Lesson 2: SFIP Overview & Dwelling Form
Definition of a Condominium
A condominium is that form of ownership of real property in which each unit owner has an undivided interest in common elements.
A building does not mean...
A gas or liquid storage tank or recreational vehicle, park trailer or other similar vehicles, except as described in Section II.B.6.c
Definition of Actual Cash Value (ACV)
Actual Cash Value is the cost to replace an insured item of property at the time of loss, less the value of its physical depreciation
The SFIP refers to the policyholder and the policyholder's spouse (if a resident of the same household) as
"You" or "Your" on the Declaration Page
Dwelling Form of the policy covers
A Non-condominium residential bldg. designed for principal use as a dwelling place for 1-4 families. A single-family dwelling unit in a condo. bldg.
Definition of "Basement"
A basement is defined by the SFIP as any area of the building, including any sunken room or sunken portion of a room, having its floor below ground level (subgrade) on all sides
Definition of "Post-Firm" Building
A building for which construction or substantial improvement occurred after December 31, 1974, or on or after the effective date of an initial Flood Insurance Rate Map (FIRM), whichever is later.
Definition of Flood (Part 1)
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 (one of which is the policyholder's property) from: ★ Overflow of inland or tidal waters ★ Unusual and rapid accumulation or runoff of surface waters from any source ★ Mudflow
For a Flood claim to be payable
A general condition of flooding—as defined in the policy—must have occurred
Definition of "Mudflow"
A mudflow is a river of liquid and flowing mud on the surfaces of normally dry land areas, as when earth is carried by a current of water. Other earth movements, such as landslide, slope failure, or a saturated soil mass moving by liquidity down a slope, are not mudflows
Definition of a "Unit"
A single-family unit owned by the policyholder in a condominium building
Adjuster Tip
A structure is eligible for an ICC claim payment if the community determines that the structure is considered substantially damaged as defined and amended by the Flood Insurance Reform Act (FIRA) of 2004
Coverage D - Increased Cost of Compliance - Assignment
A structure is eligible for an ICC claim payment if the community determines that the structure is substantially damaged under the definition amended by the Flood Insurance Reform Act (FIRA) of 2004. FIRA 2004 amends this definition to include a threshold lower than 50 percent.
Coverage B: Personal Property - Special Limits
A total of $2,500 is the maximum payment allowed for artwork; rare books; jewelry; furs or any article containing fur which represents its principal value; as well as personal property used in any business. This maximum payment also extends to the following: ★ Photographs ★ Collectibles ★ Memorabilia ★ Porcelain or other figurines ★ Sports cards ★ Autographed items ★ Watches ★ Precious and semi-precious stones ★ Articles of gold, silver, or platinum
Property Covered contains four subsections
A. Coverage A: Building Property B. Coverage B: Personal Property C. Coverage C: Other Coverages D. Coverage D: Increased Cost of Compliance
Bulletin W-11021
Addresses the definition of substantial damage as amended: ' ...This amended definition includes an NFIP insured structure "that has incurred damage for which the cost of repair exceeds an amount specified in any regulation" - currently 50 percent of the Market Value of the structure at the time of loss. This section adds "or by a community ordinance, whichever is lower ."
Coverage B: Personal Property (cont'd)
Adjuster Tip: Personal Property coverage must be purchased separately, and a separate deductible is applied The personal property within a detached garage is covered if the policyholder purchased Coverage B ‒ Personal Property Coverage (Dwelling Form only), even if the detached garage is used or held for use for residential (i.e., dwelling), business, or farming purposes, subject to limitations of the policy.
It is important to know if the risk has a basement
All basements have restricted coverage
Definition of "Special Flood Hazard Area" (SFHA)
An area having special flood or mudflow, and/or flood-related erosion hazards, and shown on a Flood Hazard Boundary Map or FIRM as Zone A, AO, A1-A30, AE, A99, AH, AR, AR/A, AR/AE, AR/AH, AR/AO, AR/A1-A30, V1-V30, VE, or V.
Definition of an "Elevated Building"
An elevated building is a building that: ★ Has no basement ★ Has its lowest elevated floor raised above ground level by foundation walls, shear walls, posts, piers, pilings, or columns
Policyholder, referred to in the SFIP as "insured" means...
Any mortgagee or loss payee named in the Application and Declaration page OR Any other mortgagee or loss payee determined to exist at the time of loss in order of precedence.PRECEDENCE.
