Flashcards in National Flood Insurance Program (NFIP) Deck (33)
The three standard flood insurance policy coverage forms available are the:
•general property form
•residential condominium building association policy (RCBAP) form
However, even homes in moderate- to low-risk flood zones are exposed to flooding. In fact, 25 percent of flood losses occur in these zones. A "___ __ " policy is available on property in moderate-risk flood zones.
The dwelling form is issued to home owners, residential renters, and owners of residential buildings containing one to four units. In both the NFIP regular and emergency program communities, 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 a nonresidential buildings
The general property form is issued to the owners of residential buildings with five or more units. In both the NFIP regular and emergency program communities, this form provides building and contents coverage for these and similar eligible properties:
•residential cooperative buildings
•hotels, motels, tourist homes, and rooming houses that have more than four units where the normal guest occupancy is six months or more
Residential Condominium Building Association Policy Eligibility: This policy is issued to residential condominium associations on behalf of association and unit owners. Available only in NFIP regular program communities, the form provides building coverage and, if desired, coverage of commonly owned contents for residential condominium buildings with __ percent or more of their total floor area in residential use.
Building Property Eligibility: Flood insurance may be written only on a structure with __ or more outside rigid walls and a fully secured roof affixed to a permanent location. Structures must resist flotation, collapse, and sideways motion.
Building Property Eligibility: At least __ percent of the actual cash value of the property, including machinery and equipment which are a part of the building, must be above ground level, unless the lowest level is at or above the base flood elevation (BFE) and is below ground because dirt has been used as insulation material in conjunction with energy-efficient building techniques.
Building Property Eligibility: The BFE indicates the water surface elevation resulting from a flood that has a __ percent chance of equaling or exceeding that level in any one particular year.
For manufactured homes insured under policies effective on or after October 1, 1982, the home must be ____ . It must also be anchored if located in an SFHA.
affixed to a permanent foundation
Flood insurance is essentially a peril policy. Therefore, the definition of flood is critical.
For coverage to apply, the flood must be a general condition that covers two or more acres of normally dry land area or two or more properties (at least one of which is the insured's property). In other words...
if the flood is confined to the insured's property, there may be no coverage.
FEMA defines a mudflow—which is, in effect, a type of flood—as
"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."
Coverage on building property (Coverage A) applies to the ___ described on the policy declarations page.
Coverage on building property (Coverage A) applies to the dwelling described on the policy declarations page.
Coverage applies only at the location described on the declarations page or at another location —for up to 45 days—if ...
the property is moved there to protect it from the imminent danger of flood.
Covered Personal Property (Coverage B): If personal property coverage (Coverage B of the policy) has been purchased, it applies only to ___ described in the application.
personal property that is inside the fully enclosed building
The personal property provisions of the dwelling form specify that coverage is provided for property owned by the named insured or household family members. It also covers, at the insured's option, property owned by ___ or ___ .
guests or servants
Covered Property and Additional Coverages: Covered Building Property
Covered Property and Additional Coverages: Covered Personal Property
Covered Property and Additional Coverages: Other Coverages
Covered Property and Additional Coverages: Increased Cost of Compliance
Key Exclusions: No coverage is provided for
loss of use of the covered property,
lost revenue or profits,
loss from interruption of business or production,
or any other economic loss.
Key Exclusions: Also not covered is 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.
Key Exclusions: In addition, no coverage is provided for any loss to property caused directly by earth movement even if the earth movement is
caused by flood.
In many cases, the maximum amount of flood insurance available in the regular program is less than the
total insurable value of the property.
Loss Settlement Valuation and Coinsurance for Dwelling Form and RCBAP Form
The dwelling form and the RCBAP offer the following three methods of settling losses, and each is used for a different type of property:
•special loss settlement
•actual cash value
For the dwelling form, the replacement cost valuation applies to a single-family dwelling in most cases. The insurer agrees to pay or replace the damaged dwelling after applying the deductible and without deduction for depreciation, but not more than the least of these: (3)
•the building limit on the declarations page;
•the replacement cost of the damaged part of the dwelling, with materials of like kind and quality;
•the necessary amount spent to repair or replace the damaged part of the dwelling for like use.
For the dwelling form, this loss settlement applies to a single-family dwelling that is a manufactured or mobile home or is a travel trailer and serves as the insured's principal residence.
Special Loss Settlement
For the dwelling form, this applies to a single-family dwelling in most cases. The insurer agrees to pay or replace the damaged dwelling after applying the deductible and without deduction for depreciation,
Special Loss Settlement : For a total loss, the insurer pays the least of of these:(3)
•the replacement cost of the dwelling;
•1.5 times the actual cash value of the dwelling; or
•the building limit shown on the declarations page.