FLOOD INSURANCE AND RISK MANAGEMENT

Presented by: SANDI KRUISE INSURANCE TRAINING www.kruise.com 1-800-517-7500

TABLE OF CONTENTS Flooding is a National Problem ................................................................................................4 Claims .................................................................................................................................... 5 Marketing ............................................................................................................................... 6 Mandatory purchase requirement for flood insurance .......................................................... 7 Assistance for Agents.......................................................................................................... 7 EXCLUSIONS AND LIMITATIONS FOR FLOOD IN HOMEOWNERS INSURANCE .................8 ISO HO FLOOD EXCLUSION ............................................................................................. 8 Federal Disaster Assistance ..................................................................................................10 THE NATIONAL FLOOD INSURANCE PROGRAM (NFIP) .....................................................12 Federal Emergency Management Agency.............................................................................13 The History & Development of the NFIP ................................................................................13 Overview of the NFIP ............................................................................................................15 Flood Insurance ......................................................................................................................16 Eligibility ................................................................................................................................16 The Emergency Program ......................................................................................................17 The Regular Program ............................................................................................................18 Summary...............................................................................................................................19 NFIP FLOOD COVERAGE .......................................................................................................20 Coverage Effective Date .......................................................................................................20 WAITING PERIOD ................................................................................................................20 PURCHASING PROCEDURE...............................................................................................21 ELIGIBILITY ..........................................................................................................................22 The types of property that can be insured against flood loss: ............................................ 22 The types of property not insurable under the NFIP .......................................................... 23 Coastal Barrier Resources System........................................................................................24 Rates ....................................................................................................................................24 Policy terms available under the NFIP...................................................................................25 The "grace period" provided under the NFIP’s flood policy ................................................ 25 WRITE YOUR OWN (WYO) .....................................................................................................25 Jurisdiction over the WYO Program ......................................................................................26 COMMUNITY ELIGIBILITY REQUIREMENTS .........................................................................27 Floodplain Management .........................................................................................................27 Minimum NFIP Floodplain Management Requirements.........................................................28 Ordinance Adoption ..............................................................................................................30 Monitoring Community Compliance .......................................................................................31 Actions Against Communities For Failure to Enforce .............................................................31 Actions Against Individual Properties For Failure to Comply .................................................32 FLOOD MAPS ..........................................................................................................................33 Flood Hazard Identification and Risk Assessment ...............................................................33 The “100-year” Standard .......................................................................................................33 Identifying and Mapping Flood-Prone Areas..........................................................................33 Flood Mapping Process.........................................................................................................34 Changes to the Flood Maps ..................................................................................................34 FEMA Tutorial -- How To Read A FIRM (Flood Map): ...........................................................35 FLOOD HAZARD ZONES ........................................................................................................36 NFIP's Flood Insurance Manual .............................................................................................38 Ratemaking ...........................................................................................................................38 Mandatory Flood Insurance Purchase Requirement ............................................................39 Federal lending and insuring institutions affected by the requirements of the NFIP ........... 39 MORTGAGE PORTFOLIO PROTECTION PROGRAM ........................................................40

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Other NFIP Activities ..............................................................................................................40 COMMUNITY RATING SYSTEM ..........................................................................................40 Flood Mitigation Assistance Program ....................................................................................41 OVERVIEW OF THE NATIONAL FLOOD INSURANCE PROGRAM .......................................43 Flood Insurance Policy ..........................................................................................................43 TYPES OF POLICIES AVAILABLE .......................................................................................43 LOSS SETTLEMENT BASIS.................................................................................................44 COVERED PERILS ...............................................................................................................44 EXCLUSIONS .......................................................................................................................44 DWELLING COVERAGE ......................................................................................................44 CONTENTS COVERAGE .....................................................................................................45 Other Coverages ...................................................................................................................45 DEBRIS REMOVAL COVERAGE .........................................................................................45 PROPERTY NOT COVERED ...............................................................................................46 DEDUCTIBLES .....................................................................................................................46 LIBERALIZATION CLAUSE ..................................................................................................47 MORTGAGEE INTEREST ....................................................................................................47 OTHER INSURANCE............................................................................................................47 IN EVENT OF LOSS .............................................................................................................47 CANCELLATION PROVISIONS............................................................................................48 The Preferred Risk Policy.......................................................................................................48 Eligibility for the Preferred Risk Policy: .............................................................................. 48 Coverage: ......................................................................................................................... 48 Rates................................................................................................................................. 49 National Flood Insurance Program ........................................................................................50 Dwelling Policy........................................................................................................................50 Introduction ...........................................................................................................................50 Insuring Agreement ...............................................................................................................51 ARTICLE 1 - PERSONS INSURED.......................................................................................52 ARTICLE 2 - DEFINITIONS ..................................................................................................52 ARTICLE 3 - LOSSES NOT COVERED ................................................................................60 ARTICLE 4 -PROPERTY COVERED ....................................................................................65 COVERAGE A - Building Property ........................................................................................65 COVERAGE B - Personal Property .......................................................................................71 COVERAGE C- DEBRIS REMOVAL.....................................................................................73 COVERAGE D - INCREASED COST Of COMPLIANCE .......................................................74 ARTICLE 5 - SPECIAL PROVISIONS APPLICABLE TO COVERAGES A, B, AND C...........82 ARTICLE 6 - PROPERTY NOT COVERED ..........................................................................86 ARTICLE 7 - DEDUCTIBLES ................................................................................................93 ARTICLE 8 - REPLACEMENT COST PROVISIONS ............................................................95 ARTICLE 9 - GENERAL CONDITIONS AND PROVISIONS .................................................99 ARTICLE 10 - LIBERALIZATION CLAUSE .........................................................................115 ARTICLE 11 - WHAT LAW GOVERNS ...............................................................................116 PROCEDURES IN CASE OF A FLOOD ......................................................................... 116 DIFFERENCE IN CONDITIONS - DIC .................................................................................... 117 New ISO Flood Form ............................................................................................................. 120 FLOOD RISK MANAGEMENT ............................................................................................... 121 Coping With a Flood: Before, During and After ....................................................................121 Some good advice from the Red Cross: ..............................................................................121 Before a Flood ....................................................................................................................121 Once The Flood Arrives ......................................................................................................123

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After The Flood ...................................................................................................................123 Disaster Supplies Kit ............................................................................................................ 124 Inspecting Utilities In A Damaged Home .............................................................................132 National Flood Insurance Program Glossary of Terms ...................................................... 133 NFIP Commonly Used Acronyms ........................................................................................140 A Key To The Acronyms Used by NFIP ............................................................................... 140 NFIP Flood Zone Explanations ............................................................................................ 143 NFIP Flood Zones ...............................................................................................................143 NFIP REGIONAL OFFICES ................................................................................................145 FEMA and NFIP Regional Offices .......................................................................................146 STATE NFIP COORDINATORS .........................................................................................148 INDEX..................................................................................................................................... 152

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Flooding is a National Problem

Devastating floods occur throughout the U.S. every year. Changing weather patterns coupled with over-development and leveling of forests that reduce the land's natural ability to absorb water, are increasing the flood risk for many...even those who don't live near water. The Federal Emergency Management Agency (FEMA) defines flood as "a general and temporary condition of partial or complete inundation of normally dry land areas from overflow of inland or tidal waters, or from the unusual and rapid accumulation of runoff of surface waters from any source." For most people, their home is by far their most valuable possession. But floods damage more homes in the U.S. than any other natural disaster. Of all natural disasters that occurred from 1998 through 2002, floods caused 61 percent of all property damage. Flooding causes more than $2 billion in property damage each year, and losses due to flooding are not covered under most homeowners or business policies. However, flood insurance is available to protect homes and businesses and their contents in communities that participate in the National Flood Insurance Program (NFIP). 

There is a 26% chance of experiencing a flood during the life of a 30-year mortgage compared to only a 4% chance of fire.



The average Flood Insurance premium is just over $400 per year for an average of $100,000 in coverage.

Some geographic areas are more susceptible to flooding than others. Areas obviously susceptible to flooding lie along the shore, and adjacent to large waterways. Smaller waterways can become problems when natural or man-made obstructions create a backup, causing the water to exit its normal waterway and flood a large area. Poor natural drainage, inadequate runoff systems, and very heavy rainfall can cause flooding even in areas not normally prone to flooding. But it's not just high-risk areas that are flooded. All areas are susceptible to flooding, although in varying degrees; in fact, 25% of all flood claims occur in the low-to-moderate risk areas. Flooding can be caused by heavy rains, melting snow, by inadequate drainage systems, levees and dams that fail, as well as by tropical storms and hurricanes. Floods can sweep away everything that took a lifetime to accumulate, leaving a thick residue of mud and debris behind. Flood losses are the type of exposures that are usually avoided by the private insurance marketplace. A single loss event may affect hundreds and even thousands of persons at the

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same time, and the loss costs are enormous. No private insurer has the financial resources to handle such a catastrophic source of loss. Until the late 1960s, most property owners were unable to get insurance coverage against flood damage. Since private insurance firms, aware of the potential for catastrophic losses, were unwilling to assume the financial risk, the burden fell on taxpayers to provide costly disaster relief to a growing number of flood victims. In 1968 the government established a National Flood Insurance Act, which was further defined by the Flood Disaster Protection Act in 1973. The purposes of this legislation were twofold: 

To encourage communities to adopt zoning and building regulations that would lessen future flood losses, and



To make flood insurance available for properties in participating communities.

Today, the National Flood Insurance Program (NFIP) insures more than 4.6 million policyholders in over 20,000 communities across the U.S. It is administered by the Federal Emergency Management Agency (FEMA). Flood damage has been reduced by nearly $1 billion a year through partnerships with communities, the insurance industry, and the lending industry. Further, buildings constructed in compliance with NFIP building standards suffer approximately 80 percent less damage annually than those not built in compliance. In addition, every $3 paid in flood insurance claims saves $1 in disaster assistance payments paid by taxpayers. Claims Claims under the NFIP require, as do claims in other types of insurance, that the insured file a Proof of Loss. A "Proof of Loss" is a statement made by the policyholder, which substantiates his/her insurance claim. A printed form is usually available from the adjuster assigned to the claim. This must be submitted within 60 days of the loss, unless waived. Claims can be adjusted using either an independent adjuster or an adjuster employed by a company writing flood insurance. Under all NFIP policies, the insured pays a portion of the loss through the application of a deductible. In FY 2002 and 2003, the NFIP paid flood victims over $792 million in claims. The NFIP’s historical average loss year is approximately $700 million in loss payments. At this level the Program is self-supporting for that year. The NFIP has not been capitalized, but generates surplus during less-than-average-loss years and has borrowing authority with the U.S. Treasury to cover losses in the event that policyholder funds and investment income are inadequate. It does not use taxpayer funds to pay claims, operating expenses, or offset any shortfalls in premium from policies paying a subsidized flood insurance rate. Having twenty-six percent of policyholders paying significantly less than full-risk premiums impedes the ability to generate surplus or to repay borrowed funds, which depends on levels of annual losses that are highly variable. During 2004, the NFIP processed more claims than any year in the history of the program. The NFIP processed 75,022 claims and paid more than $2 billion to flood insurance policyholders. This includes more than 56,000 claims and more than $1.8 billion for the four largest events (Charley, Ivan, Frances, and Jeanne) in 2004.

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Because of the devastation caused by hurricanes Katrina and Rita, 2005 was a record year, surpassing even 2004. The insured flood damage caused by the hurricanes of 2005 is estimated to exceed $24 billion, a figure 10 times greater than the amount of premium income the NFIP generated in all of 2005, and one-and-a-half times more than the total dollar value of claims the NFIP has paid out in its 37-year history. There are currently 217,000 flood insurance policies in force in New Orleans' four parishes alone, 80 percent of which flooded. Claims-todate throughout Louisiana, Mississippi, Alabama, and Florida have exceeded 175,000 and more are expected. Previously, the highest-cost single event in the program’s 37-year history was Tropical Storm Alison, which struck Harris County, Texas in 2001. More than $1.1 billion in claims were paid to policyholders. The second largest flood event in dollars paid was in May 1995 with payments totaling $583,952,604 and the third largest flood event in dollars in September 1999 with payments totaling $433,384,943. Since 1969, the NFIP has paid over $14 billion in losses that would otherwise have been paid by taxpayers through disaster assistance or borne by home and business owners themselves. NFIP floodplain management and hazard identification activities have significantly reduced the frequency and severity of flood damages. Structures built to NFIP criteria experience 80% less damage through reduced frequency and severity of losses. The NFIP floodplain management requirements are estimated to save $1 billion per year. Marketing Today, many Americans are either unaware that flood damage is not covered by their homeowner’s insurance policy or they are in denial about the serious flood risks to which they are exposed. A conservative estimate is that only about one-quarter of those in Special Flood Hazard Areas (SFHA) have coverage. For a number of flood disasters in the past few years, only 10-20% of the victims in SFHAs had flood insurance coverage. The remaining 80-90% must rely on taxpayer-funded Federal disaster assistance (which is very limited), loans which must be paid back, tax write-offs, or savings to help them recover. The insurance industry, which has been the major mechanism for the sale of flood insurance since the Program’s inception, has repeatedly stated that the key to selling flood insurance is public awareness on a national scale. Flood insurance advertising and promotional activities to educate consumers, heighten awareness, and make the insurance agent’s job easier. The Federal Emergency Management Agency’s (FEMA) strategy for increasing the number of Americans insured against flood damage includes:     

Financial incentives for Write Your Own (WYO) insurance companies to increase and retain policyholders. A public awareness and education campaign primarily targeting consumers to stimulate interest in buying flood insurance. Facilitating lender compliance with statutory flood insurance requirements through training, guidance materials, and regular communication with lending regulators, government sponsored enterprises, and lender trade associations. NFIP training for insurance agents. Simplifying NFIP processes to make it easier for agents to sell and consumers to buy.