Coverage C: Other Coverages - Loss Avoidance Measures. Property Removed to Safety (Con't) (Part 2)
Any property removed, including a moveable home as described under the policy definition of a building, must be placed above ground level or outside of the SFHA. This coverage does not increase the Coverage A or Coverage B limit of liability.
Definition of Flood (Part 2)
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
The statutory limit for coverage available under the NFIP Act of 1968 is:
Coverage A - Building: $250,000 Coverage B - Personal Property: $100,000
Coverage A- Building Property, Additions and Extensions
Coverage A covers additions and extensions attached to and in contact with the dwelling by means of a: ★ Roof ★ Elevated walkway ★ Exterior rigid wall ★ Load-bearing interior wall (solid) ★ Stairway (Acronym = REELS)
Coverage D: Increased Cost of Compliance (ICC), Eligibility. (Continued) (Part 2)
Coverage D pays the policyholder to comply with state or local floodplain management law or ordinances that meet the minimum standards of the NFIP found in the Code of Federal Regulations at 44 CFR 60.3.
Coverage A: Building Property - Detached Garage at the Described Location
Coverage for a detached garage at the described location is limited to no more than 10 percent of the limit of liability on the dwelling. Use of this insurance is at the policyholder's option but reduces the building limit of liability. The policy does not cover any detached garage used or held for use for residential (i.e., dwelling), business, or farming purposes
Coverage B: Personal Property - Personal Property Located Below the Lowest Elevated Floor
Coverage for items of property in a building enclosure below the lowest elevated floor of an elevated, Post-FIRM building located in Zones A1-A30, AE, AH, AR, AR/A, AR/AE, AR/AH, AR/A1-A30, V1-V30, or VE, or in a basement, regardless of the zone, is limited to the following items, if installed in their functioning locations and, if necessary for operation, connected to a power source: ★ Air conditioning units, portable or window type ★ Clothes washers and dryers ★ Freezers, other than walk-in, and food in any freezer
Coverage B: Personal Property - Coverage B Only Items
Coverage for personal property includes the following property, which is covered under Coverage B only: ★ Air conditioning units, portable or window type ★ Carpets, not permanently installed, over unfinished flooring ★ Carpets over finished flooring ★ Clothes washers and dryers ★ "Cook-Out" grills ★ Food freezers, other than walk-in, and food in any freezer ★ Portable microwave ovens and portable dishwashers
Coverage A: Building Property - Building Under Construction. (PART 2)
Coverage is provided for those items that will become part of the finished building. For example, rebar, footings, and concrete walls that will become part of the finished building are covered. Note that there is no coverage for: ★ The forms used to retain the concrete ★ A building under construction before it is walled and roofed when the building is Post-FIRM and the basement floor or lowest elevated floor is below the BFE in any of Zones AE, AH, A1-A30, AR, AR/A, AR/AE, AR/A1-A30, AR/AH, or AR/AO, or below BFE adjusted for wave action in Zones VE or V1-V30a
At the policyholder's option, additions and extensions connected by any of these methods may be separately insured.
EXAMPLE: If two multi-unit apartment buildings are connected by a roof, the policyholder may purchase one policy for both buildings or two separate policies However, additions and extensions attached to and in contact with the building by means of a common interior wall that is not a solid load-bearing wall are always considered part of the dwelling and cannot be insured separately.
Coverage D - Increased Cost of Compliance (ICC): Conditions (Continued) (Part 2)
Eligible activities for the cost of clearing the site will include those necessary to discontinue utility service to the site and ensure proper abandonment of on-site utilities.
The insuring agreement states the following
FEMA provides flood insurance under the terms of the National Flood Insurance Act of 1968 and its amendments, and Title 44 of the Code of Federal Regulations (Title 44 CFR).
