Flood license exam
Emergency flood insurance program
As soon as the community's SFHA is identified, all properties in that base flood zone become eligible for flood insurance at emergency program rates, subject to certain coverage limits: The purchase of flood insurance is required with federally regulated loans on property located in an SFHA.
Debris removal
In addition to covering the cost of removing debris of the insured's covered property, the NFIP's debris removal coverage also pays for the removal of neighbor's debris on the insured's property. Coverage applies regardless of where the debris is located on the insured's property.
Special Flood Hazard Area
A Special Flood Hazard Area is identified by FEMA in Flood Hazard Boundary Maps. A Special Flood Hazard Area (SFHA) or high risk area is defined as any land that would be inundated by having a 1-percent chance of occurring in any given year. This is also referred to as the base flood.
General exclusions
As a general rule, NFIP flood insurance does not cover: loss of use of the covered property lost revenue or profits loss from interruption of business or production any loss to property caused directly by earth movement even if the earth movement is caused by flood any increase in the cost of repair or rebuilding that is the result of ordinances regulating construction or repair of buildings, other than as provided in the $30,000 increased cost of compliance coverage
Building property eligibility
For a building to be insurable under a flood policy, it must: have two or more outside rigid walls have a fully secured roof affixed to a permanent location have at least 51 percent of the property, including machinery and equipment which are a part of the building, above ground level:If the ground level has been artificially raised around the building to serve as insulation, more than 50 percent of the structure can be below ground level as long as the lowest part of the building structure is at or above the base flood elevation (BFE). resist flotation, collapse, and sideways motion
Property removal expenses
If it is necessary to move covered personal property to protect it from damage by flood, coverage is provided at the location to which the property is removed (for up to 45 days). Coverage is also provided (up to $1,000) for the cost to move the property under these circumstances.
Sandbagging expenses
If the insured's property is clearly threatened by imminent flooding, up to $1,000 of coverage is provided for: sandbags (including sand, plastic sheeting, and lumber used in connection with them) fill for temporary levees pumps wood purchased by the insured to save the covered building
Write Your Own Program
Private insurers sell federal flood insurance under their own names, collect the premiums, and receive an expense allowance government has full responsibility for covering losses
Flood coverage limits
Regardless of a property's total insurable value, the maximum available flood coverage limits for a standard flood policy are shown in the chart. Property TypeCoverage Limit One- to four-family structure $250,000 One- to four-family home contents $100,000 Other residential structures $250,000 Other residential contents $100,000 Business structure $500,000 Business contents $500,000 Renter contents $100,000
Coinsurance
The NFIP has an unusual 80 percent coinsurance provision. Because full insurance to replacement cost value is not available for buildings valued over the NFIP coverage limits, the NFIP's coinsurance provision is modified in a way that essentially eliminates any coinsurance penalty for a policyholder who has purchased the maximum available limit. In effect, the NFIP coinsurance requirement is the lesser of 80 percent of the property's value or the maximum coverage limit (see chart).
Pollution damage
The general property form also pays up to $10,000 for damage caused by pollutants to covered property if the discharge or seepage of the pollutants is caused by or is the result of flooding. This $10,000 limit is part of, rather than in addition to, the limits of insurance on building and personal property. This coverage does not include the cost of testing for, nor the monitoring of, pollutants unless required by law.
Standard coverage form
dwelling form general property form residential condo building association policy form
Flood
single peril policy A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is the insured's property) from:1. Overflow of inland or tidal waters;2. Unusual and rapid accumulation or runoff of surface waters from any source;3. Mudflow. Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as we've defined it.
Increased cost of compliance Coverage D
the NFIP flood policy provides up to $30,000 of coverage for increased cost of compliance (i.e., costs resulting from the enforcement of floodplain management ordinances or laws that require elevation, flood proofing, relocation, or demolition of a structure after direct loss by flood). Increased cost of compliance coverage applies only under the following circumstances: when the cost to repair a flood-damaged structure equals or exceeds 50 percent of its market value, and the state or community is enforcing a substantial damage provision in its floodplain management law, or when the structure has suffered two flood losses (including the current loss) paid by the NFIP program during a ten-year period, the cost of each repair equaled or exceeded 25 percent of the market value of the structure, and the state or community is enforcing a cumulative substantial damage provision or repetitive loss provision in its floodplain management law. Cost of compliance coverage does not apply to: garages or carports property located in communities participating in the emergency program structures insured under a group flood insurance policy condominium association assessments loss of value of the remaining undamaged portion of a building demolished in compliance with floodplain management laws increased costs resulting from enforcement of any laws other than floodplain management laws
Deductibles
Deductibles apply separately to building coverage and contents coverage: Under the emergency program a $2,000 deductible applies. Under the standard program, the deductibles available on residential buildings and contents range from $1,000 to $5,000. Deductibles up to $50,000 are available on nonresidential buildings and contents.
Regular flood insurance program
Once all flood hazard zones in a community are identified, homeowners and renters in low- and moderate-risk zones can buy flood insurance.
General property form eligible residential properties include
apartment buildings residential cooperative buildings dormitories assisted-living facilities hotels, motels, tourist homes, and rooming houses that have more than four units where the normal guest occupancy is six months or more
National Flood Insurance Program
was created in 1968 with two purposes in mind: Share the risks of flood losses through a single insurance program covering the entire country. Reduce flood damage by restricting development in floodplains.