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

Improving retention of policies.

Mandatory purchase requirement for flood insurance To obtain Federally secured financing to buy, refinance, build, repair, reconstruct or improve structures in Special Flood Hazard Areas borrowers are usually required to purchase flood insurance. Insurance is mandated as a condition to receive federal financial assistance for land acquisition and/or building construction within a SFHA of any participating community. A special flood hazard area is defined as land in the floodplain within a community subject to a one percent or greater chance of flooding in any given year. Assistance for Agents Credit cards are now accepted for flood insurance premiums. Several companies have developed flood insurance rating software. For a free list of rating products, call (202) 646FEMA and request document #23014. Agents and brokers in eligible areas may obtain NFIP supplies, including manuals, coverage applications, notice of loss forms and public awareness material designed for consumer education, at no charge, by writing: National Flood Insurance Program, Forms Order Unit, P. O. Box 499, Langham, MD 20706-0499. For more information, call the National Flood Insurance Program toll free at 1-800-CALLFLOOD, ext. 445.

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EXCLUSIONS AND LIMITATIONS FOR FLOOD IN HOMEOWNERS INSURANCE

Even so-called “all risks” homeowners forms do not provide flood coverage. Virtually all HO forms contain an exclusion for flood, and usually most other types of water damage as well, such as sewer backup, mudslide, and seepage of water through floors, walls, and openings in buildings.

ISO HO FLOOD EXCLUSION g. Water (1) Flood, surface water, waves, tides, tidal waves, overflow of any body of water, or their spray, all whether driven by wind or not; (2) Mudslide or mudflow; (3) Water that backs up or overflows from a sewer, drain or sump; or (4) Water under the ground surface pressing on, or flowing or seeping through: (a) Foundations, walls, floors, or paved surfaces; (b) Basements, whether paved or not; or (c) Doors, windows or other openings. But if Water, as described in g.(1) through g.(4) above, results in fire, explosion or sprinkler leakage, we will pay for the loss or damage caused by that fire, explosion or sprinkler leakage. Copyright, ISO Properties, Inc., 2001

Under the Homeowners special causes of loss form, the only water damage that is still covered after application of the flood and seepage exclusions is damage caused by leakage from an appliance or sprinkler system occurring over a period of less than 14 days. The water damage coverage extension grants coverage for the cost of tearing out and replacing otherwise undamaged portions of a building, if necessary, to repair a system or appliance that has caused a covered water damage loss. The "appliance leakage repair" limitation establishes that there is no coverage for the cost of repairs to the faulty appliance or system itself, with one exception. Coverage is provided for repairing an automatic fire extinguishing system that has caused a covered loss (known as a sprinkler leakage loss). Of the roughly eleven million households located in federally designated special flood hazard areas, only three million have elected to purchase the coverage. Despite efforts by the

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insurance industry and the federal government to acquaint people with the availability of flood insurance, there is still an ongoing problem in areas subject to catastrophic flooding. Insureds are often shocked when they discover that flood damage was not covered under their homeowner’s policy. Advance knowledge of this exclusion, and the availability of flood insurance, will help alleviate the problem. Coverage for flood and mudslide (but not sewer backup or seepage) can be obtained through the National Flood Insurance Program (NFIP) either directly or from any of NFIP's "Write Your Own" participating insurers. For properties exposed to a high risk of flood, the NFIP is frequently the only available source of coverage. Even with homeowners and flood policies in place there are still some uninsurable gaps in coverage that agents should make sure clients understand. The standard flood insurance policy does not provide any coverage for loss of use. Under article 3, losses not covered, the policy states "...we do not cover: 1. Loss of use of the insured property or premises; 2. Loss of access to the insured property or premises; 3. Your additional living expenses incurred while the insured building is being repaired or is uninhabitable for any reason." Only direct physical loss by or from a flood is covered. If a civil authority prohibits access to the insured premises, but the insured premises are undamaged, there is no coverage. There is no coverage either under the standard homeowner’s policy, since the prohibition to use the premises was not caused by direct damage to a neighboring premises from a "peril insured against." Loss caused by off premises power failure is excluded under the homeowner’s policy. The flood policy does not cover a loss caused by a power failure unless the failure results from physical damage to power equipment located on the insured premises, caused by a flood. There is no coverage for walks, decks, driveways, patios, pools, etc., that are located outside the perimeter, exterior walls of the insured dwelling. If the insured elects to cover at the time of a loss, appurtenant structures, the amount of insurance available for other loss under coverage A, building property, is reduced accordingly. Regarding the flood policy, "appurtenant structures" are defined as detached garages and carports, only. No other structures are covered. Under flood policies there is no coverage for increased cost to repair or rebuild because of any ordinance or law regulating reconstruction or repair. Even with all of these exclusions, the Flood Policy still provides very meaningful coverage for the bulk of damages resulting from flood.

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Federal Disaster Assistance

Many people decide not to purchase flood insurance under the mistaken idea that all of their flood damages will be paid for by the government through Federal Disaster Assistance. However, when a flood occurs, there is no guarantee that Federal assistance will be available or that the homeowner will qualify for it. Before any flood victim is eligible to receive Federal disaster assistance, the President must declare a Federal disaster. Federal disaster assistance declarations are awarded in fewer than 50 percent of flooding incidents. Even then, disaster relief is usually a low-interest loan that must be repaid, in addition to their mortgage and other debts. Claimants may be required to purchase a flood policy as a condition of receiving Federal assistance. The best financial protection from floods is a National Flood Insurance policy. Flood insurance is far better protection than depending on Federal disaster assistance. With a flood insurance policy, clients can be reimbursed for covered losses, even if a disaster is not Federally declared. In contrast, Federal disaster assistance is usually a loan - repayable in full plus interest. Flood insurance is affordable. The average flood insurance premium costs about $400 a year for an average of $100,000 of coverage. In contrast, paying back a $50,000 disaster home loan, for example, will cost an average of $300 a month - with an average repayment period of 20 years. Remember, this is in addition to any regular mortgage payments already being made. In fact, the annual premium for an NFIP policy is less expensive than interest alone on Federal disaster loans. To summarize, if your clients are not insured, and a Federal disaster is not declared, they may have no hope for recovery.     

Federal disaster assistance is only available if the President declares a disaster. More than 90 percent of all disasters in the United States are not Presidentially declared. Buildings in areas with the greatest risk of flooding, called Special Flood Hazard Areas (SFHAs), have a 26 percent chance of being flooded during a 30-year mortgage. Between 20 and 25 percent of all claims paid by the NFIP are for policies outside the Special Flood Hazard Area. To qualify for Home Repair Assistance, the home must have relatively minor damage that can be repaired fairly quickly.

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             

Clients cannot qualify for Rental Assistance unless their home has been destroyed or significantly damaged. Floods account for 60 percent of all Presidentially declared disasters. Homeowners, business owners, and renters can all purchase flood insurance, as long as their community participates in the NFIP. Insureds don't have to wait in lines or qualify for Federal disaster assistance with flood insurance. Flood insurance claims are handled quickly so flood victims can recover quickly. When insureds file a flood insurance claim, they can request a partial payment immediately so they can recover faster. Flood insurance claims are paid by policyholder premiums, not taxpayer dollars. Insureds are in control. Flood insurance claims are paid even if the President does not declare a disaster. With flood insurance, there is no payback requirement. Flood insurance policies are continuous, and cannot be non-renewed or cancelled for repeat losses. Flood insurance reimburses clients for covered losses up to $250,000 for homeowners and up to $500,000 for businesses. Federal disaster assistance declarations are awarded in fewer than 50% of flooding incidents. The most typical form of disaster assistance is a loan that must be repaid with interest. Repayment on a $50,000 disaster home loan is $311 a month or $3,730 annually, and will take over 20 years to repay.

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THE NATIONAL FLOOD INSURANCE PROGRAM (NFIP)

The Federal Emergency Management Agency (FEMA) estimates that there are between six and eight million buildings in the United States with a flood exposure, and that approximately six million of these buildings are uninsured for this hazard. The water damage exclusion in standard property forms, both personal and commercial, applies to flood damage and, therefore, no coverage exists for this peril in these policies. Prior to the NFIP, the national response to flood disasters consisted of building flood control works (dams, levees, seawalls, etc.) and providing disaster relief to flood victims. These actions often failed to reduce losses or discourage unwise development and in some instances actually encouraged risky development. To compound the problem, flood coverage was not available from insurance companies, and there were no incentives to use building techniques and methods to reduce flood damage. Facing the prospect of mounting flood losses and escalating costs to taxpayers, Congress created the NFIP which: 

Mitigates future flood damage



Provides protection for property owners against potential losses

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Uses an insurance mechanism in which premiums for protection are paid by those most in need of coverage, rather than by all taxpayers

The U.S. Congress established the National Flood Insurance Program (NFIP) with the passage of the National Flood Insurance Act of 1968. The NFIP is a Federal program enabling property owners in participating communities to purchase insurance protection against flood losses in exchange for State and community floodplain management regulations that reduce future damages from flood. Participation in the NFIP is based on an agreement between communities and the Federal Government. If a community adopts and enforces a floodplain management ordinance to reduce future flood risk to new construction in floodplains, the Federal Government will make flood insurance available within the community as a financial protection against flood

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losses. This insurance is designed to provide an alternative to disaster assistance, which will reduce the escalating costs to taxpayers of repairing damage to buildings and their contents caused by floods. NFIP activities that are described in detail in this course include:       

How flood-prone areas are identified and mapped; Floodplain management requirements that a community must adopt and enforce; How flood insurance is sold; What structures are eligible for flood insurance coverage and the amount of coverage available; How flood insurance policies are rated and claims are paid; The Community Rating System; and The Mandatory Purchase of Flood Insurance Requirement

A list of acronyms used by the NFIP is provided in the appendix.

Federal Emergency Management Agency The Federal Emergency Management Agency (FEMA) is an independent Federal agency reporting to the President. Founded in 1979, FEMA’s mission is to Lead America to prepare for, prevent, respond to, and recover from disaster. FEMA is responsible for coordinating the Federal response to floods, earthquakes, hurricanes, and virtually all other natural or man-made disasters and providing disaster assistance to States, communities, and individuals. Disasters are declared by the President at the request of the Governor of the impacted State if the impacts of the disaster exceed the ability of the State and the affected communities to respond. For declared disasters, FEMA activates the Federal Response Plan with 27 agencies. The Federal Response Plan provides a framework for the coordination of assistance to States, communities, and individuals by Federal agencies. The Federal Insurance and Mitigation Administration (FIMA) within FEMA is responsible for administering the National Flood Insurance Program (NFIP) and administering programs that provide assistance for mitigating future damages from natural hazards. FEMA also provides training and technical assistance to governmental and non-governmental entities in preparing for and responding to disasters and for protecting against future disasters through mitigation. In addition to a headquarters office in Washington, D.C., FEMA has 10 regional offices.

The History & Development of the NFIP Up until 1968, Federal actions related to flooding were primarily responses to significant events that resulted in using structural measures to control flooding. Major riverine flood disasters of the 1920’s and 1930’s led to considerable Federal involvement in protecting life and property from flooding through the use of structural flood-control projects, such as dams and levees, with the passage of the Flood Control Act of 1936. Generally, the only available financial recourse to assist flood victims was in the form of disaster assistance. Despite the billions of dollars in

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Federal investments in structural flood-control projects, the losses to life and property and the amount of assistance to disaster victims from floods continued to increase. As early as the 1950’s, when the feasibility of providing flood insurance was first proposed, it became clear that private insurance companies could not profitably provide such coverage at an affordable price, primarily because of the catastrophic nature of flooding and the inability to develop an actuarial rate structure which could adequately reflect the risk to which flood-prone properties are exposed. In the 60’s, due to increasing flood losses and disaster relief costs, major steps were taken to redefine Federal policy and approaches to flood control. In 1966 Congress advocated a broader perspective on flood control including these five major goals:     

Improve basic knowledge about flood hazards; Coordinate and plan new developments in the floodplain; Provide technical services; Move toward a practical national program of flood insurance; and Adjust Federal flood control policy to sound criteria and changing needs.

House Document 465 and the prior feasibility study provided the basis for the National Flood Insurance Act of 1968. The primary purposes of the 1968 Act creating the NFIP are to:   

Better indemnify individuals for flood losses through insurance; Reduce future flood damages through State and community floodplain management regulations; and Reduce Federal expenditures for disaster assistance and flood control.

A key provision in the Act prohibits FEMA from providing flood insurance unless the community adopts and enforces floodplain management regulations that meet or exceed the floodplain management criteria established in accordance with the Act. The emphasis of the NFIP floodplain management requirements is directed toward reducing threats to lives and the potential for damages to property in flood-prone areas. Over 20,000 communities presently participate in the NFIP including nearly all communities with significant flood hazards. In addition to providing flood insurance and reducing flood damages through floodplain management regulations, the NFIP identifies and maps the nation’s floodplains. Mapping flood hazards creates broad-based awareness of the flood hazards and provides the data needed for floodplain management programs and to actuarially rate flood insurance. When the NFIP was created, the U.S. Congress recognized that insurance for “existing buildings” constructed before a community joined the Program would be prohibitively expensive if the premiums were not subsidized by the Federal Government. Most of these flood-prone buildings were built by individuals who did not have sufficient knowledge of the flood hazard to make informed decisions. Under the NFIP, “existing buildings,” generally referred to as Pre-FIRM (Flood Insurance Rate Map) buildings, were built before the flood risk was known and identified on the community’s FIRM. Currently about 26 percent of the 4.6 million NFIP policies in force are pre-FIRM subsidized. Available data on properties damaged by Hurricane Katrina suggest that roughly 60 percent of the damage claims were for these pre-FIRM, subsidized properties.