Coverage A: Building Property - Coverage A Only Items (cont'd)
For items of property in a building enclosure below the lowest elevated floor of an elevated Post-FIRM building located in Zones A1-A30, AE, AH, AR, AR/A, AR/AE, AR/AH, AR/A1-A30, V1-V30, or VE, or in a basement, regardless of the zone, coverage is limited to any of the following items, if installed in their functioning locations and, if necessary for operation, connected to a power source: ★ Central air conditioners ★ Cisterns and the water in them ★ Drywall for walls and ceilings in a basement and the cost of labor to nail it, unfinished and unfloated and not taped, to the framing ★ Electrical junction and circuit breaker boxes ★ Electrical outlets and switches ★ Elevators, dumbwaiters, and related equipment, except for related equipment installed below the BFE after September 30, 1987 ★ Fuel tanks and the fuel in them ★ Furnaces and hot water heaters ★ Nonflammable insulation in a basement ★ Pumps and tanks used in solar energy systems ★ Stairways and staircases attached to the building, not separated from it by elevated walkways ★ Sump pumps ★ Water softeners and the chemicals in them, water filters, and faucets installed as an integral part of the plumbing system ★ Well water tanks and pumps ★ Required utility connections for any item in this list ★ Footings, foundations, posts, pilings, piers, or other foundation walls and anchorage systems required to support a building ★ Cleanup
Coverage D: Increased Cost of Compliance (ICC) (Continued)
ICC coverage is available on residential and non-residential buildings (this category includes public or government buildings, such as schools, libraries, and municipal buildings) insured under the NFIP. ICC does not place additional floodplain management regulatory requirements on states or communities. ICC utilizes the existing processes in place in states and communities responsible for administering their floodplain management law or ordinance.
Coverage D: Increased Cost of Compliance (ICC)
ICC coverage pays the policyholder for the cost to comply with a state or community floodplain management law or ordinance after a direct physical loss by flood. When a building covered by an SFIP under the NFIP sustains a flood loss and the state or community declares the building to be substantially or repetitively damaged, ICC will help pay up to $30,000 for the cost to elevate, flood-proof, demolish, or relocate the building
Coverage C: Other Coverages - Loss Avoidance Measures. Property Removed to Safety (Con't)
If the insured property is moved to a location other than the described location that contains the property in order to protect it from flood or the imminent danger of flood, the insured property is covered at that location for a period of 45 consecutive days from the date the policyholder begins to move it there. The personal property must be placed in a fully enclosed building or otherwise reasonably protected from the elements.
Coverage A: Building Property - Manufactured (Mobile) Home or Travel Trailer
If the manufactured home or travel trailer is in an SFHA, it must be anchored in the one of the following manners at the time of the loss: ★ By over-the-top or frame ties to ground anchors ★ IAW the manufacturer's specifications ★ In compliance with the community's floodplain management requirements, unless it has been continuously insured by the NFIP at the same described location since September 30, 1982
Coverage B: Personal Property - Condominium Unit
If the owner of a condominium unit has insured personal property under Coverage B, coverage is provided for the interior walls, floor, and ceiling (not otherwise covered under a flood insurance policy purchased by the condominium association) for not more than 10 percent of the limit of liability shown for personal property on the Declarations Page. Use of this insurance is at the policyholder's option but reduces the personal property limit of liability
Coverage C: Other Coverages - Condominium Loss Assessments
If the policy insures a unit, it pays, up to the Coverage A limit of liability, the policyholder's share of loss assessments charged against the policyholder by the condominium association in accordance with the condominium association's articles of association, declarations, and the policyholder's deed. The assessment must be made as a result of direct physical loss by or from flood during the policy term, to the building's common elements
Coverage B: Personal Property - Tenants
If the policyholder is a tenant and has insured personal property under Coverage B - Personal Property, the policy covers such property, including a cooking stove or range and refrigerator, if owned by the policyholder.
Definition of "Improvements"
Improvements are defined in the Dwelling Form as fixtures, alterations, installations, or additions comprising a part of the insured dwelling or the apartment in which the policyholder resides.
Adjuster Tip
It is important that you, the adjuster, document the ownership of the stove or range and refrigerator. With regard to improvements, the adjuster must document and confirm that improvements were made or acquired solely at the policyholder's expense, and also document and confirm that such items are not covered under the building owner's flood policy, if one exists.
Definition of a "Declarations" page
Includes a computer-generated summary of information the policyholder provided in the application for insurance. The Declarations Page also describes the term of the policy and limits of coverage, and displays the premium and the insurer name. The Declarations Page is a part of the flood insurance policy.
Definition of "Regular Program"
Is the final phase of a community's participation in the NFIP. In this phase, a FIRM is in effect and full limits of coverage are available under the Act.
Definition of "Direct Physical Loss By or From Flood
Loss or damage to insured property directly caused by a flood. There must be evidence of physical changes to the property.
