ACSR 6 - Flood Insurance
Regular
In the ____ program, the maximum amount of insurance available for nonresidential properties is $500,000 for building coverage and $500,000 for personal property.
Emergency
In the ____ program, the maximum amounts are $100,000 on buildings ($150,000 in Alaska, Hawaii, Guam, and the U.S. Virgin Islands) and $100,000 on contents.
Base Flood Elevations (BFE)
A ____ is the computed elevation to which floodwater is anticipated to rise during the base flood and is shown on both FIRMs and flood profiles.
Emergency
A community that becomes eligible for NFIP participation is placed in the ____ program until the required floodplain management plan and necessary FIRMs are developed. Coverage in this program is offered at subsidized rates.
Write Your Own (WYO)
A program allowing private insurers to write flood insurance under the National Flood Insurance Program (NFIP).
Residential Condominium Building Association Policy (RCBAP)
A version of the National Flood Insurance Program (NFIP) Standard Insurance Policy that is used for insuring residential condominium buildings, as well as contents that are owned either by the unit owners in common or by the condominium association solely.
B. 3 days after the inception of the endorsement.
After an insured purchases the ISO Flood Coverage Endorsement, coverage for flood damage will begin A. Immediately after the inception of the endorsement. B. 3 days after the inception of the endorsement. C. 7 days after the inception of the endorsement. D. 30 days after the inception of the endorsement.
Coinsurance
An insurance-to-value provision in many property insurance policies providing that if the property is underinsured, the amount that an insurer will pay for a covered loss is reduced.
Flood Endorsement
Another option for providing flood coverage is to add ISO's ____ to a commercial property policy. This uses the NFIP definition of flood, so the endorsement will not cover all of the types of flood loss excluded by ISO's causes of loss forms.
A. Adopt community flood plain management ordinances to regulate new construction and alterations of existing structures.
National flood insurance is available to owners of property located in communities that participate in the National Flood Insurance Program (NFIP). To participate, communities are required to A. Adopt community flood plain management ordinances to regulate new construction and alterations of existing structures. B. Make monthly premium payments to the federal government, in which the funds collected subsidize the premiums paid by individual property owners. C. Be located in an area that is known to be at high risk for flooding or that has drainage or sewage leakage issues. D. Develop a competitive state fund that allows private insurers and state insurers to compete for insureds that wish to be involved in the NFIP.
A. Adopt and enforce community floodplain management ordinances.
National flood insurance is available to owners of property located in communities that participate in the National Flood Insurance Program (NFIP). To participate, communities must A. Adopt and enforce community floodplain management ordinances. B. Adopt and enforce a special NFIP tax. C. Be located within 100 miles of a major body of water. D. Be located in an area that has a 10 percent or greater likelihood of flooding in any given year.
Flood Endorsement
One of the most important differences between the flood endorsement and the other coverages in the Commercial Property Coverage Part is that the ____ is often subject to a separate sublimit of insurance. This sublimit is usually lower than the total policy limit(s) for building and contents.
C. Sublimit of insurance.
One of the most important differences between the flood endorsement and the other coverages in the Commercial Property Coverage Part is that the flood endorsement is often subject to a separate A. Eligibility requirement. B. Coinsurance requirement. C. Sublimit of insurance. D. Deductible.
Regular program
Second phase of the National Flood Insurance Program in which the community agrees to adopt flood-control and land-use restrictions and in which property owners purchase higher amounts of flood insurance than under the emergency program.
D. May cover water damage to property in the open if specified in the flood schedule.
The Flood Coverage Endorsement is subject to all of the exclusions and limitations found in the causes of loss form attached to the policy, subject to some exceptions. For example, the endorsement A. Does not cover flood damage unless the flood begins more than 48 hours after the inception of the endorsement. B. Covers loss caused by the destabilization of land resulting from the accumulation of water in the subsurface. C. Covers all water damage caused by sewer backup or overflow. D. May cover water damage to property in the open if specified in the flood schedule.
Special Flood Hazard Areas (SFHAs)
The NFIP classifies areas with a high risk of flooding ____, or areas that are determined to have a 1 percent or greater likelihood of flooding in any given year. Federal regulations mandate that federally regulated or insured lenders require flood insurance on properties located in these high-risk areas.
Residential Condominium Building Association Policy (RCBAP), commonly called "REBAP,"
The NFIP's ____ insures residential condominium associations as well as contents owned by the unit owners in common or by the condominium association.
A. Excludes loss of use and loss of income as optional coverages.
The National Flood Insurance Program (NFIP) General Property Form and standard commercial property coverage forms have some key differences. The NFIP General Property Form A. Excludes loss of use and loss of income as optional coverages. B. Includes a coinsurance or insurance-to-value provision. C. Can be written on a blanket basis such that buildings can be described and insured together. D. Covers non-residential building and contents on an actual cash value (ACV) basis with an option for replacement cost.
B. Coverage cannot be written on a blanket basis.
The National Flood Insurance Program (NFIP) General Property Form is used to insure commercial building and contents risks. Which one of the following is true regarding the General Property Form? A. Coverage for buildings and contents can be provided on an actual cash value (ACV) or replacement cost basis. B. Coverage cannot be written on a blanket basis. C. Optional coverage is available for loss of income. D. Eighty percent coinsurance is required for full coverage.
General Property Form
The version of the National Flood Insurance Program (NFIP) Standard Flood Insurance Policy that is used for insuring commercial buildings and contents.