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In exchange for the availability of subsidized insurance for existing buildings, communities are required to protect new construction and substantially improved structures through adoption and enforcement of community floodplain management ordinances. The 1968 Act requires that full actuarial rates reflecting the complete flood risk be charged on all buildings constructed or substantially improved on or after the effective date of the initial FIRM for the community. These buildings are generally referred to as “Post-FIRM” buildings. Early in the Program’s history, the Federal Government found that providing subsidized flood insurance for existing buildings was not a sufficient incentive for communities to voluntarily join the NFIP nor for individuals to purchase flood insurance. To encourage participation and purchase of flood policies, Congress passed the Flood Disaster Protection Act of 1973, which prohibits Federal agencies from providing financial assistance for acquisition or construction of buildings, as well as certain disaster assistance in the floodplains of any community that did not participate in the NFIP by July 1,1975. The 1973 Act also required Federal agencies and federally insured or regulated lenders to require flood insurance on all grants and loans for acquisition or construction of buildings in designated Special Flood Hazard Areas (SFHAs) in communities that participate in the NFIP. This requirement is referred to as the Mandatory Flood Insurance Purchase Requirement. The SFHA is the area within the floodplain of a community subject to a 1 percent or greater chance of flooding in any given year, commonly referred to as the 100-year flood. This resulted in a dramatic increase in the number of communities that joined the NFIP in subsequent years; from 2,200 in 1973 to over 15,000 communities 4 years later. It also resulted in a dramatic increase in the number of flood insurance policies in force, with approximately 1.2 million flood insurance policies in force by 1977. Funding for the NFIP is provided through the National Flood Insurance Fund, which was established by the 1968 Act. Premiums collected are deposited into the fund, and losses, and operating and administrative costs are paid out of the fund. In addition, the Program has the authority to borrow up to $1.5 billion from the Treasury (Congress increased the NFIP’s statutory borrowing limit to $18.5 billion in November of 2005 because of Katrina), which must be repaid along with interest. Beginning in 1991, a Federal policy fee of $25 dollars, which was increased to $30 in 1995, is applied to most policies in order to generate the funds for salaries, expenses, and mitigation costs. Overview of the NFIP The three basic components of the Program are:   

Identifying and mapping flood-prone communities Requiring that communities adopt and enforce floodplain management regulations Providing flood insurance

Other aspects and components of the Program, including the Mandatory Purchase Requirement and the Community Rating System, are also described later in this course.

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Flood Insurance The 1968 Act authorizes the Director of FEMA to establish and carry out “a national flood insurance program which will enable interested persons to purchase insurance against loss resulting from physical damage to or loss of real property or personal property” resulting from flood. Flood insurance provides the mechanism by which floodplain occupants are compensated for flood damages. Flood insurance also provides a way for some of the financial burden of flood losses to be removed from taxpayers, for Federal disaster assistance and casualty loss deductions under Federal income taxes. The number of policies in force in the United States has increased from about 95,000 in 1973, to over 4.6 million currently. Any property owner of insurable property may purchase flood insurance coverage, provided the community in which the property is located is participating in the NFIP. The amount of flood insurance coverage in force as of October 1, 2005 is over $773 billion. In fiscal year 2001, FEMA took in about $1.5 billion in revenue, mostly from insurance premiums and a $30 Federal Policy fee on each policy sold or renewed. Revenues from insurance premiums are used to pay losses, pay interest to the Treasury, service the policies, and pay Increased Cost of Compliance claims that provide financial resources for protecting buildings from future flood damages. Revenue from the Federal Policy Fee supports almost all the flood mapping and floodplain management activities of the Program including the Flood Mitigation Assistance program. The Federal Insurance and Mitigation Administration (FIMA) a component of the Federal Emergency Management Agency (FEMA) manages the NFIP, and oversees the floodplain management and mapping components of the Program. Over 20,000 communities across the United States and its territories participate in the NFIP by adopting and enforcing floodplain management ordinances to reduce future flood damage. In exchange, the NFIP makes Federally backed flood insurance available to homeowners, renters, and business owners in these communities. The NFIP is self-supporting, which means that operating expenses and flood insurance claims are not paid for by the taxpayer, but through premiums collected for flood insurance policies. The Program has borrowing authority from the U.S. Treasury for times when losses are heavy, which must be repaid with interest. Eligibility Properties need not be located in special flood hazard areas in order to qualify for coverage. However, the NFIP makes flood insurance available only on properties located in participating communities. Participation in the NFIP is a two-stage process, beginning with the community's participation to the emergency flood program. Pending the creation of a flood insurance rate map (FIRM), which will identify all of the flood hazard zones in the community, properties in that community are eligible for flood insurance at emergency program rates, and subject to lower emergency program maximum limits. Emergency program rates apply to all insured properties without regard to the flood hazard associated with any particular property. Maximum limits available on

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commercial properties in emergency program communities are $100,000 on the building and $100,000 on its contents; more details to follow. The second stage of participation is the regular flood program. A community becomes a participant in the regular flood program once its flood hazard zones have been identified and published in a flood insurance rate map (FIRM). Regular program communities must agree to adopt and enforce certain flood plain management programs, including construction and zoning laws that minimize the risks of flood damage. The purchase of flood insurance is required in connection with federal loans on any property in the community that is located in special flood hazard areas. The Emergency Program The Emergency Program of the NFIP is the initial phase of a community's participation in the NFIP and was designed to provide a limited amount of insurance at subsidized rates. A community participating in the Emergency Program is usually provided with a Flood Hazard Boundary Map (FHBM), and the community is required to adopt limited floodplain management requirements to control future use of its floodplains. Fewer than 10 percent of the almost 20,000 communities participating in the NFIP remain in the Emergency Program, and FEMA plans to convert all communities to the Regular Program of the NFIP as quickly as possible. 1. Community applies for participation in the NFIP either (a) as a result of interest in eligibility for flood insurance, or (b) as a result of receiving notification from FEMA that it contains one or more SFHAs. Application includes adopted resolutions or ordinances to minimally regulate new construction in SFHAs. 2. FEMA authorizes the sale of flood insurance in the community up to the Emergency Program limits. FEMA assesses the community's degree of flood risk and development potential, and if appropriate. 3. FEMA arranges for a study of the community to determine base flood elevations and flood risk zones. Consultation with the community occurs at the start of and during the study. Communities with minimal or no flood risk are converted to the Regular Program without a study. 4. FEMA provides the studied community with Flood Insurance Rate Map delineating base flood elevations and flood risk zones. Community is given 6 months to adopt base flood elevations in its local zoning and building code ordinances, and to meet other requirements. 5. Community adopts more stringent ordinances and FEMA converts the community to the NFIP's Regular Program. Agents are responsible for determining whether a community is eligible and for obtaining the community identification number before they attempt to sell flood insurance. Local communities maintain a copy of the map, and this information is also available from FEMA. Contact the map service center at 800-358-9616. FEMA also has a web site at http://www.fema.gov for more information. For communities eligible for insurance under the emergency program, only the following limits of coverage are available:

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Emergency Program Flood Insurance Coverages Buildings

Coverage

Contents

Coverage

Single Family

$ 35,000

Residential

$ 10,000

Other Residential

$100,000

Non-Residential

$100,000

Non-Residential

$100,000

* For building coverage: single-family dwelling or two-to four-family dwelling, $35,000 ($50,000 in Hawaii, Alaska, U.S. Virgin Islands, and Guam); other residential, $100,000 ($150,000 in Hawaii, Alaska, U.S. Virgin Islands, and Guam); non-residential, $100,000 ($150,000 in Hawaii, Alaska, U.S. Virgin Islands, and Guam). Those communities notified as flood-prone which do not apply for participation in the NFIP within 1 year of notification, are ineligible for federal or federally-related financial assistance for acquisition, construction, or reconstruction of insurable buildings. The Regular Program A community participating in the Regular Program of the NFIP is usually provided with a Flood Insurance Rate Map (FIRM) and a detailed engineering study, termed a Flood Insurance Study (FIS) is often conducted. Under the Regular Program of the NFIP, more comprehensive floodplain management requirements are imposed on the community in exchange for higher amounts of flood insurance coverage. 1. FEMA authorizes the sale of additional flood insurance in the community up to the Regular Program limits. 2. Community implements adopted floodplain management measures. 3. FEMA arranges for periodic community assistance visits with local officials to provide technical assistance regarding complying with NFIP floodplain management requirements. 4. Local officials may request flood map updates as needed. FEMA evaluates requests, encourages cost-sharing, and issues revised maps as priorities dictate. Once FEMA has completed the flood study, which is aimed at developing technical information, including minimum first floor elevations for land use purposes, the results are given to the community. The community has 90 days in which to appeal the elevation figures established by FEMA. During this period, flood insurance at subsidized rates remains available under the emergency program. Once a final determination on flood elevation is made and accepted, FEMA publishes the flood insurance rate map (FIRM) for determining actuarial rates. When the

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map is published, the community is converted to the regular program and additional insurance is available.

Regular Program Flood Insurance Coverage Building Coverage

Basic Insurance Limits

Additional Insurance Limits

Total Insurance Available

Single Family Dwelling

$ 50,000

$200,000

$250,000

2-4 Family Dwelling

$ 50,000

$200,000

$250,000

Other Residential

$150,000

$100,000

$250,000

Non-Residential or Small Business

$150,000

$350,000

$500,000

Contents Coverage (per unit)

Basic Insurance Limits

Additional Insurance Limits

Total Insurance Available

Residential

$ 20,000

$ 80,000

$100,000

Non-Residential or Small Business

$130,000

$370,000

$500,000

If the insured is not the owner of the building described in the application, improvements to the building made or acquired at the insured's expense are covered. However, the coverage provided on tenant's improvements is subject to a sublimit of 10 percent of the personal property coverage limit. Summary Under the NFIP there are maximum amounts of coverage available under the Emergency Program and the Regular Program. Under the Emergency Program, non-actuarial, federally subsidized rates in limited amounts are available prior to completion of a community’s Flood Insurance Study (FIS). Once more detailed risk data is provided to the community in the form of a FIRM and a FIS, the community is entered into the Regular Program and full limits of coverage are made available. Nearly all participating communities are in the Regular Program, and individuals can purchase flood insurance up to the following amounts. As of August 2002 the average amount of insurance coverage purchased under the NFIP was $131,670, which includes both the building and its contents.

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NFIP FLOOD COVERAGE

Coverage Effective Date Several NFIP rules address the coverage effective date. Coverage purchased in connection with a loan is generally effective at the time of loan closing if required by the mortgage or the property is in a special flood hazard zone. Otherwise, coverage is generally effective 30 days from the date of the application. No coverage applies to any damage already in progress on the inception date of the policy. WAITING PERIOD Unlike other property insurance, agents who write policies under the NFIP cannot “bind” coverage. The NFIP uses a 30-day waiting period to prevent persons from purchasing flood insurance when disaster is imminent. The waiting period is the time between the application date and the date of acceptance. A standard 30-day waiting period applies to new applications and endorsements to increase coverage. For most new policies, the effective date will be 12:01 A.M., local time, on the 30th calendar day after the application date and the payment of premium. There are, however, numerous exceptions: 

New policies written in connection with making, increasing, extending, or renewing a loan are effective at the time of the loan closing, providing application is made and premium presented at or prior to the closing.



New policies in connection with mortgage portfolio reviews. (The mortgage portfolio protection program is designed to help lending institutions comply with the Flood Disaster Protection Act of 1973, as amended.



New policies written when the purchase of flood insurance is in connection with the revision or updating of a flood hazard boundary map (FHBM) or flood insurance rate map (FIRM)



New policies written on a submit-for-rate basis are effective at 12:01 A.M. local time on the 30th calendar day after the presentment of premium.

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PURCHASING PROCEDURE After a community qualifies for the sale of flood insurance, a policy may be purchased from any licensed property insurance agent or broker who is in good standing in all the states in which he/she is licensed. The usual procedure for purchasing an NFIP policy is as follows: 1. The lender informs the builder or buyer of a building that the property is in a special flood hazard area and that flood insurance must be purchased. 2. The insurance agent completes the necessary forms for the builder or buyer. In the case of structures built after the issuance of a Flood Insurance Rate Map (FIRM), the builder or buyer must obtain an elevation certification from a licensed engineer, architect, or surveyor. (See details below.) 3. The insurance agent submits the application, necessary certifications, and full premium to the NFIP. A separate application must be submitted, and a separate policy is issued, for each building for which building or contents insurance (or both) is being requested. Applications for coverage for properties that were constructed in the most hazardous zones (zones A1-A30, AE, AH, V1-V30, VE, and V) after the date of issuance of the initial flood map for the community must include an elevation certificate showing the elevation of the building's lowest floor above the area's "base flood elevation.” Elevation certificates for these properties should be readily available from the building or permits department of the community's city hall or county government office, if the property owner does not have a copy. If an elevation certificate was not prepared at the time the building was constructed, the property owner must arrange for preparation of an elevation certificate by a qualified surveyor or engineer in order to apply for coverage. The NFIP community number and the flood zone applicable to the property must be shown on the application. This information can be obtained from several different sources. An up-to-theminute Community Status Guide, showing the names, number, and FIRM dates of all participating communities (as well as the names of nonparticipating communities) in a given state is available from the Federal Emergency Management Agency (FEMA) via the Internet. The address is http://www.fema.gov/nfip/. Also, the permits or building department of the community's city hall or county government office can provide both the community number and the flood zone applicable to the property in question. The applicable flood zone can also be determined from a review of the flood map for the community. Flood maps can be obtained from the community's city hall or county government office or by calling NFIP at 1–800–358– 9616. Many of the Write-Your-Own insurers offer free zone determination services. Agents whose flood insurance policies are issued directly by the NFIP can contact the NFIP servicing office (1–800–638–6620) for assistance with zone determination. The correct premium for the amount of coverage being requested must be submitted along with the application. If, due to rating or calculation error, the premium submitted is insufficient to purchase the coverage requested, but the application is otherwise in order, the policy will be issued with the maximum coverage limits which the premium submitted will purchase. The insured will then be notified of the amount of additional premium required to purchase the requested limits, and if the additional premium is received by NFIP within 30 days, the policy limits will be amended to those originally requested, effective as of the policy inception date.