Coverage A: Building Property - Materials and Supplies
Materials and supplies used to alter, repair, or construct the insured building or a covered detached garage must be in a fully enclosed building at the described location or on an adjacent property. See Section III.A Coverage A ‒ Building Property, Item 4 for more information.
Coverage D: Increased Cost of Compliance (ICC) - Limit of Liability (Continued)
No separate deductible applies. The maximum amount collectable under this policy for both Coverage A - Building Property and Coverage D - Increased Cost of Compliance, however, cannot exceed the statutory limit permitted under the Act.
Adjuster Tip (Coverage C - Debris Removal)
Non-covered items such as contents in a basement are excluded from debris removal coverage.
Flood Hazard Boundary Map (FHBM)
Official map of a community issued by FEMA, where the boundaries of the flood, mudflow, and related erosion areas having special hazards have been designated.
Flood Insurance Rate Map (FIRM)
Official map of a community on which FEMA has delineated the SFHAs, Base Flood Elevations (BFEs), and risk premium zones applicable to the community
Coverage C - Other Coverages
Other Coverages under the SFIP are: ★ Debris removal ★ Loss avoidance measures ★ Condominium loss assessments
Coverage A: Building Property - Coverage A Only Items (Continued)
Other building items are not excluded from coverage, but only those items listed in Section III.A.7 will be covered as part of the building: ★ Awnings and canopies ★ Built-in dishwashers ★ Built-in microwave ovens ★ Carpet permanently installed over unfinished flooring ★ Central air conditioners ★ Elevator equipment ★ Fire sprinkler systems ★ Walk-in freezers ★ Furnaces and radiators ★ Garbage disposal units ★ Hot water heaters, including solar water heaters ★ Light fixtures ★ Outdoors antennas and aerials fastened to buildings ★ Permanently installed cupboards, bookcases, cabinets, paneling and wallpaper ★ Plumbing fixtures ★ Pumps and machinery for operating pumps ★ Ranges, cooking stoves, and ovens ★ Refrigerators ★ Wall mirrors, permanently installed
Section 1: The Agreement
Outlines the promise the insurer makes to the policyholder
Coverage D - Increased Cost of Compliance (ICC): Conditions (Continued)
Payment for eligible demolition activities will be for the cost to demolish and clear the site of the building debris caused by the enforcement of current state or local floodplain management law or ordinance.
Definition of "Pollutants"
Substances that include, but are not limited to, any solid, liquid, gaseous, or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste. Waste includes, but is not limited to, materials to be recycled, reconditioned, or reclaimed. The SFIP does not pay for the testing for or monitoring of pollutants unless required by law or ordinance. See Section V. Exclusions
Coverage D - Increased Cost of Compliance (ICC) - Date of Loss. (Continue) It's important to note that:
The ICC payment amount cannot exceed the statutory limit: $250,000 - Single Family $500,000 - Non-Residential $250,000 ‒ Residential Condominium (multiplied by the number of units)
Coverage D: Increased Cost of Compliance (ICC), Eligibility. (Continued)
The NFIP must have paid the previous qualifying claim, and the state or community must have a cumulative substantial damage provision or repetitive loss provision in its floodplain management law or ordinance being enforced against the structure.
Coverage A - Building Property, Dwelling
The SFIP insures the dwelling at the described location against direct physical loss by or from flood or for property removed to safety for a period of 45 days at another location as set forth in Section III.C. Other Coverages, 2.b. Property Removed to Safety.
Base Flood Elevation (BFE)
The elevation of surface water resulting from a flood that has a one percent chance of equaling or exceeding that level in any given year. The BFE is shown on the Flood Insurance Rate Map (FIRM) for Zones AE, AH, A1-A30, AR, AR/A, AR/AE, AR/A1-A30, AR/AH, AR/AO, V1-V30, and VE
Definition of "Valued Policy"
The insured and the insurer agree on the value of the property insured that value being payable in the event of a total loss. The SFIP is not a valued policy.
Coverage A: Building Property - Coverage A Only Items
The items listed in the Dwelling Form in Section III.A.7 are considered building property; they cannot be paid under contents coverage unless Section III.B.4, applies.
