Flood Insurance (very tricky)
Biggert-Waters Flood Insurance Reform Act of 2012
addresses problems with NFIP
Coverage D Increased Cost of compliance (ICC)
covers the extra cost needed to comply with flood plain management laws and ordinances when the insured is rebuilding damaged property
Dwelling Form Coverage A Detached garages are not covered if partly used for _______, ________, or _____.*
farming, residential (for rent), or business
The National flood Insurance Program (NFIP)*
federal insurance; fill coverage gap left by homeowners' insurance [provides flood insurance for individuals in communities complying with NFIP standards]
After Huricane Katrina, NFIP had to borrow $_____ billion from the US Treasury.
$21 billion from the US treasury
Collective limit of _____ for Coverage B
$2,500
Actual Cash Value (loss settlement option)
-2+ family dwellings -Detached garages -Personal property -Appliances, carpets, carpet pads -Outdoor awning, antennas (things attached to dwelling) -abandoned property that, after loss, remains as debris at described location -Dwellings that are not the principal residence
Certification: Residential, Mobile Home, or Small commercial* ____ years of experience $____ manufactured (mobile) homes/travel trailers $____ for residential dwelling $____ for commercial properties
-4 consecutive years of full-time property adjusting experience Adjust losses accurately up to: -$50,000 manufactured (mobile) homes/travel trailers -$250,000 for residential dwelling $500,000 for commercial properties
Certification: Large commercial, RCBAP*
-5 consecutive years of full-time property adjusting experience Adjust losses of: -$500,000 or more for large commercial losses -$1 million or more for RCBAP losses -3 written recommendations from insurance company supervisors/claim management
changes to NFIP
-coverage, rate, and premium structures -requires repayment plan and reserve fund -updates to mapping program -amendments to eligible mitigation activities
Coverage C Other Coverage covers
-debris removal from premises & covered property -loss avoidance measures/mitigation -property removed to safety
Coverage B Personal Property requirements for contents coverage
-items must be inside building or in secured location if building is partially enclosed -separate purchase & deductible
Special Loss Settlement (loss settlement option) -If total lost, what's payout?
-lowest of the two amounts: RC or (1.5 x ACV) Building limit of liability
Base flood elevations help regulate*
-new construction -premiums
Dwelling Form (NFIP Policy)
1-4 family members living in dwellings & condos residential contents
NFIP Standard Flood Insurance policy (SFIP)*
Federal insurance, not subject to local or state courts
WYO is more efficient. It generates ___% of flood policies.
90%
Basement (Dwelling Form Coverage A)
Area in which the floor is below ground level (subgrade) on all sides
Mobile home/trailer qualifications*
At least 16 ft 600 sp ft inside Insured's principle residence
buildings under construction (Dwelling Form Coverage A)
covered, but with twice the deductible
Coverage B Personal Property coverage
covers direct physical loss to CONTENTS due to flood
Pre-FIRM Building
Construction or improvement occurred BEFORE the beginning of 1975, or BEFRE the effective date of FIRM
General Property Form (NFIP Policy)
Contents of non-residential buildings
Dwelling Form Coverage A
Dwelling: ATTACHED additions connected by exterior wall, load-bearing wall, stairway, elevated walkway, & roof
Loss payment condition
Insurer has 60 days from when it receives a proof of loss to pay the claim
Residential Condominium Building Association Policy (RCBAP)
Insures residential condo associations
Coverage B Personal Property coverage for below base flood elevation*
Only items covered in a basement are ACs, washers & dryers, food freezers and food in them
Flood insurance is only available for communities that participate in the _______.*
NFIP
Adjusters that want to work flood claims must be _______ certified.
NFIP certified
Write Your Own (WYO) Program -Private Insurers -Federal Government
PI: -sell policies -collect premiums -pay losses FG: -provides expense accounts -underwrites losses
Post-FIRM Building
construction or improvement occurred AFTER the beginning of 1975, or AFTER the effective date of FIRM
Does Pre-FIRM or Post-FIRM buildings have less restrictions on what can be covered below base flood elevation?
Pre-FIRM buildings
SFIP Exclusions
Property or buildings in or over water, land, lawns, trees (shrubs, plants), crops, animals
Base flood*
a flood to bad that it only happens once in 100 years [flood that has a 1% chance of being equaled or exceeded in any given year]
What effect does covering a detached garage under the Dwelling Form Coverage A do to the coverage liability?
covered up to 10% of the covg. A limit; reduces amount of covg available for dwelling insurance
Elevated Building (Dwelling Form Coverage A)
building with no basement, lowest level is above ground level
construction supplies and materials (Dwelling Form Coverage A)
covered, but only if inside of covered building
_____ are the leading cause of property damage in the US
floods
Base Flood Elevation (BFE)
highest level that the water would reach during a base flood
Flood Insurance Rate Maps (FIRMs) -Use a measurement called the ____ _____
identify flood zones and hazards -base flood
NFIP Direct
issued by federal government, claims handled by federal government
With respect to NFIP claims, adjustments are ____________ only.
recommendations
Reduction & Reformation condition
reduces flood coverage limits if the insured's premium was too low
Replacement Cost (loss settlement option)*
single family dwelling owner occupied insured's principal residence Insured at 80% of replacement value
Flood
temporary inundation of 2 or more acres or properties from overflow of inland/tidal water, rapid accumulation of surface water/runoff, mudflow, or collapse of land along the shore of a lake or body of water which causes overflow of inland waters
NFIP certified adjusters have to complete continuing education every _____.
year