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Rating assistance is available from many of the Write-Your-Own insurers or from the NFIP servicing office (1–800–638–6620). Agents should take care to compute premiums accurately since under-coverage could result in errors and omissions claims ELIGIBILITY The 1968 Act establishes the scope of the flood insurance program for eligible structures. The 1968 Act requires that flood insurance be made available to 1-4 family residential buildings, small businesses, churches, other residential properties, other business properties, agricultural properties, properties occupied by private nonprofit organizations, and properties owned by State or local governments. Currently insurance is available for all these types of properties and their contents with limited exceptions. Property owners in NFIP communities may purchase flood insurance whether or not the building or its contents is located in the floodplain. The 1968 Act denies flood insurance "for any property which the Director finds has been declared by a duly constituted state or local zoning authority, or other authorized public body, to be in violation of a state or local laws, regulations, or ordinances". Flood insurance is not available and no new policy can be written to cover the building, nor can an existing policy be renewed. The types of property that can be insured against flood loss: Flood insurance may be written on any type of residential or nonresidential building located in an eligible community, provided it:    

Has two or more exterior rigid walls Is roofed Is fully anchored to prevent flotation, collapse, and lateral movement Is principally above ground (meaning at least 51% of its actual cash value, including machinery and equipment, is above ground level).

Contents of eligible buildings are also eligible for coverage. However, if contents are located in eligible buildings that do not have rigid walls on all sides, the contents must be secured to prevent flotation out of the building during flooding. Appurtenant structures are only covered under the dwelling form; other appurtenant structures must be written on separate policies. Blanket insurance is not allowed, although from two to ten buildings may be scheduled so long as they have the same ownership and the same location, or are located on contiguous properties. A mobile home (referred by the NFIP as manufactured housing) is eligible for flood insurance only if it is:  

On a permanent foundation Anchored to a permanent site if located in a special flood hazard area.

Anchoring entails over-the-top or frame ties to ground anchors, or in accordance with the manufacturer’s specifications, or in accordance with the community flood plain management requirements. Mobile homes insured continuously since September 30, 1982, can be renewed under previously existing requirements if affixed to a permanent foundation. Buses, travel

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trailers, and similar vehicles are not eligible as mobile homes or otherwise, even if they have been anchored to a foundation with their wheels removed. A doublewide mobile home -- one that, when assembled as a nonmovable permanent building -containing at least 600 square feet and measuring at least 16 feet wide, is not classified as a mobile home. Instead, for rating purposes, it is classified as one of the other building types. Condominium buildings and contents are likewise eligible, with the special provision that if a condominium unit owners association does not have adequate flood insurance, a unit owner may (often at the insistence of a mortgagee) purchase insurance for the contents and the unit. Cooperative buildings where at least 75% of the area of the building is used for residential purposes are considered as residential occupancies, and can currently be insured for a maximum building coverage of $250,000, on the general property form. Time-share buildings not in the condominium form of ownership, where at least 75% of the area is used for residential purposes, can also be insured for a maximum of $250,000 on the general property form. Timeshare buildings in the condominium form of ownership are eligible for coverage to the maximum currently allowed in the RCBAP program (replacement cost or number of units times $250,000). Newly constructed or substantially improved buildings that have floors partially over water, except for pre-FIRM buildings, must be submitted for an underwriting decision and rating, with the likelihood of very high rates. Newly constructed or substantially improved buildings located entirely in or on water or seaward of mean high tide are not eligible. However, pre-FIRM buildings constructed prior to October 1, 1982, and entirely over water are eligible for normal pre-FIRM rates. Post-FIRM buildings constructed prior to October 1, 1982, must be submitted for an underwriting decision and rate. Boathouses located partially over water are eligible if the building is partially over land, and also used for residential, commercial, or municipal purposes. The types of property not insurable under the NFIP Silos, grain storage buildings, and cisterns, even if they are of container type construction, are eligible, but other container type structures are not. Examples of the excluded types of containers are gas and liquid tanks, chemical or reactor container tanks or enclosures, brick kilns, and similar units and their contents. The contents of silos, grain storage buildings, and cisterns are insurable. Commercial contents are insurable except for contents located in an ineligible structure or in a building not fully walled. Bailees’ customer goods, automobiles, motorcycles, and motorized equipment are not eligible for coverage. Buildings over water or principally below ground, gas and liquid storage tanks, animals, birds, fish, aircraft, wharves, piers, bulkheads, growing crops, shrubbery, land, livestock, roads, machinery or equipment in the open, and motor vehicles are not insurable. Most contents and finishing materials located in a basement or in enclosures below the lowest elevated floor of an elevated post-FIRM building are not covered. Finally, property such as travel trailers, converted buses, or vans, are also ineligible for flood coverage. Buildings in the course of construction (builder’s risks) can be provided flood insurance for the benefit of the owner, builder, or mortgagee. However, there are conditions. The amount of the deductible for each loss occurrence before the building is walled and roofed is twice that selected to apply after the building is walled and roofed. There is no coverage until a building is walled and roofed where the lowest floor, including basement floor, of a non-elevated building or

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the lowest floor of an elevated building is below the base flood elevation in Zones AH, AE or A130, or is below the base flood elevation adjusted to include the effect of wave action in Zones VE or V1-30. Materials and supplies to be used in construction are not covered unless contained within an enclosed building either on the premises or adjacent to the premises. Coastal Barrier Resources System The purchase of flood insurance is also limited in the Coastal Barrier Resources System. Congress passed laws limiting Federal expenditures in certain coastal areas and designating them as a part of the Coastal Barrier Resources System (CBRS) or as Otherwise Protected Areas (OPAs). In these areas, there is a prohibition for "any form of loan, grant, guarantee, insurance, payment, rebate, subsidy or any other form of direct or indirect Federal assistance," with specific and limited exceptions. Older buildings constructed before dates established by the Coastal Barrier Resources Act of 1982 and the Coastal Barrier Improvement Act of 1990 remain eligible for Federal flood insurance while new construction or substantially improved structures located within these designated areas are not eligible for flood insurance. If, at the time of a loss, it is determined that a policy has been inadvertently issued on new construction or substantial improvements located in a CBRS area, any claim will be denied, the policy canceled, and the premium refunded. The CBRS areas are located in nearly 400 communities on the Atlantic and Gulf coasts and along the Great Lakes shores, and are described on the communities' flood maps and cover an estimated 3 million acres. The flood manual contains a list of communities where coastal barriers or otherwise protected areas have been identified. Even if located within such areas, buildings may be eligible for coverage depending on which Act identified the community as having such areas. Rates A number of factors determine the premium rates for flood insurance coverage. Both regular and emergency program rates vary according to the following:      

Nature of the insured property (building or contents) Use of the property (single family, 2-4 family residential, other residential, or nonresidential) Amount of insurance purchased Number of floors in the building Whether the building has a basement Location of the insured contents

While the premium for many applications must be individually calculated, under the NFIP’s preferred risk program a table of pre-determined coverage and premium amounts are published. However, this program has restrictions according to the type and location of the property. Rates applicable to properties in regular program communities vary by flood hazard zones. Rates applicable to properties in emergency program communities do not. The flood zone applicable to the property to be insured is shown on the flood insurance rate map (FIRM) for the community in which the property is located. Flood maps can be obtained from the community's city hall or county government office or by calling NFIP at 1-800-358-9616. Alternatively, the

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applicable flood zone for a particular property can be obtained from the permits or building department of the community's city hall or county government office. Rates applicable to properties constructed after the date of issuance of the initial flood map of the community (the FIRM date) and located in the most hazardous zones (zones A1-A30, AE, AH, V1-V30, VE, and V) also vary depending on the elevation of the building's lowest floor above the area's "base flood elevation." Rating a flood policy under the emergency program is merely a matter of multiplying the separate amounts of insurance for a building and contents times the appropriate building and contents rates. Rating under the regular program is more complex. If a community is in the regular program, rates depend on the building’s qualification as "Pre-FIRM" or "Post-FIRM" construction. Separate tables in the flood insurance manual provide rates for each type of construction. An expense constant is added to the computed premium. The expense constant is different for residential condominium building association policies, and is dependent upon the number of units. A Federal policy fee is added; which is different for the RCBAP and is dependent upon the number of units. These fees are the same whether the policy is issued for a one-year term or a three-year term. A minimum premium applies per policy, including the expense constant and federal policy fee. Payment of the full policy premium must be made at the time of application or renewal, and this premium is fully earned. Refund of premium upon cancellation is permitted only under certain circumstances outlined in the policy forms. Policy terms available under the NFIP NFIP offers either a one-year or a three-year prepaid policy. Consumers save when buying a three-year policy because only one expense constant (administrative cost of processing a policy) is charged on each policy. The "grace period" provided under the NFIP’s flood policy While the NFIP policy is not a continuous policy, coverage remains in force for 30 days after the expiration of the policy. Claims for losses that occur in that period are honored provided that full renewal premium is received by the end of the 30-day period. A coverage grace period also remains in force for 30 days after written notice to the mortgagor of the expiration of a policy for any mortgagee named in the policy.

WRITE YOUR OWN (WYO) FEMA works closely with the insurance industry to facilitate the sale and servicing of flood insurance policies. Flood insurance under the NFIP is sold to owners of property located in NFIP communities through two mechanisms: 1) through state-licensed property and casualty insurance agents and brokers who deal directly with FEMA; and 2) through private insurance companies with a program created in 1983 known as “Write Your Own” (WYO).

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The Write Your Own (WYO) Program is a cooperative undertaking of the insurance industry and the FIMA. The WYO Program allows participating property and casualty insurance companies to write and service the Standard Flood Insurance Policy in their own names. The companies receive an expense allowance for policies written and claims processed while the Federal Government retains responsibility for underwriting and reinsuring losses. The WYO Program operates within the context of the NFIP, and is subject to all of its rules and regulations. The WYO Program was started to increase the NFIP policy count and geographic distribution of policies by taking advantage of the private insurance industry’s marketing channels and existing policy base to sell flood insurance. Eighty-six private insurance companies issue policies and adjust flood claims in their own names under the NFIP. The premium charged for NFIP flood coverage by a WYO Company is the same as that charged by the Federal Government through the direct program. Currently about 95% of the flood policies issued under the NFIP are written through the WYO Program. An insurance producer has the options of placing flood insurance directly with the NFIP Servicing Agent, or with one or more WYO companies. Each WYO company determines its own procedures for developing and compensating its agents. Regardless of whether NFIP or a Write-Your-Own insurer issues the policy, the coverage provided and the premium charged is identical. Write-Your-Own insurers use exactly the same language that is used in policies issued directly by NFIP. The goals of the WYO Program are:   

Increase the NFIP policy base and the geographic distribution of policies; Improve service to NFIP policyholders through the infusion of insurance industry knowledge; Provide the insurance industry with direct operating experience with flood insurance.

Jurisdiction over the WYO Program All aspects of the NFIP are subject to federal regulation. However, the licensed agents and brokers who sell flood policies as well as the state licensed insurers operating in the Write Your Own (WYO) program are held accountable by their state regulators to provide NFIP customers with the same level of ethics and service the states require of them in selling their other lines of insurance. Administration of the WYO Program, including the establishment of operating policies and rates, designation of eligible communities, development of reporting requirements and the implementation of the Financial Control Plan, is the responsibility of the Federal Insurance Administrator. In carrying out this Program to assist the WYO companies, the Federal Insurance Administrator uses the resources within the Federal Insurance Administration and the NFIP Servicing Agent.

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COMMUNITY ELIGIBILITY REQUIREMENTS

Whether the property is in the floodplain or not, almost everyone in the community qualifies for flood insurance coverage and nearly every community throughout the United States participates in the NFIP. For initial information pertaining to participation eligibility, hazard identification mapping, and floodplain management, a community should contact their own FEMA Regional Office. The FEMA regional and the individual state offices are listed in the appendix.

Floodplain Management The Act prohibits FEMA from providing flood insurance to property owners unless the community adopts and enforces floodplain management criteria established under the authority of the Act. These criteria are established in the NFIP regulations. The community must adopt a floodplain management ordinance that meets or exceeds the minimum NFIP criteria. Under the NFIP, “community” is defined as: “any State, or area or political subdivision thereof, or any Indian tribe or authorized tribal organization, or Alaska Native village or authorized native organization, which has authority to adopt and enforce floodplain management regulations for the areas within its jurisdiction.” "Floodplain management" refers to an overall community program of corrective and preventive measures for reducing flood damage. These measures take a variety of forms and generally include zoning, subdivision or building requirements, or special-purpose floodplain ordinances. Floodplains management is usually only required on new structures, or on existing structures that undergo "substantial improvement." "Substantial improvement" is defined as any repair, reconstruction, or improvement of a building, the cost of which equals or exceeds 50 percent of the market value of the building either before the improvement or repair is started or before the damage occurred if the building has been damaged and is being restored. It does not, however, include such actions taken for health, sanitary, or safety code specifications which are necessary solely to assure safe living; nor does it comply with existing state or local codes and ordinances for alterations to a structure listed on the National Register of Historic Places or a State Inventory of Historic Places.