Mobile homes
are eligible buildings. Since October 1, 1982, the home must be affixed to a permanent foundation and anchored if it is located in an SFHA.
Ineligible building property
buildings that are constructed or altered in a way that places them in violation of floodplain management laws container-type structures, such as gas or chemical container tanks and brick kilns buildings constructed entirely over water, if they were built or substantially improved after October 1, 1982:NOTE: Structures that were built or last improved before October 1, 1982, are grandfathered and remain eligible for coverage. buildings in which 50 percent or more of the structure, including machinery and equipment which are part of the building, is below ground level:NOTE: If the ground level has been artificially raised around the building to serve as insulation, an exception is made as long as the lowest part of the building structure is at or above BFE. boat repair docks:NOTE: Boathouses are eligible, under limited circumstances. greenhouses (unless the structure has at least two rigid walls and a roof)
Contents eligibility
contents must be located in a fully enclosed building or secured to prevent flotation out of the building. Also eligible for coverage are: vehicles and related equipment, provided they are inside a building at the described location, are not licensed for use on public roads, and are:used primarily to service the described location, ordesigned and used to assist handicapped persons contents located inside silos, grain storage buildings, and cisterns commercial contents
Covered Personal Property Coverage B
covers property owned by the named insured or household family members. It applies only to personal property that is inside the fully enclosed building described in the application. It also covers, at the insured's option, property owned by guests or servants. If the insured is a tenant, improvements to the building made or acquired at that tenant's expense are covered under the personal property coverage. However, this coverage is subject to a maximum of 10 percent of the personal property coverage limit. If the insured is a condominium unit owner (not an association), up to 10 percent of the personal property coverage limit can be applied to cover losses to interior walls, floors, and ceilings that are not covered under a policy issued to the condominium association. Personal property also includes these covered items: air-conditioning units—portable or window units carpets clothes washers and dryers food freezers (other than walk-in freezers) and frozen food ovens, portable dishwashers, and microwave ovens cookout grills, outdoor equipment, and furniture stored inside the insured building (RCBAP and general property form only) Coverage on these types of personal property is subject to a sublimit of $2,500 per occurrence: artwork, photographs, collectibles, and memorabilia furs and articles containing fur jewelry, watches, precious or semiprecious stones, and articles made of precious metals personal property used in a business (not applicable to RCBAP and general property form) rare books Antiques are covered only for their functional value since their true worth can be difficult to ascertain.
Other coverages coverage C
debris removal expenses expenses of removing property to safety sandbagging expenses condominium loss assessments (dwelling form only) pollution damage (general property form only)
General property form eligible nonresidential properties include
hotels or motels with normal guest occupancy of less than six months and licensed bed-and-breakfast inns retail shops, restaurants, or other businesses mercantile buildings and nonresidential condominiums grain bins, silos, or other farm buildings agricultural or industrial processing facilities factories and warehouses pool houses, clubhouses, boathouses, or other recreational buildings schools and houses of worship nursing homes detached garages and toolsheds stock, inventory, or other commercial contents
Covered Building property coverage A
includes additions and extensions attached to the building by means of a common wall, stairway, walkway, or roof. It also includes attached fixtures, machinery, and equipment within the building including this partial list of covered items: awnings, canopies, and blinds built-in dishwashers, garbage disposals, microwave ovens, and walk-in freezers wallpaper, paneling, and carpet permanently installed over unfinished flooring central air conditioners, furnaces, and hot water heaters fire sprinkler systems and plumbing apparatus outdoor antennas and aerials attached to buildings light fixtures, permanently installed cabinets, cupboards, and bookcases elevator equipment pumps and their operating machinery specified appliances and fixtures installed in units within the building
Dwelling Form Eligibility
is issued to homeowners, residential renters, and owners of residential buildings containing one to four units. Available with both the NFIP regular and emergency programs, this form provides building and contents coverage for these eligible properties: single-family, noncondominium residences with incidental occupancy limited to less than 50 percent of the total floor area two- to four-family, noncondominium buildings with incidental occupancy limited to less than 25 percent of the total floor area dwelling units in residential condominium buildings residential townhouses and row houses personal contents in nonresidential buildings
Residential Condo building association form eligibility
is issued to residential condominium associations on behalf of the association and its unit owners. Available only in NFIP regular program communities, the form provides building coverage.
Excluded property under coverage B
personal property not inside the fully enclosed building personal property located in, on, or over water recreational vehicles, other than travel trailers that qualify as building property land, lawns, trees, plants, growing crops, and animals paper items such as accounts, bills, evidences of debt, manuscripts, and valuable papers money and securities, bullion, stored value cards, and postage stamps underground structures and equipment, including wells and septic systems walks, decks, driveways, patios, and other surfaces located away from the exterior walls of the building tanks containing gases or liquids fences, retaining walls, seawalls, bulkheads, wharves, piers, bridges, and docks aircraft, watercraft, and their furnishings and equipment hot tubs and spas (other than bathroom fixtures) and swimming pools buildings and contents made ineligible for flood insurance by the Coastal Barrier Resources Act
more than 20 % of flood losses occur in lower risk zones due to
poor drainage systems rapid accumulation of rainfall snowmelt mudslides
General property form eligibility
provides building and contents coverage for residential buildings with five or more units and certain types of nonresidential properties.