Coverage D: Increased Cost of Compliance (ICC) - Limit of Liability
The limit of liability under Coverage D is $30,000. This coverage is only applicable to policies with building coverage (Coverage A) and is in addition to the building limit the policyholder selected on their application, which appears on the Declarations Page.
Definition of "Describe Location"
The location where the insured building(s) or personal property are found. The described location is shown on the Declarations Page
Damage to insured property under the General Property Form is covered if the discharge seepage, migration, release, or escape of the pollutants is caused by flood.
The maximum allowed under the General Property Form is $10,000
Coverage D - Increased Cost of Compliance (ICC) - Date of Loss. (Continue) It's important to note that:
The purpose of the HMGP is to reduce the loss of life and property due to natural disasters and to enable mitigation measures to be implemented during the immediate recovery from a disaster. The HMGP is authorized under Section 404 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act
Coverage B: Personal Property - Tenants (Con't)
The policy also covers improvements made or acquired solely at the policyholder's expense in the dwelling or apartment in which the policyholder resides, but for not more than 10 percent of the limit of liability for personal property on the Declarations Page. Use of this insurance is at the policyholder's option but reduces the personal property limit of liability.
Coverage C - Other Coverages - Debris Removal
The policy pays the expense to remove non-owned debris on or in the policyholder's insured property and owned debris anywhere. If the policyholder or a member of the household performs the removal work, the value of the work will be based on the Federal minimum wage. This coverage does not increase the Coverage A or Coverage B limit of liability
Coverage C: Other Coverages - Loss Avoidance Measures -Sandbags, Supplies, and Labor
The policy pays up to $1,000 for costs incurred to protect the insured building from a flood or imminent danger of flood for the following: ★ Reasonable expenses to buy sandbags, including the sand to fill them; fill for temporary levees; pumps; and plastic sheeting and lumber used in connection with these items
Coverage C: Other Coverages - Loss Avoidance Measures. Property Removed to Safety
The policy pays up to $1,000 for the reasonable expenses the policyholder incurs to move insured property to a place other than the described location in order to protect it from flood or imminent danger of flood. Reasonable expenses include the value of the work, at Federal minimum wage, that the policyholder or a member of his or her household performs.
Coverage D - Increased Cost of Compliance (ICC) - Date of Loss. (Continue) It's important to note that:
There is no "assignment of Coverage D" except to the community when it is in conjunction with a FEMA program such as the Hazard Mitigation Grant Program (HMGP). The HMGP provides grants to states and local governments to implement long-term hazard mitigation measures after a major disaster declaration.
The Dwelling Form does not define Flood Hazard Boundary Map or Flood Insurance Rate Map
These definitions are found in the Flood Insurance Manual.
Coverage D pays for compliance activities that exceed those standards under these conditions: (Continued)
This also includes compliance activities in zones where BFEs are being increased and a flood-damaged structure must comply with the higher advisory BFE. Increased Cost of Compliance coverage does not apply to situations in B, C, X, or D Zones where the community has derived its own elevations and is enforcing elevation or floodproofing requirements for flood-damaged structures to elevations derived solely by the community
Coverage A: Building Property - Building Under Construction
When a building is under construction, the deductible is doubled (see Dwelling Form Section VI. Deductibles, second paragraph of provision A) If there is no work on the building for a period of 90 continuous days, coverage ceases until such time as work is resumed.
Coverage D - Increased Cost of Compliance (ICC): Conditions
When a structure covered under Coverage A - Building Property sustains a loss caused by a flood, the Coverage D payment for the loss will be for the increased cost to elevate, floodproof, relocate, or demolish (or any combination of these activities) caused by the enforcement of current state or local floodplain management law or ordinance.
Coverage D - Increased Cost of Compliance (ICC): Conditions (Continued) (Part 3)
When the building is repaired or rebuilt, it must be intended for the same occupancy as the present building unless otherwise required by current state or local floodplain management law or ordinance.
Definition of a "Pre-Frim" Building
a building built or substantially improved on or before the effective date of the initial FIRM or December 31, 1974. Note that this term is not defined in the policy.