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The Program has encouraged the establishment of floodplain management programs nationwide in the more than 20,000 participating communities and most States and territories. Community participation in the NFIP is voluntary. Minimum NFIP Floodplain Management Requirements Under the NFIP, the minimum floodplain management require that participating communities regulate all development in SFHAs. “Development” is defined as: “any man-made change to improved or unimproved real estate, including but not limited to buildings or other structures, mining, dredging, filling, grading, paving, excavation or drilling operations or storage of equipment or materials.” Before a property owner can undertake any development in the SFHA, a permit must be obtained from the community. The community is responsible for reviewing the proposed development to ensure that it complies with the community’s floodplain management ordinance. Communities are also required to review proposed development in SFHAs to ensure that all necessary permits have been received from those governmental agencies from which approval is required by Federal or State law. Under the NFIP, communities must review subdivision proposals and other proposed new development, including manufactured home parks or subdivisions to ensure that these development proposals are reasonably safe from flooding and that utilities and facilities servicing these subdivisions or other development are constructed to minimize or eliminate flood damage. In general, the NFIP minimum floodplain management regulations requirements for all new and substantially improved buildings in A Zones include: 

All new construction and substantial improvements of residential buildings must have the lowest floor (including basement) elevated to or above the BFE.



All new construction and substantial improvements of non-residential buildings must either have the lowest floor (including basement) elevated to or above the BFE or dryfloodproofed to the BFE. Dry floodproofing means that the building must be designed and constructed to be watertight, substantially impermeable to floodwaters.



Buildings can be elevated to or above the BFE using fill, or they can be elevated on extended foundation walls or other enclosure walls, on piles, or on columns.



Because extended foundation or other enclosure walls will be exposed to flood forces, they must be designed and constructed to withstand hydrostatic pressure otherwise the walls can fail and the building can be damaged. The NFIP regulations require that foundation and enclosure walls that are subject to the 100-year flood be constructed with flood-resistant materials and contain openings that will permit the automatic entry and exit of floodwaters. These openings allow floodwaters to reach equal levels on both sides of the walls and thereby lessen the potential for damage. Any enclosed area below the BFE can only be used for the parking of vehicles, building access, or storage.

In addition, to the above requirements, communities are required to select and adopt a regulatory floodway in riverine A Zones. The area chosen for the regulatory floodway must be designed to carry the waters of the 1-percent-annual-chance flood without increasing the water

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surface elevation of that flood more than one foot at any point. Once the floodway is designated, the community must prohibit development within that floodway which would cause any increase in flood heights. For all new and substantially improved buildings in V Zones: 

All new construction and substantial improvements of buildings must be elevated on piles and columns so that the bottom of the lowest horizontal structural member of the lowest floor is elevated to or above the BFE. No fill can be used for structural support.



All new construction and substantial improvements of buildings must be properly anchored to resist flotation, collapse, and lateral movement.



In V Zones, the velocity water and wave action associated with coastal flooding can exert strong hydrodynamic forces on any obstruction to the flow of water. Standard foundations such as solid masonry walls or wood-frame walls will obstruct flow and be at risk to damage from high-velocity flood forces. In addition, solid foundation walls can direct coastal floodwaters into the elevated portion of the building or into adjacent buildings. The result can be structural failure of the building. For these reasons, the area below the lowest floor of the elevated building in V Zones must either be free of obstruction, or any enclosure must be constructed with open wood lattice-panels or insect screening or, be constructed with non-supporting/non-load bearing breakaway walls which meet applicable NFIP criteria. Any enclosed area below the BFE can only be used for the parking of vehicles, building access, or storage.



In order to further protect structures from damaging wave impacts, structures must be located landward of the reach of mean high tide. Man-made alteration of sand dunes and mangrove stands, which would increase potential flood damage, are prohibited within V Zones.

The NFIP’s loss experience indicates that $1 billion in flood damages are avoided each year as a result of the NFIP floodplain management regulations for new construction. Structures built to NFIP criteria experience 80 percent less damage through reduced frequency and severity of losses. There is still significant flood damage potential for existing flood-prone buildings (Pre-FIRM structures). According to estimates developed in a 1997 study, there are 6.6 million structures located in SFHAs identified on the FIRMs, and just over half of these structures have their lowest floor below the BFE. The NFIP substantial improvement requirement and substantial damage requirement provides a mechanism to ensure that a significant increase in investment in existing Pre-FIRM buildings will receive needed protection from the flood risk. If a community determines that the cost of improvements to a home or business equals or exceeds 50% of the market value of the building, the building is considered a “substantial improvement.” If a community determines that the cost of restoring a home or business equals or exceeds 50 of the market value of the building before the damage from any origin occurred, the building is considered "substantially damaged". A substantially improved building or substantially damaged building must meet the minimum requirements of the NFIP.

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Local officials find it difficult to enforce the requirement on property owners who do not have the financial resources to both repair and bring the buildings into compliance. In the last ten years, financial resources to mitigate substantially damaged buildings have improved. Activities that support reducing future damages to existing flood-prone buildings that have been substantially damaged have improved the level of compliance with the substantial damage requirement by providing property owners with the financial help they need to meet Program requirements. A number of the existing Pre-FIRM structures experience repeat flood damages and represent a significant problem for the Program. NFIP Repetitive Loss Properties have been generally defined as those that have had at least two losses of $1,000 or more within any 10-year period. As of September 30, 2004, a total of 112,540 properties nationwide had sustained repetitive losses, but only 50,644 of these properties had insurance. Since 1978, RLPs have cost the NFIP about $2.7 billion. These buildings represent a serious drain on the National Flood Insurance Fund and have accounted for nearly one-third of all paid losses. The majority of existing flood-prone structures are residences “grandfathered” into the NFIP when the program was created. FEMA estimates that 90% of RLPs were built prior to December 31, 1974, before the preparation of flood insurance rate maps (FIRM) and building codes that adequately reflected the probability of flooding in special flood hazard areas (SFHA). FEMA has developed a Repetitive Loss Strategy to identify properties throughout the country that are most at risk for repeat flooding, and to reduce their exposure through targeted buyouts, relocation, and elevation. These represent around 11,700 buildings. Ordinance Adoption Once FEMA provides a community with the flood hazard information upon which floodplain management regulations are based, the community is required to adopt a floodplain management ordinance that meets or exceeds the minimum NFIP requirements. FEMA can suspend communities from the Program for failure to adopt once the community is notified of being floodprone or for failure to maintain a floodplain management ordinance that meets or exceeds the minimum requirements of the NFIP. The procedures for suspending a community from the Program for failure to adopt or maintain a floodplain management ordinance that meets or exceeds the minimum requirements of the NFIP are established in the NFIP regulations. Since 1968, over 2,300 communities have been suspended for failure to adopt. Most of these communities subsequently adopted a compliant ordinance and were eventually reinstated into the Program. There are currently 261 communities suspended from the Program for failure to adopt floodplain management regulations that meet or exceed the minimum NFIP requirements. These are generally small communities with little or no floodplain development. In these suspended communities, flood insurance is not available to property owners. In addition, these communities are subject to limitations on Federal financial assistance which prohibits Federal officers or agencies from approving any form of loan, grant, guaranty, insurance, payment, rebate, subsidy, disaster assistance loan or grant, for acquisition or construction purposes within SFHAs. This would prohibit mortgage loans guaranteed by the Department of Veterans Affairs, insured by the Federal Housing Administration, or secured by the Rural Economic and Community Development Services, or disaster assistance under the Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988 in connection with a flood. The Act requires federally regulated lending institutions to notify the purchaser or lessee of improved real property situated in a SFHA whether Federal disaster assistance will be available

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when such property is being used to secure a loan that is being made, increased, extended or renewed. Monitoring Community Compliance FEMA monitors communities to ensure that they have adopted an ordinance that meets or exceeds the minimum NFIP floodplain management criteria and to ensure that they are effectively enforcing their ordinance. If communities do not adequately enforce their floodplain management regulations, they can be placed on probation and potentially suspended from the Program following probation. FEMA staff can also monitor enforcement by communities through applications for flood insurance policies, which often identify buildings that are potentially in violation of the NFIP minimum floodplain management requirements. In addition, FEMA can monitor enforcement by communities through the LOMR (Letter of Map Revision) process. Actions Against Communities For Failure to Enforce Most deficiencies in a community’s floodplain management program or violations of local ordinances are generally due to lack of understanding of the NFIP requirements, lack of technical skills, failure to understand the rationales behind the NFIP requirements, or lack of an appreciation of the insurance implications and other consequences of a decision. Most problems that are identified can be solved through community assistance efforts. When this does not happen, FEMA has procedures in place to conduct an enforcement action in order to obtain compliance by the community. If a community does not adequately enforce its floodplain management regulations, it can be placed on probation or suspended from the Program. The community must be given reasonable time to demonstrate buildings are compliant with the ordinance or it must correct any program deficiencies and remedy any violations identified during the visit. As long as a community is making adequate progress toward correcting program deficiencies and remedying violations, FEMA will not initiate formal probation. FEMA, will, however initiate probation in a community that does not make sufficient progress in resolving its floodplain management issues or chooses not to address them. FEMA notifies the community that it will be placed on probation upon 120 days if the community does not demonstrate it has corrected its program deficiencies and has remedied violations to the maximum extent possible. While probation has no effect on the availability of flood insurance, an additional charge of $50 is added to the premium for each policy for a period of at least one year. During the 120-day period, the community has the opportunity to avoid probation by demonstrating compliance with the NFIP requirements. When a community is suspended from the NFIP, flood insurance is no longer available. Also, the community is subject to limitations on Federal financial assistance. As of July 23, 2002, there were 7 communities on probation nationwide. Since 1986, nine communities have been suspended from the Program for failure to enforce the community’s floodplain management ordinance. Most communities comply with NFIP requirements prior to FEMA’s issuing a probation notice. One of the primary reasons communities comply is to avoid disruptions in the real estate market that would result with the potential loss of flood insurance.

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Actions Against Individual Properties For Failure to Comply There are certain options that can be applied to individual structures that are determined to be in violation of the community’s floodplain management ordinance. If an insured structure is identified as a violation of the community’s floodplain management ordinance, FEMA can have the insurance company that insures the building review the information and possibly rerate the structure to reflect the increased risk to the structure. This can result in significantly higher flood insurance rates on the structure, which may cause the property owner to bring the building into compliance. In addition, the 1968 Act provides for the denial of flood insurance coverage for any property which has been declared to be in violation of State or community floodplain management regulations. Currently, there are over 500 structures have been denied flood insurance coverage. Extensive publications have been produced on the NFIP, including mitigation measures that can be undertaken to minimize or eliminate future flood damages. A complete list of publications can be found on FEMA’s website at www.FEMA.gov.

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FLOOD MAPS

Flood Hazard Identification and Risk Assessment The Director of FEMA is required by statute to identify and map the Nation’s flood-prone areas and to establish flood-risk zones in such areas. Flood hazard maps have been issued for over 20,000 communities at a cost of more than $2.8 billion dollars. To date, approximately 100,000 flood map panels have been produced depicting over 150,000 square miles of floodplain areas. The “100-year” Standard The 1-percent-annual-chance flood (or 100-year flood) represents a magnitude and frequency that has a statistical probability of being equaled or exceeded in any given year, and a 26 percent (or 1 in 4) chance of occurring over the life of a 30-year mortgage. The 1-percent-annual-chance flood is a regulatory standard used by Federal agencies, and most States, to administer floodplain management programs. The 1-percent-annual-chance flood standard has been used since the inception of the NFIP and is used for floodplain management purposes in all of the 19,200 participating communities that have been issued flood hazard maps. Identifying and Mapping Flood-Prone Areas To meet the objective that studies be conducted to accurately assess the flood risk within each flood-prone community, the 1968 Act called for: 1) the identification and publication of information within five years for all floodplain areas that have special flood hazards; and 2) the establishment of flood-risk zones in all such areas to be completed over a 15-year period following passage of the Act. Within the first year of NFIP’s operation, it became evident that the time required to complete the detailed flood insurance studies would delay implementation of the Program in many floodprone communities. As a result, the Housing and Urban Development Act of 1969 expanded

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participation by authorizing an Emergency Program under which insurance coverage could be provided at non-actuarial, federally subsidized rates in limited amounts during the period prior to completion of a community’s Flood Insurance Study (FIS). Flood Hazard Boundary Maps, which defined the boundaries of the community’s SFHAs, were prepared to assist communities in managing floodplain development, and to assist insurance agents and property owners in identifying those areas where the purchase of flood insurance was advisable. In order to enter the Regular Program with higher amounts of insurance, the community is required to adopt more comprehensive floodplain management requirements. Flood Mapping Process Over 10,000 communities have been provided detailed FISs and have been issued FIRMs that include BFEs for Zones AE, A1-30, AH, AO, AR/AE, AR/A1-30, AR/AO, AR/AH, VE, and V1-30. During the appeal period, any owner or lessee of real property within the community where the proposed elevation determination has been made may file a written appeal. The appeal must be based on a demonstration that the elevations proposed by FEMA are scientifically and/or technically incorrect. Changes to the Flood Maps More specific information relating to the LOMA process may be obtained by contacting FEMA's Baltimore Office: Federal Emergency Management Agency Flood Map Distribution Center 6930 (A-F) San Tomas Road Baltimore, MD 21227-6227 FEMA has developed a process, referred to as a Letter of Map Amendment (LOMA), to correct inadvertent inclusion of a property in a SFHA erroneously. A LOMA results from an administrative procedure involving the review of technical data submitted by the owner or lessee of property who believes the property has incorrectly been included in a designated SFHA. A LOMA amends the currently effective FEMA map and establishes that a specific property is not located in an SFHA thereby removing the Mandatory Flood Insurance Purchase Requirement. FEMA has similarly established administrative procedures for changing effective maps based on new or revised scientific or technical data that reflect other changes to the floodplain including projects such as fill and flood control measures. The map actions are referred to as Letter of Map Revision based on Fill (LOMR-F) and Letter of Map Revision (LOMR) respectively. FEMA publishes maps indicating the flood hazard areas and the degrees of risk. Notices of the proposed base flood elevations are published twice in a local newspaper during the ten-day review period. In addition, the community officials are notified and encouraged to locally disseminate information on the proposed base flood elevations. Public meetings may be conducted at which interested parties may present relevant facts to help ensure accurate results. FEMA also works closely with each community's officials prior to

