ANFI 205 Sample Exam

Emergency Program

initial phase of a community's participation in the NFIP in which property owners in flood areas can purchase limited amounts of insurance at subsidized rates

Insurable Buildings The NFIP will insure a building affixed to a permanent site that:

• Has two or more outside rigid walls with a fully secured roof; • Resists flotation, collapse, and lateral movement; and • Has at least 51 percent of the Actual Cash Value (ACV) of the building, including machinery and equipment that are a part of the building, above ground level unless the lowest level of the affixed structure is at or above the Base Flood Elevation (BFE) and is below ground using earth as insulation material in conjunction with energy-efficient building techniques.

If the building coverage is less than or equal to $100,000, the deductible available for the Mortgage Portfolio Protection Program (MPPP) is

$1,000.

Condos by the Sea have a Residential Condominium Building Association Policy (RCBAP) with $400,000 dwelling coverage. The replacement value of the building is $500,000. The covered building is flooded resulting in a $200,000 loss. Ignoring any deductible that may apply, what loss amount will be covered under the RCBAP?

$200,000

The maximum building and contents limits available for 1-4 family residential dwellings under the Preferred Risk Policy (PRP) are

$250,000 building/$100,000 contents.

Upper Class Boutique is a condominium unit owner. The Boutique purchased a General Property Form flood policy to cover their personal property. Upper Class suffered flood damage to the interior walls, floors, and ceilings (not covered under the condominium association's insurance). How much of its $55,000 Coverage B limit of liability could Upper Class apply toward their damaged interior walls, floors, and ceilings?

$5,500

Under the Standard Flood Insurance Policy General Property Form, the maximum insurable limits for a commercial warehouse are

$500,000 Building and $500,000 Contents.

how many outside, rigid walls must be present to be an eligible building?

2 or more

Which one of the following is true when an insured decides to rewrite an existing policy at the time of renewal from a Standard policy to a Preferred Risk Policy (PRP)?

A 30-day waiting period will not apply.

A general rule of rating when conditions are met to be eligible to receive the benefit from the "Grandfather rules," is to always use the new map if it will provide

A more favorable premium (lower rate).

Which one of the following expenses is excluded under the National Flood Insurance Program (NFIP) Dwelling Form?

Additional living expenses incurred while the insured building is being repaired

The Mortgage Portfolio Protection Program (MPPP) was introduced as

An additional tool to assist the mortgage-lending and servicing industries in bringing their mortgage portfolios into compliance.

A tenant in a commercial warehouse purchased a Standard Flood Insurance Policy with personal property coverage only. The tenant's improvements and betterments can be covered by

Applying 10% of the personal property limit.

Edward purchased a dwelling flood policy that will be effective on July 5, 20X1. On June 30, 20X1, the National Flood Insurance Program (NFIP) broadened the coverage under the edition of his policy that was about to take effect. Which one of the following statements correctly describes how the Liberalization Clause of the NFIP policy will apply to Edward's coverage?

As long as there is no additional premium required, the broadened coverage will be applied to Edward's policy since the change was implemented within 60 days before the effective date of his policy.

According to the National Flood Insurance Program (NFIP) Flood Insurance Manual, all parties listed on the Standard Flood Insurance Policy (insured, agent, mortgagees) are mailed a Renewal Notice at least how many days prior to the policy expiration date?

At least 45 days

Generally, new business applications for elevated-rated risks with a policy effective date of January 1, 2007, or later must be submitted with

At least two photographs that show the front and back of the building.

The Preferred Risk Policy (PRP) offers low-cost coverage to owners and tenants of eligible buildings located in

B, C, X, AR, or A99 Zones only.

Generally, the elevation difference is the difference between the lowest floor used for rating and the

Base Flood Elevation (BFE).

Anthony owns a restaurant that sits entirely over water. The building was built in 1977 and has been covered by flood insurance for the last 20 years. Anthony is completely renovating the building. An addition is being added and the interior is being completely upgraded. Once completed, the building will be considered substantially improved. How will the flood insurance policy for this building change?

Building will be ineligible for flood insurance.

A policy for a risk that fails to meet the eligibility requirements of a Residential Condominium Building Association Policy (RCBAP) during a policy term because of a change in the form of ownership will be

Cancelled and rewritten under the correct form.

The Federal Policy Fee is

Charged for all new and renewal policies.

Which one of the following is an example of an ineligible Preferred Risk Policy (PRP) property?

Condominium association buildings

Under the Residential Condominium Building Association Policy (RCBAP), the entire building is covered under one policy, including both the common as well as individually owned building elements within the units, improvements within the units, and

Contents owned in common.

Tim has purchased a National Flood Insurance Program (NFIP) Dwelling Form for his house. A flood has done extensive damage to his property. Jim's Dwelling Form provides

Coverage for the damage to his foundation and exterior walls.

Brad has had flood insurance under the National Flood Insurance Program (NFIP) on his home for the last five years. The building is rated using pre-FIRM rates. While Brad was going through some old house files, he found an Elevation Certificate (EC) for the building. Brad has submitted the EC and it has been determined that his building sits above the Base Flood Elevation and is eligible for more favorable rates. For how many terms will the NFIP allow rating corrections based on the submitted EC?