Coverage D - Increased Cost of Compliance (ICC): Other Provisions. The following provisions apply to ICC coverage:
★ Increased Cost of Compliance coverage will not be included in the calculation to determine whether coverage meets the 80 percent insurance-to-value requirement for replacement cost coverage ★ All other conditions and provisions of this policy apply
"We", "Us" and "Our" refer to
the insurer
Coverage C: Other Coverages - Loss Avoidance Measures -Sandbags, Supplies, and Labor (Con't). This coverage only applies if one of these conditions occurs:
★ A general and temporary condition of flooding in the area near the described location must occur, even if the flood does not reach the insured building ★ A legally-authorized official must issue an evacuation order or other civil order for the community in which the insured building is located calling for measures to preserve life and property from the peril of flood. This coverage does not increase the Coverage A or Coverage B limit of liability.
Definition of a "Building"
★ A structure with two or more outside rigid walls and a fully secured roof that is affixed to a permanent site ★ A manufactured home, also known as a mobile home, built on a permanent chassis, transported to its site in one or more sections, and affixed to a permanent foundation. ★ A travel trailer without wheels, built on a chassis and affixed to a permanent foundation, that is regulated under the community's floodplain management and building law or ordinance
Coverage D - Increased Cost of Compliance (ICC): - Exclusions. (Continued) The SFIP will not pay ICC coverage for any of the following:
★ Any code upgrade requirements (e.g., plumbing or electrical wiring) not specifically related to the state or local floodplain management law or ordinance ★ Any compliance activities needed to bring additions or improvements made after the loss occurred into compliance with state or local floodplain management law or ordinance ★ Loss due to any law or ordinance that the policyholder was required to comply with before the current loss
Coverage D - Increased Cost of Compliance (ICC): - Exclusions. (Continued) The SFIP will not pay ICC coverage for any of the following:
★ Any rebuilding activity to standards that do not meet the NFIP's minimum requirements. This includes any situation where the policyholder has received from the state or community a variance in connection with the current flood loss to rebuild the property to an elevation below the BFE. ★ Increased Cost of Compliance for a garage or carport.
Coverage D - Increased Cost of Compliance (ICC): - Exclusions. (Continued) The SFIP will not pay ICC coverage for any of the following:
★ Any structure insured under an NFIP Group Flood Insurance Policy ★ Assessments made by a condominium association on individual condominium unit owners to pay increased costs of repairing commonly owned buildings after a flood in compliance with state or local floodplain management law or ordinance
Coverage D: Increased Cost of Compliance (ICC), Eligibility. A structure covered under Coverage A - Building Property sustaining a loss caused by a flood as defined by this policy must:
★ Be a repetitive loss structure ★ Be a structure insured under the NFIP ★ Have suffered flood damage on two occasions during a 10-year period which ends on the date of the second loss ★ Have incurred a cost to repair the flood damage that equaled or exceeded 25 percent of the market value of the structure at the time of each loss ★ Have incurred a cost to repair that equals or exceeds 50 percent of the market value of the structure at the time of the flood
Coverage D - Increased Cost of Compliance (ICC): - Exclusions. The SFIP will not pay ICC coverage for any of the following:
★ Buildings insured under the NFIP's Emergency Program ★ The cost associated with enforcement of any ordinance or law that requires any insured or others to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to or assess the effects of pollutants ★ The loss in value to any insured building or other structure due to the requirements of any ordinance or law ★ Any code upgrade requirements (e.g., plumbing or electrical wiring) not specifically related to the state or local floodplain management law or ordinance ★ Any compliance activities needed to bring additions or improvements made after the loss occurred into compliance with state or local floodplain management law or ordinance ★ Loss due to any law or ordinance that the policyholder was required to comply with before the current loss ★ Any rebuilding activity to standards that do not meet the NFIP's minimum requirements. This includes any situation where the policyholder has received from the state or community a variance in connection with the current flood loss to rebuild the property to an elevation below the BFE ★ Increased Cost of Compliance for a garage or carport ★ Any structure insured under an NFIP Group Flood Insurance Policy ★ Assessments made by a condominium association on individual condominium unit owners to pay increased costs of repairing commonly owned buildings after a flood in compliance with state or local floodplain management law or ordinance
Coverage D pays for compliance activities that exceed those standards under these conditions: (Continued)
★ Coverage D also pays for the incremental cost, after demolition or relocation, of elevating or floodproofing a structure during its rebuilding at the same or another site to meet state or local floodplain management law or ordinance, subject to Section 5, Exclusions. ★ This coverage also pays to bring a flood-damaged structure into compliance with state or local floodplain management law or ordinance even if the structure received a variance before the present loss from the applicable floodplain management requirements
Coverage D pays for compliance activities that exceed those standards under these conditions: (Continued)
★ Elevation or floodproofing above the BFE to meet state or local "freeboard" requirements (i.e., that a structure must be elevated above the BFE) ★ Under the minimum NFIP criteria at 44 CFR 60.3(b)(4), states and communities must require the elevation or floodproofing of structures in unnumbered A Zones to the BFE where elevation data is obtained from a Federal, state, or other source. Such compliance activities are also eligible for Coverage D
Coverage D pays for compliance activities that exceed those standards under these conditions:
★ Elevation or floodproofing in any risk zone to preliminary or advisory BFEs provided by FEMA which the state or local government has adopted and is enforcing for flood-damaged structures in such areas. This includes compliance activities in B, C, X, or D Zones which are being changed to zones with BFEs.