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and during the study to describe the technical procedures and to obtain community input before publication of the Flood Insurance Study (FIS) Report and Flood Insurance Rate Map. Before the Flood Insurance Study is initiated, community officials, FEMA representatives, and the study contractor meet to discuss the areas that need to be studied. This is called the time and cost estimate meeting. Flood hazard areas are determined on the basis of records of river flow and rain data, information obtained through consultation with the community, and hydrologic and hydraulic analyses. The detailed Flood Insurance Study (FIS) covers those areas that are subject to flooding from rivers and streams, along coastal areas and lakeshores, or in shallow flooding areas, but does not include areas of less than one square mile. One aspect of the study is the potential of river flooding. River flooding is based upon the quantity of water that must pass a given point and the configuration of the channel and adjacent overbank area that must carry that water. The probability of flooding can be assessed by analysis of a river’s records on flood-flow frequency. The complicated aspects of coastal flood hazards require special procedures to perform the FIS for communities that lie in coastal floodplains. Typically a coastal flooding study involves determining the area, extent, and height of storm surges, such as surges induced by hurricanes, northeasters, or chubascos. In general, two study methods will be used: (1) statistical analysis of gauge data; and (2) numerical or synthetic modeling of hurricane surges. A Flood Hazard Boundary Map (FHBM) is based on best available data and identifies a community’s general flood hazard area. It is used in the Emergency Program phase of the NFIP for floodplain management and insurance purposes. A Flood Insurance Rate Map (FIRM) is issued following the Flood Insurance Study and reflects the flood boundaries, elevations, and insurance risk zones defined by a detailed engineering study. After the effective date of the FIRM, the community's floodplain ordinances must comply with Regular Program requirements based on the delineation of flood hazards; actuarial rates based on the risk zone designations are applied to new and substantially improved structures. Once a Flood Hazard Boundary Map (FHBM) and/or a Flood Insurance Rate Map (FIRM) has been finalized and becomes effective, property owners can obtain a free copy by calling the NFIP servicing contractor toll-free at 1-800-333-1363.

FEMA Tutorial -- How To Read A FIRM (Flood Map): http://www.fema.gov/mit/tsd/OT_Frfpi.htm

This site is helpful, especially for agents who are new to writing flood insurance.

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FLOOD HAZARD ZONES The FIRM is used in Regular Program communities by lenders to determine the flood insurance requirements and by insurance agents to determine flood insurance premiums for specific properties. The map includes areas within the 100-year flood boundary, which are termed special flood hazard areas (SFHAs). A "100-year flood" does not refer to a flood that occurs once every 100 years, but refers to a flood level with a 1 percent or greater chance of being equaled or exceeded in any given year. The SFHAs may be further subdivided into insurance risk rate zones. Areas between the 100-year and 500-year flood boundaries are termed moderate flood hazard areas. The remaining areas are above the 500-year flood level and are termed minimum flood hazard areas. Historically, about one-third of claims paid by the NFIP are for flood damage in areas identified as having only moderate and minimal risk of flood. Flooding in these areas often is the result of inadequate local drainage systems. These flood hazard areas are subdivided into flood hazard zones (insurance risk rate zones) according to the following criteria: 

Zone V: SFHAs along coasts subject to inundation by the 100-year flood with additional hazards associated with storm waves. Because detailed hydraulic analyses have not been performed, no base flood elevation or depths are shown.



Zones VE and V1-30: SFHAs along coasts subject to inundation by the 100- year flood with additional hazards due to velocity (wave action). Base flood elevations derived from detailed hydraulic analyses are shown within these zones. (Zone VE is used on new and revised maps in place of Zones V1-30)



Zone A: SFHAs subject to inundation by the 100-year flood. Because detailed hydraulic analyses have not been performed, no base flood elevation or depths are shown.



Zones AE and A1-30: SFHAs subject to inundation by the 100-year flood determined in a FIS by detailed methods. Base flood elevations are shown. (Zone AE is used on new and revised maps in place of Zones A1-30)



Zone AH: SFHAs subject to inundation by 100-year shallow flooding (usually areas of ponding) where average depths are between one and three feet. Base flood elevations derived from detailed hydraulic analyses are shown.



Zone AO: SFHAs subject to inundation by 100-year shallow flooding (usually sheet flow on sloping terrain) where average depths are between one and three feet. Average flood depths derived from detailed hydraulic analyses are shown.



Zone A99: SFHAs subject to inundation by the 100-year flood that will be protected by a federal flood protection system when construction has reached specified statutory progress toward completion. No base flood elevations or depths are shown.

The above zones require mandatory flood insurance for buildings and structures in these areas.

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

Zones B, C and X: These areas have been identified in the community FIS as areas of moderate or minimal hazard from the principal source of flood in the area. However, buildings in these zones could be flooded by severe, concentrated rainfall coupled with inadequate local drainage systems. Flood insurance is available in participating communities but is not required by regulation in these areas. (Zone X is used on new and revised maps in place of Zones B and C)



Zone D: Unstudied areas where flood hazards are undetermined but flooding is possible. No mandatory flood insurance purchase requirements apply, but coverage is available in participating communities.

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NFIP's Flood Insurance Manual

The application and rating procedures for NFIP flood insurance are sometimes confusing. An NFIP manual that outlines the rules, rates, and procedures and provides specimen copies of the forms is absolutely essential for agents and brokers that place flood insurance. Order forms for NFIP's Flood Insurance Manual are available from the NFIP regional offices. The Flood Insurance Manual may also be available via the Internet. The address is http://www.fema.gov/nfip/. Ratemaking The 1968 Act separated the flood insurance ratemaking process into two distinct categories: subsidized rates and actuarial rates. Congress authorized the NFIP to offer policies at subsidized rates (at less than full actuarial risk rates) to existing buildings constructed on or before December 31, 1974 or before the effective date of the initial FIRM, whichever is later. Congress concluded that these buildings were built without the occupants’ full knowledge and understanding of the flood risk, and to rate them using the actuarial rates might make the flood insurance prohibitively expensive. FEMA estimates that risks in this class are paying on average only 35 to 40 percent of what the full risk premium should be to fund the long-term expectation of the flood losses to the building. Even though premiums for policies on existing buildings are subsidized, floodplain occupants pay for at least part of the cost of the insurance and no longer need most disaster assistance. In exchange for this subsidized insurance, participating communities must require new construction and substantially improved structures to meet the minimum requirements of the NFIP. The 1968 Act requires that FEMA charge full actuarial rates reflecting the complete flood risk to buildings constructed or substantially improved on or after the effective date of the initial FIRM for the community or after December 31, 1974, whichever is later. While FEMA prints rate tables showing all possible flood risk zones and uses them for the entire country, FEMA does not show the same zones on every FIRM. Older structures built before establishment of NFIP minimum floodplain management requirements can generally expect to suffer as much as 5 times the flood damage that compliant new structures experience.

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Mandatory Flood Insurance Purchase Requirement From 1968 until 1973, the purchase of flood insurance was voluntary. Property owners could make their own decision whether to purchase flood insurance. Unfortunately, the response nationwide to purchasing flood insurance voluntarily was dismal. Just over 95,000 policies were in force in 1972, and very few victims hit with flooding that year had flood insurance. After major flood disasters, it became evident that relatively few individuals in eligible communities who sustained flood damage had purchased flood insurance. The 1973 Act mandated flood insurance coverage for many properties. Regulated lending institutions could not make, increase, extend, or renew any loan secured by improved real estate located in a SFHA in a participating NFIP community unless the secured building and any personal property securing the loan were covered for the life of the loan by flood insurance. Federal officers or agencies could not approve any form of loan, grant, guaranty, insurance, payment, rebate, subsidy, disaster assistance loan or grant, for acquisition or construction purposes within a SFHA in a participating community unless the building and any personal property to which such financial assistance relates were covered during the life of the property. The Housing and Community Development Act of 1977 required lending institutions who make conventional loans in a SFHA of a non-participating community to notify the purchaser or lessee whether or not the Federal disaster assistance for flood damage will be available. The 1973 Act prohibits Federal officers or agencies from approving any form of loan, grant, guaranty, insurance, payment, rebate, subsidy, disaster assistance loan or grant, for acquisition or construction purposes within SFHAs of non-participating communities. This would prohibit mortgage loans guaranteed by the Department of Veterans Affairs, insured by the Federal Housing Administration, or secured by the Rural Economic and Community Development Services, and the Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988 in connection with a flood. Federal lending and insuring institutions affected by the requirements of the NFIP        

Federal Deposit Insurance Corporation (FDIC) Federal Home Loan Bank Board (FHLBB) Federal Savings and Loan Insurance Corporation (FSLIC) National Credit Union Administration (NCUA) Federal Reserve Small Business Administration (SBA) Federal Housing Administration (FHA) Veterans Administration (VA)

The 1994 Act requires the force placement of flood insurance if a lender or servicer determines that the building securing the loan is not adequately insured. The Act grants statutory authority to a lender or servicer to purchase flood insurance for the building and charge a premium to the borrower if the building is in an SFHA. Congress designated a specific range of regulatory civil monetary penalties that may be imposed administratively.

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It is the responsibility of the lender to:     

Determine whether the building offered as security for a loan is, or will be located in an SFHA; Document the determination using the Standard Flood Hazard Determination Form; Require flood insurance to the appropriate amount when necessary; Ensure that flood insurance is maintained during the life of the loan; and Ensure that flood insurance is purchased and maintained if the lender becomes aware that the building involved subsequently is located in an area that has been remapped as a SFHA.

It is a prerequisite that a designated loan have flood insurance as a condition of closing. If a borrower will not voluntarily obtain coverage and a lender is unable to force place coverage, the lender must deny the loan or exercise the sanction provisions of the loan document if the loan already has been made. Closing a designated loan without flood insurance coverage in place constitutes a violation of the regulation implementing the Mandatory Purchase Requirement. Lenders on their own initiative may require the purchase of flood insurance even if a structure is located outside the SFHA. Lenders have this prerogative to require flood insurance to protect their investments. MORTGAGE PORTFOLIO PROTECTION PROGRAM The Mortgage Portfolio Protection Program helps mortgage lenders review their loan portfolios and identify properties in special flood hazard areas (SFHA). The homeowner is notified and then required to buy a flood insurance policy. If the owner buys insurance, the lender is permitted to place flood insurance on the property. Force placing flood coverage is to be done as a last resort. A mortgagor must disclose the need for insurance to the borrower, the Flood Disaster Act of ‘73, information on the necessary amount of insurance and the property’s flood zone.

Other NFIP Activities COMMUNITY RATING SYSTEM The NFIP’s Community Rating System (CRS) provides discounts on flood insurance premiums in those communities that establish floodplain management programs that go beyond NFIP minimum requirements. Under the CRS, communities receive credit for more restrictive regulations, acquisition, relocation, or floodproofing of flood-prone buildings, preservation of open space, and other measures that reduce flood damages or protect the natural resources and functions of floodplains. Under the CRS program, qualifying projects can include future flood reduction measures for existing structures, construction of new buildings, and campaigns to increase community awareness about flood insurance. Under the CRS, flood insurance premium rates are adjusted to reflect the reduced flood risk resulting from community activities that meet the three goals of the CRS:

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(1) Reduce flood losses, i.e.,     

Protect public health and safety, Reduce damage to property, Prevent increases in flood damage from new construction, Reduce the risk of erosion damage, and Protect natural and beneficial floodplain functions;

(2) Facilitate accurate insurance rating; and (3) Promote the awareness of flood insurance. There are now over 900 communities receiving flood insurance premium discounts based on their implementation of local mitigation, outreach, and educational activities that go well beyond minimum NFIP requirements. These communities account for over 66% of the NFIP’s policy base. Communities receiving premium discounts through the CRS cover a full range of sizes from small to large, and a broad mixture of flood risks, including coastal and riverine. Flood Mitigation Assistance Program The Flood Mitigation Assistance (FMA) program provides funding to assist States and communities to accomplish flood mitigation planning and implement measures to reduce future flood damages to NFIP insurable structures. These funds can be used before disaster strikes. Examples of eligible types of projects include:      

Elevation of NFIP-insured residential structures and elevation or dry-floodproofing of nonresidential structures in accordance with 44 CFR §60.3. Acquisition of NFIP-insured structures and underlying real property. Relocation of NFIP-insured structures from acquired or restricted real property to sites not prone to flood hazards. Demolition of NFIP-insured structures on acquired or restricted real property. Beach nourishment activities that focus on facilitating natural dune replenishment through the planting of native dune vegetation and/or the installation of sand fencing. Placement of sand on beach is not eligible. Minor physical flood control projects that do not duplicate the flood-prevention activities of other Federal agencies that address localized flood problem areas such as stabilization of stream banks, modification of existing culverts, creation of small stormwater retention basins. Major structural flood control structures, such as levees, dams, and seawalls are not eligible.

To be eligible for funding, a project must be:     

Cost-effective; Conform with applicable Federal and State regulations and executive orders; Be technically feasible; Conform with the Flood Mitigation Plan; and Be located physically in a participating NFIP community that is not on probation.