Current year only

Types of Eligible Buildings the NFIP Insures

Detached Garage

Contents owned by individual unit owners in a condominium association located in a Special Flood Hazard Area (SFHA) should be insured under which one of the following forms?

Dwelling Form

Which Standard Flood Insurance Policy form (SFIP) is issued to an owner of a residential building containing one to four units who has purchased flood insurance for his building?

Dwelling Form

What is the initial phase of a community's participation in the National Flood Insurance Program (NFIP) called?

Emergency Program

Which one of the following water events best describes a "flood" as defined by the National Flood Insurance Program (NFIP)?

Heavy rain that inundates the area and flows into several properties

Louise has had a standard-rated flood insurance policy from the National Flood Insurance Program (NFIP) on her home for the last four years. Her home is located in Zone X and has had no flood losses. She has been advised that her home is eligible for a Preferred Risk Policy (PRP). How many policy terms can be converted to a PRP?

Four

Certain Leased Federal Property must be

Full-risk rated.

April runs a business out of her home. She has a small office set up for her business. Her office contains the office equipment, office supplies, and stock that she needs to run her business. April has decided to purchase flood insurance and has been advised that her business contents must be insured separately under which one of the following Standard Flood Insurance Policy forms?

General Property Form

Non-residential condominium buildings may be insured under which one of the following policy forms?

General Property Form

Flood Hazard Boundary Maps are

Generally used for Emergency Program communities.

For rating purposes under the Residential Condominium Building Association Policy (RCBAP), which one of the following contains five or more units and at least three floors excluding enclosure?

High-rise buildings

Kathy received a National Flood Insurance Program (NFIP) flood insurance policy using an incorrect community number. However, Kathy's property is located in a non-participating NFIP community. Which one of the following is true regarding this situation?

Kathy's property is ineligible for flood insurance through the NFIP.

Which one of the following items must be included in the notification letter to the insured on a provisionally rated policy?

Limited reformation rights

Don and Daisy purchase their dream house, located in a new subdivision on a barrier island. Local community officials advise Don and Daisy that their property is subject to the Coastal Barrier Resources Act (CBRA). Which one of the following statements is correct with regard to securing flood insurance through the National Flood Insurance Program (NFIP) for their new home?

NFIP flood insurance is not available for new construction in a CBRA zone.

Federal Land

NFIP food insurance is available on land owned by the Federal Government when the local community meets the foodplain management requirements. The NFIP records all federal land under a local community number even if that local community does not have jurisdiction.

James has carried flood insurance on his home for 10 years and has never had a flood loss. To reduce expenses, he has decided to reduce his building coverage to lower his premium during the policy term. This reduction in coverage is

Not allowed.

Eligibility under the 1982 Act for a building in a Coastal Barrier Resources System (CBRS) area requires that a legally valid building permit for the construction of the building was issued prior to

October 1, 1983.

In Special Flood Hazard Areas (SFHAs), the Elevation Certificate is required to properly rate all

Post-FIRM buildings.

The National Flood Insurance Program Flood Insurance Application form, or a similar form used by Write Your Own (WYO) companies, must be used for all of the following flood insurance policies, EXCEPT:

Preferred Risk Policy

Which one of the following is a goal of the Community Rating System (CRS)?

Reduce flood damages to insurable property

Doug Holland is dissatisfied with the claim settlement offered by his Write Your Own (WYO) company. He has decided to appeal his claim. The appeals process is intended to

Resolve claim issues.

Which one of the following program's primary objective is to eliminate or reduce the damage to residential property and the disruption to life caused by repeated flooding?

Severe Repetitive Loss properties strategy

Increased Cost of Compliance (ICC) coverage is mandatory for all Standard Flood Insurance Policies with four exceptions. One of these exceptions is for policies

Sold in Emergency Program communities.

Martha owns an old Victorian house that has been modified into two separate residences. Martha resides in the unit on the left and she rents out the unit on the right. Each unit has its own entrance and utilities. Which one of the following must be present for Martha to be able to insure each unit separately?

Solid, vertical, load-bearing wall between units

A Letter of Map Amendment (LOMA) is a determination made by the Federal Emergency Management Agency (FEMA) for a property and/or building as to whether it is located within the

Special Flood Hazard Area.

Which one of the following procedures should be used to rate Post-FIRM non-elevated buildings located in Zone V?

Submit-for-Rate procedures

When producers fail to provide the required full-risk rating information, which one of the following rates can be used to generate a policy with coverage limits based on the actual premium received?

Tentative rates

A client is purchasing a commercial building. It is financed through a federally regulated and insured lender that is requiring flood insurance. It is a Post-FIRM building located in flood zone AE. An Elevation Certificate is required but cannot be purchased in time for property closing. The agent can place coverage by using

Tentative rating.

In order to charge actuarial rates, who determines if property leased from the Federal Government is located on the river-facing side of any dike, levee, or other riverine flood control structure?

