildings in flood hazard areas to the extent available and required under the National Flood Insurance Act of 1968, as amended (42 U.S.C. 4001, et seq.) The insurance should cover, in addition to the building, any machinery, equipment, fixtures, and furnishings contained in the building.
(b) The National Flood Insurance Program (see 44 CFR part 59 et seq.) provides for a standard flood insurance policy; however, other existing insurance policies which provide flood coverage may be used where flood insurance is available in lieu of the standard flood insurance policy. Such policies must be endorsed to provide:
(1) That the insurer give 30 days written notice of cancellation or nonrenewal to the insured with respect to the flood insurance coverage. To be effective, such notice must be mailed to both the insured and RUS and other mortgagees if any and must include information as to the availability of flood insurance coverage under the National Flood Insurance Program, and
(2) That the flood insurance coverage is at least as broad as the coverage offered by the Standard Flood Insurance Policy.