National Flood Insurance Program (NFIP)
To participate in the ____, communities are required to regulate new construction and substantial alterations and improvements of existing structures by adopting and enforcing community floodplain management ordinances.
Write Your Own (WYO)
Under the ____ program, participating insurers issue and service NFIP policies in exchange for a percentage of the premium and a fee for claim adjustment services. Insurers write the vast majority of NFIP policies.
Increased Cost of Compliance (ICC)
____ coverage is available only for a building defined as a "repetitive loss structure," meaning a building that meets specific damage that lowers its market value, is covered by the NFIP, has suffered flood damage on at least two occasions within ten years, and is subject to state or community repetitive loss management provisions.
Coverage B—Personal Property
____ covers either household personal property or other than household personal property, but not both.
Coverage D—Increased Cost of Compliance (ICC)
____ differs from building and ordinance coverage that may be added to standard commercial property policies in that it pays only for compliance costs related to floodplain management.
Coverage A—Building Property
____ provides coverage for building property that is generally more restrictive than coverage offered under a standard commercial property form.
Flood Insurance Rate Maps (FIRMs)
____ show boundaries of SFHAs, the various flood zones, and base flood elevations (BFEs).
D. They use the same definition of "flood."
In which one of the following ways is the ISO Flood Coverage Endorsement most similar to the National Flood Insurance Program (NFIP) policy? A. They both require compliance with community floodplain management ordinances. B. They have the same limit of coverage for building and personal property. C. They use the same terms and conditions. D. They use the same definition of "flood."
Emergency program
Initial phase of a community's participation in the National Flood Insurance Program in which property owners in flood areas can purchase limited amounts of insurance at subsidized rates.
C. In policies with Coverage A—Building Property coverage.
The National Flood Insurance Program (NFIP) General Property Form contains Coverage D—Increased Cost of Compliance (ICC) to pay for compliance costs related to flood plain management for qualifying structures. However, Coverage D is only available A. In policies that meet the 80 percent coinsurance provision. B. In policies with Coverage C—Other Coverages. C. In policies with Coverage A—Building Property coverage. D. In policies that cover building and contents on a replacement cost basis.
B. Until a floodplain management plan and flood insurance rate maps (FIRMS) are developed.
The National Flood Insurance Program (NFIP) consists of an emergency program and a regular program. A community that becomes eligible for NFIP participation is placed in the emergency program A. After it has suffered flood damage numerous times and until it is no longer considered a flood hazard area. B. Until a floodplain management plan and flood insurance rate maps (FIRMS) are developed. C. Until the community wishes to be a part of the regular program, in which maximum limits can be higher. D. When the community is located in a high risk area, typically by a river, lake, or ocean.
National Flood Insurance Program (NFIP)
The United States Congress acknowledged insurers' inability to offer flood coverage at a price that consumers were willing to pay by creating the ____.
NFIP General Property Form
The ____ covers direct physical loss caused by flood, as defined in the policy, at the premises described on the declarations form.
Base Flood Elevations (BFE)
The ____ is the regulatory requirement for the elevation or floodproofing of structures, and the relationship between the ____ and a structure's elevation determines the flood insurance premium.
NFIP General Property Form
The ____ is used to insure most commercial building and contents risks, such as factories, retail businesses, warehouses, or residential condominium buildings that are not eligible for coverage under the RCBAP.
National Flood Insurance Program (NFIP)
The ____ sets eligibility requirements, coverage limits, and coverages provided by the NFIP General Property Form and the Residential Condominium Building Association Policy.
National Flood Insurance Program (NFIP)
The ____ sets flood insurance eligibility requirements, coverage limits, and coverages under its General Property Form and the Residential Condominium Building Association Policy.
D. $500,000 on buildings and $500,000 on personal property
What is the maximum amount of coverage available for nonresidential properties under the National Flood Insurance Program regular program? A. $250,000 on buildings and $100,000 on personal property B. $250,000 on buildings and $250,000 on personal property C. $500,000 on buildings and $250,000 on personal property D. $500,000 on buildings and $500,000 on personal property
D. The flood endorsement is subject to a separate sublimit.
Which one of the following is a difference between the flood endorsement and other coverages in the Commercial Property Coverage Part? A. The flood endorsement only applies to certain types of structures. B. The flood endorsement cannot be written on a replacement-cost basis. C. The flood endorsement does not include business income coverage. D. The flood endorsement is subject to a separate sublimit.
C. The Flood Coverage Endorsement is subject to all exclusions found in the causes of loss form attached to the policy subject to some exceptions.
Which one of the following statements regarding Insurance Services Office (ISO) Flood Coverage Endorsement is true? A. The Flood Coverage Endorsement only covers damage to personal property if the property is listed in the flood schedule or declarations. B. The Flood Coverage Endorsement does not cover loss caused by a tsunami. C. The Flood Coverage Endorsement is subject to all exclusions found in the causes of loss form attached to the policy subject to some exceptions. D. The Flood Coverage Endorsement follows the same terms and conditions of the National Flood Insurance Program policy.
B. The ISO endorsement uses essentially the same definition of flood as used in National Flood Insurance Program (NFIP) flood policies.
Which one of the following statements regarding flood insurance is true? A. Flood insurance for most commercial properties is written with the Insurance Services Office (ISO) flood endorsement. B. The ISO endorsement uses essentially the same definition of flood as used in National Flood Insurance Program (NFIP) flood policies. C. The ISO endorsement follows the same terms and conditions of the NFIP policies, except when the endorsement states otherwise. D. The ISO Flood Coverage Endorsement is part of a homeowners or dwelling policy.