The Administrator

Non Participating Community

The NFIP may not sell or renew food insurance in a community that does not participate in the NFIP. This prohibition becomes effective one year from the date FEMA provided the community with an FHBM or a FIRM delineating its food-prone areas.

When determining a community's status and community number, it is good to rely upon which one of the following sources?

The National Flood Insurance Program (NFIP) Community Status Book (online)

Which one of the following must occur if a Post-FIRM building is substantially improved?

The building must be re-rated using the FIRM in effect at the time that the substantial improvement occurred.

Jordan and Julie insure their beach house with a National Flood Insurance Program (NFIP) Dwelling Form. They have purchased the maximum dwelling and personal property coverage available. After a major coastal storm, they travel from their primary residence to meet with the flood adjuster and review the damage to their beach house and its contents. Which one of the following settlement options will be used to calculate their claim payment?

The loss to their dwelling and their personal property will be settled on the basis of actual cash value since this is not their principal residence.

Buildings, not the land, located in more than one zone must be rated using

The more hazardous flood zone.

An individual is selling a single-family dwelling and there is a flood insurance policy currently covering the building. Which one of the following statements is most accurate?

The current owner may assign the current policy with written consent to the purchaser of the insured building.

In Zones V, VE, and V1-V30, the floor of an enclosed area below the lowest elevated floor is the building's lowest floor for rating if which one of the following conditions exists?

The enclosed space is 300 square feet or more and has breakaway walls.

Which one of the following statements qualifies the floor of an enclosure below the elevated floor of a Post-FIRM building located in an AE Zone as the building's lowest floor for rating?

The enclosed space is finished having more than 20 linear feet of finished wall (such as paneling).

Bill and Barbara have a National Flood Insurance Program (NFIP) Dwelling Form covering their home. A covered flood event occurred. While their house was being remodeled, Bill and Barbara incurred extra expenses to rent a furnished apartment suite. Which one of the following is true regarding these rental expenses?

The expenses are excluded by the policy.

The Agreement section of the National Flood Insurance Program (NFIP) Dwelling Form states that the policy will pay for direct physical loss by and from flood to your insured property. Based on this agreement, if coverage is purchased, the policy will cover

The personal property of the named insured that is damaged by flood waters.

Which one of the following statements is true regarding coverage provided by the National Flood Insurance Program (NFIP) Dwelling Form?

The policy insures only one residential dwelling that is specifically described in the application for insurance.

Todd has a Post-FIRM elevated building on a crawlspace located in an AE flood zone. The building has an attached garage. The garage floor is at the same elevation as the crawlspace. What is the lowest floor for rating purposes if the only area that has proper openings is the crawlspace?

The top of the garage floor

Martha has her house insured under the National Flood Insurance Program (NFIP) Dwelling Form. There was a covered flood event that caused damage to her house and contents. Martha's $5,000 fur coat was completely destroyed. Which one of the following correctly describes coverage for Martha's fur coat?

There is coverage up to a special sublimit in the policy.

At the time flood insurance coverage was applied for, a building was located in Zone A99. A new map designated the zone as AE. The policy may continue to be rated using Zone A99 rates on the old map as long as

There is no interruption in coverage.

Which one of the following is true if an insured wants to renew his or her Standard Flood Insurance Policy with amounts of insurance increased by an inflation factor of 10% for building coverage and 5% for contents coverage and pays her premium within 30 days?

There is no waiting period.

Dennis has sold his dwelling and asks that his National Flood Insurance Program (NFIP) flood insurance policy be cancelled. In order to receive a refund, he must be sure

To provide a copy of settlement papers.

The maximum amount of building coverage that can be purchased on a high-rise or low-rise condominium is the lesser of the Replacement Cost Value of the building or $250,000 times the total number of

Units in the condominium building.

A policy written as a standard-rated policy and later found to be eligible for the Newly Mapped procedure may be endorsed or canceled and rewritten for how many policy terms?

Up to five years from the date of the map revision

Non-residential buildings in any participating community may be floodproofed in lieu of elevating in all of the following locations, EXCEPT:

V Zones

The National Flood Insurance Program (NFIP) standard deductible

Varies based on the policy rating and the amount of coverage.

A policy was written with both building and contents coverage. In the event of covered damage to both the building and contents, the policy

Will apply separate building and contents deductibles.

James purchased a National Flood Insurance Program (NFIP) Dwelling Form insuring the contents of his apartment. The apartment is located in the lowest level of a three story building, four steps below street level on all sides. Heavy rains flood the area and water flows from the street into his apartment. The NFIP dwelling flood policy

Will cover the washer and dryer James purchased and installed in his apartment on an ACV basis.

One purpose of the National Flood Insurance Act of 1968 is to encourage state and local governments to

Wisely use the lands by considering the hazards of flood.

Which one of the following is specified in the General Conditions section of the Dwelling Form issued by the National Flood Insurance Program (NFIP)?

Within 60 days after the flood loss, the insured must furnish a proof of loss.