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The NFIP’s Repetitive Loss Strategy is to identify properties throughout the country that are most at risk for repeat flooding, and to reduce their exposure through targeted buyouts, relocation, and elevation. Approximately 50,644 repetitive loss properties are currently insured. These buildings are projected to cost the program over $200 million per year in claims. New repetitive loss properties continue to emerge each year. FEMA has identified around 11,700 target buildings that have the greatest risk. Most of these target buildings are single-family residences. The limited FMA program funds are a key resource toward achieving this goal. Since 1996, FMA program funds have been used to acquire 484 flood-prone structures, relocate 16 flood-prone structures, elevate 491 flood-prone structures, and dry-floodproofed 8 floodprone non-residential structures. To date, FEMA has allocated through FMA $97.6 million for projects; $9 million for plans; and $10.8 million for technical assistance.

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OVERVIEW OF THE NATIONAL FLOOD INSURANCE PROGRAM Flood Insurance Policy The Standard Flood Insurance Policy (SFIP) specifies the terms and conditions of the agreement of insurance between FEMA or a WYO company as the Insurer and the Insureds. Insureds in NFIP communities include owners, renters, builders of buildings that are in the course of construction, condominium associations, and owners of residential condominium units. “Flood” is defined in the SFIP, in part, as: “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 your property) from overflow of inland or tidal waters, from unusual and rapid accumulation or runoff of surface waters from any source, or from mudflow.” TYPES OF POLICIES AVAILABLE The Standard Flood Insurance Policy, Dwelling Form, is designed to cover 1 to 4 family residences, as well as their contents from flood damage. The policy will also protect tenants’ personal property and residential condominium unit-owners. The Dwelling Policy can be used to insure a unit-owner’s individual interest in the structure and in the building’s common elements. The policy must be written in the name of the insured and the association, as their interests may appear. The Residential Condominium Building Association Policy is available to insure the condominium association’s residential building. A Flood Insurance Policy for General Property is available for structures of other kinds and their contents, including commercial and manufacturing properties. The NFIP Program also has a Preferred Risk Policy, which is available to 1-4 family residential buildings that are located in flood zones B, C, or X. The Preferred Risk Policy is not available for condominiums. The SFIP is issued on one of three available policy forms, depending on the occupancy of the building, to provide coverage for the peril of flood:   

The Dwelling Form is used to insure 1-4 family buildings and individual residential condominium units. The General Property Form covers residential buildings of more than 4 families, as well as non-residential risks. The Residential Condominium Building Association Policy (RCBAP) Form insures associations under the condominium form of ownership.

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LOSS SETTLEMENT BASIS While most flood losses are settled on an actual cash value basis, replacement cost coverage is a settlement option that is available to a single family principal residence, but not to either multifamily dwellings or "general property.'' COVERED PERILS This insurance covers direct physical loss to insured property by flood. It also covers the reasonable expenses for sandbags, construction materials, and even the human labor in handling the materials that are used to minimize flood damage. The reimbursement for labor uses the prevailing federal minimum wage. The maximum amount payable is the minimum building deductible amount applicable. The insured property must actually be in imminent danger of sustaining flood damage. EXCLUSIONS The policy excludes losses caused by: 



      

Theft, loss of profits, fire, windstorm, wind, explosion, earthquake, land sinkage, land subsidence, landslide, land movement resulting from subsurface water accumulation, gradual erosion, or any other earth movement, except such mudslides or erosion as are covered under the peril of flood, Rain, snow, sleet, hail or water spray; or by freezing, thawing, the pressure or weight of ice or water, sewer backup or seepage of water unless the insured property has first been damaged by flood, Water, moisture or mudslide damage created by a condition confined to the insured building or that is within the insured's control, Which is already in progress as of 12:01 A.M. of the first day of the policy term, A flood which is confined to the insured premises unless the flood is displaced over two acres, Modification to the insured property which materially increases the risk of flooding, Intentional actions by the insured or a member of the household, Power, heating or cooling failure (unless the system was directly damaged by a flood), Flooding of property leased from the federal government when the flooding is caused by the Federal Government.

DWELLING COVERAGE The insurance applies to the described residential building and includes building additions, building equipment, fixtures, and outdoor equipment while within an enclosed structure on the premises; also, construction materials and supplies. Up to 10% of the dwelling insurance limit may be applied to detached garages and carports at the described premises, unless the structures are rented or used for business purposes.

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CONTENTS COVERAGE Contents coverage applies to all household and personal property which belongs to an insured and while it is contained within a building at the property address. The insured may elect to have the policy coverage extend to the property of a servant or guest of the insured. Up to 10% of the contents insurance limit may be applied to cover improvements and betterments. A condo unit-owner may apply up to 10% of the contents insurance limit to cover the interior walls, floors, and ceilings if they are not covered by a condo association policy. A maximum of $2,500 (per occurrence) is available to cover fine arts, jewelry and fur items. Only $2,500 is made available for all losses to property in these classes. Other Coverages In addition to providing coverage for Building and Personal Property, the SFIP also provides Other Coverage for Debris Removal, Loss Avoidance Measures, and, under the Dwelling Form, coverage for Condominium Loss Assessments if the policy insures a condominium unit. The SFIP includes coverage for Pollution Damage if the damage results from a flood. All of these coverages are provided within the purchased policy limits. All three policy forms provide Increased Cost of Compliance (ICC) coverage. ICC coverage provides for the payment of a claim to help pay for the increased costs to comply with State or community floodplain management laws or ordinances after a flood in which a building has been declared substantially or repetitively damaged. When an insured building is damaged by a flood and the community declares the building to be substantially or repetitively damaged, thus triggering the requirement to comply with a community floodplain management ordinance, ICC will help pay for the cost to elevate, relocate, demolish, or floodproof (non-residential buildings only) up to a maximum of $30,000. This coverage is in addition to the building coverage for the repair of actual physical damages from flood under the SFIP, but the total paid cannot exceed the maximum limit set by Congress for that type of building. The maximum limit of $30,000 will help property owners insured under the NFIP to pay for the costs of actions to protect homes and businesses from flood losses. In addition, an ICC claim payment can be used to complement and supplement funds under other mitigation programs such as the Flood Mitigation Assistance program and FEMA’s Hazard Mitigation Grant Program to assist communities in implementing measures to reduce or eliminate the long-term risk of flood damage to buildings insured under the NFIP. As of November 30, 2001, approximately 689 claims have been paid under the ICC coverage to elevate, relocate, demolish, or floodproof structures for just over $7.5 million. DEBRIS REMOVAL COVERAGE The policy covers expenses for removing debris of or on the covered building or contents covered. This coverage is provided as part of the policy’s insurance limits and is not additional coverage.

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PROPERTY NOT COVERED A Dwelling Form Standard Flood Insurance Policy is designed to provide basic protection to contents. Therefore, similar to other types of policies that protect buildings and property, it has a laundry list of items that do not qualify for coverage. Specifically, the Standard Flood Insurance Policy does not cover:    

  

  



   

Currency, bills, accounts or similar valuable papers or records, Contents used with or for any business purpose, Newly constructed or substantially improved buildings located seaward of mean high tide, or entirely in, on, or over water, Fences, retaining walls, seawalls, swimming pools, bulkheads, wharves, piers, bridges, docks; other open structures located on or over water, including boat houses or other similarly used structures, Personal property in the open, Land values, lawn, trees, shrubs, plants, growing crops, or livestock, Underground structures and equipment including wells, septic tanks/systems and portions of walks, driveways and other surfaces that are outside the foundation walls of the building, Animals, birds, fish; aircraft, any self-propelled vehicle or machine and motor vehicles (except those that service the premises, including their parts), Trailers on wheels, recreational vehicles and watercraft including their furnishings and equipment; and business property, Enclosures, contents, machinery, building components, equipment and fixtures located below the lowest elevated floor of an elevated building; however there is coverage for sump pumps, well-water tanks, oil tanks, furnaces, hot water heaters, clothes washers and dryers, food freezers, air conditioners, heat pumps and electrical junction and circuit breaker boxes that are located in basements of buildings built or altered before October 1, 1983, Buildings and their contents, where more than 49 percent of the actual cash value of such buildings is below ground (with exceptions for earth being used as insulation that is in compliance with FEMA rules), Mobile home located within a SFHA that is not anchored according to FEMA requirements, Containers such as gas and liquid tanks, Mobile homes (or contents) located within a coastal high hazard area (Zones V1-V30) which are not in a mobile home park or subdivision established before June 1, 1982, or Buildings which were built or altered after October 1, 1983 and are located in an undeveloped coastal barrier that was established by the Coastal Barrier Resources Act.

DEDUCTIBLES A loss deductible applies separately to each building loss and personal property loss. The policy deductible is shown on the Declarations Page. However, when a building under construction, alteration, or repair does not have at least two rigid exterior walls and a fully secured roof at the time of loss, the deductible amount will be two times the deductible that would otherwise apply to a completed building. The deductible does not apply to loss avoidance measures, condominium loss assessments, or the increased cost of compliance. Under the NFIP Emergency Program, a higher deductible may apply to each building loss and personal property loss.

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LIBERALIZATION CLAUSE If there is any change to the National Flood Insurance Act that results in a non-premium bearing change that broadens or extends coverage under the flood policy; that benefit is granted to a covered building that is being altered, built or repaired during the policy period or up to 45 days before the inception date of the current policy period. MORTGAGEE INTEREST If the flood policy is canceled for non-payment of premium (the only grounds for company cancellation), coverage will stay in force for 30 days after the cancel date in order to protect the insurable interest of the mortgagee (or trustee). The mortgagee (or trustee) also has the right to submit a proof of loss when it is notified that the insured has failed to do so. The other applicable policy obligations and provisions then apply to the mortgagee. OTHER INSURANCE The company is not liable for a greater proportion of any loss, less the amount of deductible, from the peril of flood other than the amount of insurance the policy bears to the whole amount of (primary) flood insurance covering the property regardless whether the insurance is collectible. If the total amount of primary flood insurance on a covered property exceeds what is allowed under the National Flood Insurance Act, the company’s proportion of coverage is based on the total amount of insurance allowed. In certain instances, the insured may request a partial refund of coverage. IN EVENT OF LOSS Payment of any loss under a Flood Insurance policy does not reduce the insurance applicable to another separate loss during the policy term. Losses from a continuous or protracted occurrence are considered to be a single occurrence. Loss of an article which is part of a pair or set will be settled in proportion of the total value of the pair or set, giving consideration to the importance of the article, but will not automatically be considered as a total loss of the pair or set. The insured must give written notice, as soon as practicable, to the company, of any loss; protect the property from further damage; separate the damaged and undamaged property and put it in the best possible order. Within 60 days after the loss, the insured must send the company a proof of loss. The company has the option to take all or any part of the property at the agreed or appraised value, and to repair, rebuild or replace the property destroyed or damaged with other of like kind and quality. The company must tell the insured what it plans to do within 30 days after receiving the proof of loss. The amount of loss for which the company is liable is payable 60 days the company has both received a proof of loss and has determined the amount to be paid.

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An insured under a flood policy can’t file a legal action against the company while complying with every applicable policy provision. If a suit is filed, it has to be done within 12 months of the day after being notified that all or part of a claim has been rejected. CANCELLATION PROVISIONS A Flood Insurance policy may be canceled at any time at the request of the insured. However, the premium paid for the remaining policy term is fully earned if the insured retains an interest in the covered property. Considering the premium to be fully earned removes an incentive for persons to just carry coverage during parts of the year that are storm or flood prone. The NFIP provides a form for companies to use, which lists valid, company-requested cancellations.

The Preferred Risk Policy The preferred risk policy is a package policy offering coverage for a combination of both building and contents at a fixed premium. Rates for the PRP are substantially lower than those in the standard program. The Federal policy fee and increased cost of compliance are included in the premium. However, increased cost of compliance coverage is not available for townhouse or row house condominium units under this policy. Eligibility for the Preferred Risk Policy: This inexpensive policy is available for homeowners with a 1- to 4-family residential building located in a low- to moderate-risk area, which is indicated by a B, C, or X zone on the current Flood Insurance Rate Map. The PRP is not available in the Emergency Program or in Special Flood Hazard Areas. Condominium units, except for townhouse/rowhouse type buildings, are not eligible under the PRP. Should any of the following conditions exist, based on the building's flood loss history regardless of ownership, a Preferred Risk Policy cannot be written:     

2 loss payments, each more than $1,000 3 or more loss payments, regardless of amount 2 Federal Disaster Relief payments, each more than $1,000 3 Federal Disaster Relief payments, regardless of amount 1 flood insurance claim payment and 1 flood disaster relief payment (including loans and grants), each more than $1,000

If, during a policy term, a risk fails to meet the eligibility requirements, it will be ineligible for the PRP and must be non-renewed or rewritten in the standard flood program. Coverage: The Preferred Risk Policy provides the same coverage as the standard flood insurance policy:   

The building's structural elements can be insured up to $250,000 The contents of the home can be insured up to $100,000 Replacement cost coverage is also available for a single-family, primary residence.

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Rates The Preferred Risk Policy is available for as little as $112 a year for $20,000 of building coverage and $8,000 of contents coverage for a building without a basement. The charts below provide details about premiums for different amounts of coverage both for buildings without basements and those with basements. Buildings Without Basement $20,000 $30,000 $50,000 $75,000 $100,000 $125,000 $150,000 $200,000 $250,000 Buildings With Basement $20,000 $30,000 $50,000 $75,000 $100,000 $125,000 $150,000 $200,000 $250,000

Contents

Premium

$8,000 $12,000 $20,000 $30,000 $40,000 $50,000 $60,000 $80,000 $100,000 Contents

$112 $138 $180 $207 $233 $249 $264 $296 $317 Premium

$8,000 $12,000 $20,000 $30,000 $40,000 $50,000 $60,000 $80,000 $100,000

$137 $163 $205 $232 $263 $279 $294 $331 $352

Building deductible: $500 Contents deductible: $500 Deductibles applied separately Premium includes Federal Policy Fee and ICC Premium Rates effective 5/1/04. These rates are subject to change; please consult the flood insurance manual for updates. For more information call the National Flood Insurance Program at 1-888-FLOOD29, TDD# 1800-427-5593 about the Preferred Risk Policy.