The adjuster should be aware of the differences in coverage for improvements in the General Property Form & RCBAP, which define improvements as follows:
★ General Property Form: Fixtures, alterations, installations, or additions comprising a part of the insured building. ★ RCBAP: Fixtures, alterations, installations, or additions comprising a part of the residential condominium building, including improvements in the units
Coverage D - Increased Cost of Compliance Adjuster Duties. Some adjuster's duties under ICC include:
★ Inform the insured of ICC coverage if the risk appears to be substantially damaged ★ Submit the Adjuster Preliminary Damage Assessment (APDA) information to the NFIP Bureau and Statistical Agent by fax at (301) 577 3421 or by mail to P.O. Box 310, Lanham, MD - 20706 or send an email to [email protected] (See Bulletin W-09057)
Coverage D - Increased Cost of Compliance Adjuster Duties. (Continued) Some adjuster's duties under ICC include:
★ Obtain a copy of the signed construction contract that details costs to perform the mitigation activity and only include covered allowances in the ICC claim ★ Provide the insured with an Increased Cost of Compliance pamphlet. ★ Verify mitigation activity is in compliance with floodplain management guidelines.
The insurer will pay the policyholder for DIRECT physical loss by or from flood sustained to the insured property if the policyholder meets the following conditions:
★ Paid the correct premium. ★ Complied with all terms and conditions of the policy. ★ Furnished accurate information and statements
Coverage B: Personal PropertyIf the policyholder purchases personal property coverage, the SFIP insures against direct physical loss by or from flood to personal property inside a building at the described location. Note that:
★ Personal property must be owned by the policyholder or family members of the policyholder's household, or at the policyholder's option, the property owned by the policyholder's guests or servants ★ Personal property is covered for a period of 45 days at another location as set forth in the SFIP in Section III.C. Other Coverages, 2.b. Property Removed to Safety ★ Personal property in a building that is not fully enclosed must be secured to prevent floatation out of the building. If the personal property does float out during a flood, it will be conclusively presumed that it was not reasonably secured. In that case there is no coverage for such property
Coverage D - Increased Cost of Compliance (ICC) - Date of Loss. It's important to note that:
★ The date of loss for an ICC claim is the date of loss for the underlying flood claim ★ The policyholder has four years from the date of loss or any extension period granted by the Administrator in which to complete the mitigation measure(s) ★ Bulletin W-13006 amends all prior bulletins regarding ICC
Coverage A: Building Property The Dwelling Form insures against direct physical loss by or from flood to:
★ The dwelling ★ Additions & extensions ★ Detached garage at the described location ★ Materials & supplies ★ Building under construction ★ Manufacturer (mobile) home or travel trailer ★ Property covered under Coverage A only ★ Limitations in coverage for Post-FIRM elevated buildings & buildings constructed with basements
Coverage D - Increased Cost of Compliance (ICC): - Exclusions. (Continued) The SFIP will not pay ICC coverage for any of the following:
★ The loss in residual value of the undamaged portion of a building demolished as a consequence of enforcement of any state or local floodplain management law or ordinance ★ Any Increased Cost of Compliance under this Coverage D: ~ Until the building is elevated, flood-proofed, demolished, or relocated on the same or to another premises. ~ Unless the building is elevated, flood-proofed, demolished, or relocated as soon as reasonably possible after the loss, not to exceed 2 years
Coverage C: Other Coverages - Loss Avoidance Measures -Sandbags, Supplies, and Labor (Con't)
★ The value of work, at the Federal minimum wage, that the policyholder or a member of his or her household performs.