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National Flood Insurance Program Dwelling Policy

Three standard policies can be used for writing flood insurance under the National Flood Insurance Program (NFIP). These are the dwelling, general property, and residential condominium building association policies. Following is a discussion of the dwelling form. This policy protects consumers against loss to their property from flooding. The policy is offered under the National Flood Insurance Program (NFIP), under the Federal Emergency Management Agency (FEMA). The authority to offer this coverage is drawn from the National Flood Insurance Act of 1968. The policy refers to this act and states that the coverage relies directly upon the Act and its amendments. The current Dwelling Policy has three sections that appear as an introductory or supplemental part of the flood policy:   

IMPORTANT CHANGES, POLICY CONDITIONS OF SPECIAL NOTE, and SCOPE OF BASEMENT AND ELEVATED BUILDING ENCLOSURE COVERAGE

These sections provide the policyholder with information on changes to the policy and they clarify the coverage involving certain areas that are covered later in the policy. It is important to point out areas of emphasis, since claims may be affected by such changes. The policy begins with an introductory statement, followed by an insuring agreement. The policy is then broken into separate articles. Since the coverage is the direct result of federal legislation; it uses similar document language and structure. Unlike policies issued by private insurance companies, the dwelling policy states that the written contract is automatically subservient to the most current legislation and amendments to flood coverage. Introduction The dwelling form is used to insure one to four family dwelling buildings and their contents. This form may also be used for a mobile home meeting certain criteria. A condominium unit owner may insure his or her unit under the dwelling form as though it were a single-family dwelling, in the name of the individual unit owner and the condominium association, as their interests may appear. While a single residence or unit within a condo building qualifies for coverage, the building itself, which contains more than one condo unit, cannot be written under the Dwelling Form flood policy. Coverage can, however, be written under the NFIP Residential Condominium Building Association Policy.

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Insuring Agreement

INSURING AGREEMENT AGREEMENT OF INSURANCE between the Federal Emergency Management Agency (FEMA), as Insurer, (hereinafter known as "we," "our," and "us,") and the Insured, (hereinafter known as "you" and "your"). We insure you against all DIRECT PHYSICAL LOSS BY OR FROM FLOOD to the insured property, based upon: 1.

Your having paid the correct amount of premium; and

2.

Our reliance on the accuracy of the information and statements you have furnished; and

3. All the terms of this "policy," the National Flood Insurance Act of 1968, as amended, and Title 44 of the Code of Federal Regulations. On this basis, you are insured up to the lesser of: 1. The "actual cash value," except as provided in Article 8, not including any antique value, of the property at the time of loss; or 2. The amount it would cost to repair or replace the property with material of like kind and quality within a reasonable time after the loss.

The insuring agreement establishes the basis upon which the insurance contract will operate by explaining the following:       

The policy protects a covered person from losses caused directly by flooding Any reference to the words "we," "our," "us," or "insurer" means the Federal Emergency Management Agency (FEMA) Any reference to the words "you," or "your" means the Insured The policy terms are controlled by the National Flood Insurance Act and Title 44 of the Federal Regulations Code Payment is based upon the damaged property’s actual cash value, the cost to repair or the cost to replace, whichever is the least expensive option The insurer is able to trust the information supplied by the insured and That any coverage is contingent upon the insurer’s receiving the correct premium.

A loss settlement provision that, in most standard property forms, would be in the section I conditions, appears in the flood policy’s insuring agreement. The insured will receive the lesser of: (1) the actual cash value; or (2) the cost to repair or replace the property with material of like kind and quality.

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ARTICLE 1 - PERSONS INSURED

ARTICLE 1 -- PERSONS INSURED We insure only: A.

The named Insured and legal representatives;

B. Any mortgagee and loss payee named in the "application" and "declarations page," as well as any other mortgagee or loss payee determined to exist at the time of a loss (See Article 9, paragraph P.), in the order of precedence and to the extent of their interest but for no more, in the aggregate, than the interest of the named insured.

The Dwelling Policy covers three groups under the contract: the Insured, the Insured’s legal representatives and any mortgagee or loss payee. Any additional interest, specifically the mortgagee or loss payee, must appear in the application or declarations page. The amount that can be recovered by any additional financial interests in the insured property is limited by their standing as a debtor and the Insured’s total financial interest in the property. Care must be taken to make sure on a regular basis that the entity to be insured is correctly named on the declarations. ARTICLE 2 - DEFINITIONS The words or terms that have special meaning under the flood policy appear in bold-faced type and include:

ARTICLE 2 -- DEFINITIONS As used in this policy: "Act" means the National Flood Insurance Act of 1968, and any acts amendatory thereof. Act - means the National Flood Insurance Act of 1968 as well as any and all changes made to the Act since its introduction.

"Actual Cash Value" means the replacement cost of an insured item of property at the time of loss, less the value of physical depreciation as to the item damaged.

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Actual Cash Value - this term refers to the full replacement cost of an item, minus the amount of physical depreciation at the time a covered loss (flood) occurs.

"Application" means the statement made and signed by you or your agent, and giving information on the basis of which we determine the acceptability of the risk, the "policy" to be issued, and the correct premium payment. The correct premium payment must accompany the "application" for the "policy" to be issued. The "application" is a part of this "flood" insurance "policy."

Application - means the written statement the insured completed and signed for the purpose of getting a flood policy and which FEMA relied upon to issue the coverage. The application must be signed by either the insured or by an agent. The application is considered part of the policy, so any inaccurate statements may, if discovered, either alter the premium or may even void coverage. The application itself becomes a part of the flood policy, and that the correct premium payment must accompany the application for a policy to be issued. If an application is sent without payment, it is returned and no coverage is in effect. "Association" means the group of "unit" owners that manage the “condominium building” in which you, as the insured "unit" owner, maintain your residence.

Association - refers to the persons (unit-owners) who manage the condominium building occupied by a covered condominium unit owner, in accordance with the use of the dwelling flood policy to cover a single condominium, there are definitions relating to this type of property ownership.

"Base flood,” means the "flood" having a one percent chance of being equaled or exceeded in any given year. [The base flood elevation is therefore the water surface elevation resulting from such a flood.

Base flood - for any given community or area, the flood that becomes the standard of measurement of a covered occurrence. Specifically, the flood that has a probability of one percent of being either equaled or exceeded.

"Basement" means any area of the "building," including any sunken room or sunken portion of a room, having its floor subgrade (below ground level) on all sides.

Basement - refers to any area of a covered building which has a floor that is below ground level (subgrade) on all sides. (Any area that is subgrade on all sides is, by policy definition, a

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basement, even if the area is a sunken portion of a ground level floor or even if the area is completely "finished.")

"Building" means a "walled and roofed" structure, other than a gas or liquid storage tank, that is principally above ground and affixed to a permanent site, including a "manufactured" (i.e., mobile) home on a permanent foundation, subject to Article 6, paragraph H. and a "walled and roofed building" in the course of construction, alteration or repair.

Building - This definition includes a defined term, "walled, and roofed structure.” As far as the flood policy is concerned, a building may include:    

Walled and roofed structures (as definition) which are primarily above the ground and are permanently attached to the ground Manufactured homes on a permanent foundation Mobile homes on a permanent foundation Walled and roofed building that is being built, altered or repaired.

Gas or liquid storage tanks, regardless of whether they are permanently attached, do not qualify as buildings that are eligible for coverage under the flood policy. The dwelling form may be used for certain mobile homes, so the definition of "building" encompasses this form of housing. "Cancellation" means that ending of the insurance coverage provided by this "policy" prior to the "expiration date."

Cancellation - refers to coverage that terminates and ends before the policy’s ending date.

"Coastal High Hazard Area" means an area subject to high velocity waters, including hurricane wave wash and tsunamis.

Coastal High Hazard Area - if there is an area that is prone to experiencing dangerous waters such as tsunamis (tidal waves) or hurricane-stirred waters, it qualifies as a coastal high-hazard area.

"Condominium" means a system of individual ownership of "units" in a multi-unit "building" or "buildings" or in single-unit "buildings" as to which each "unit" owner in the "condominium" has an undivided interest in the common areas of the "building(s)" and facilities that serve the "building(s)."

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Condominium - the policy uses a legal definition of condo, referring to any multi-unit residential structure where the single-units are individually owned, and the group of owner’s shares equal interest in the building’s outer structure and any common property areas.

"Condominium Association Policy" means a "policy" of "flood" insurance coverage issued to an "association" pursuant to the "Act."

Condominium Association Policy - means a valid National Flood Insurance Policy that is sold to cover a group of owners who belong to a condominium association.

"Declarations Page" is a computer-generated summary of information furnished by you in the "application" for insurance. The "declarations page" also describes the term of the "policy," limits of coverage, and displays the premium and our name. The "declarations page" is a part of this "flood" insurance "policy."

Declarations Page - the policy coverage page that summarizes the coverage provided by the policy and includes the identifying information on the insured and the covered property from the application. The definition says that the declarations must be computer-generated, which means that hand-written or typed declarations would not qualify as declaration pages. Since the policy is a legal contract, and since coverage can be denied based on the contract, it is very important for all information to be accurate. "Direct Physical Loss by or from Flood" means any loss in the nature of actual loss of or physical damage, evidenced by physical changes, to the insured property ("building" or personal property), which is directly and proximately caused by a "flood" (as defined in this "policy").

Direct Physical Loss By or From Flood - any direct physical damage to covered property that is caused by flooding.

"Dwelling" means a "building" designed for use as a residence for no more than four families and a single family "dwelling unit" in a "condominium building."

Dwelling - includes residences designed for up to four families and single condo-units.

"Elevated Building" means a non-basement "building" which has its lowest elevated floor raised above ground level by foundation walls, shear walls, posts, piers, pilings, or columns.

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Elevated Building - any building with its lowest floor above the ground. The lowest floor may be supported by walls (foundation or shear), posts, piers, or similar items.

"Emergency Program Community" means a community wherein a Flood Hazard Boundary Map (FHBM) is in effect and only limited amounts of insurance are available under the "Act."

Emergency Program Community - any community that has limited flood coverage available as prescribed by the Flood Hazard Boundary Map.

"Expense Constant" means a flat charge per "policy" term, paid by the Insured to defray the Federal Government’s policy writing and other expenses.

Expense Constant - the policy expense fee portion of the flood insurance premium. The fee covers the government’s cost of writing and issuing flood policies.

"Expiration Date" means the ending of the insurance coverage provided by this "policy" on the "expiration date" shown on the "declarations page."

Expiration Date - the ending date of a flood policy’s term of coverage.

"Federal policy fee" means a flat charge per "policy" term, paid by the Insured to defray certain administrative expenses incurred in carrying out the "National Flood Insurance Program" not covered by the "expense constant.” This fee was established by section 1307(a)(1)(B)(iii) of the National Flood Insurance Act of 1968, as amended, and is not subject to producers’ commissions, expense allowances, or state or local premium taxes.

Federal Policy Fee - a fixed amount that is charged each policy term to pay for government flood program costs that are not covered by the expense constant. This charge is not considered when determining commissions, expense allowances, or state/local taxes. There are two flat fees associated with the flood policy, the expense constant and the federal policy fee. The expense constants and federal policy fees are found in the manual.

"Flood" means: A. A general and temporary condition of partial or complete inundation of normally dry land area from:

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1.

The overflow of inland or tidal waters.

2.

The unusual and rapid accumulation or runoff of surface waters from any source.

3. Mudslides (i.e., mudflows) which are proximately caused by flooding as defined in subparagraph A-2 above and are akin to a river of liquid and flowing mud on the surfaces of normally dry land areas, including your premises, as when earth is carried by a current of water and deposited along the path of the current. B. The collapse or subsidence of land along the shore of a lake or other body of water as a result of erosion or undermining caused by waves or currents of water exceeding the cyclical levels which result in flooding as defined in subparagraph A-1 above.

Flood - refers to normally dry areas which have temporarily been covered in whole or in part by overflowing inland or tidal waters, rapid run-off of surface waters (such as heavy rains), mud (flows or slides) or waters present due to the collapse or subsidence of shores. However, the collapse or subsidence must be due to the action of water, such as erosion.

"Improvements" means fixtures, alterations, installations, or additions comprising a part of the insured "building" or "condominium dwelling unit."

Improvements - includes any additional structural features that are part of either a building or a single condo unit.

"Manufactured home" means a "building" transportable in one of more sections, which is built on a permanent chassis and designed to be used with or without a permanent foundation when connected to the required utilities. The term "manufactured home" does not include park trailers, and other similar vehicles. To be eligible for coverage under this "policy," a "manufactured home" must be on a permanent foundation and, if located in a FEMA designated "Special Hazard Area," must meet the requirements of paragraph H. of Article 6.

Manufactured home - means either a mobile home attached to a permanent foundation or a residence that is built at a remote location and then transported and permanently installed at its current site.

"Mobile home" means a "manufactured home."

Mobile home - is defined to be a "manufactured home."

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Many manufactured and mobile homes are eligible for coverage under the flood program. However, certain requirements -- tie-downs or being permanently attached to a foundation -must be met. Loss to manufactured or mobile homes less than 16 feet wide or of at least 600 square feet are settled on an actual cast value basis only. The FEMA designated special hazard areas are listed later in these definitions. "National Flood Insurance Program" means the program of "flood" insurance coverage and floodplain management administered under the "Act" and applicable Federal regulations in Title 44 of the code of Federal Regulations, Subchapter B.

National Flood Insurance Program - means the flood coverage and land management program originally authorized and subsequently amended as the National Flood Insurance Act of 1968.

"Policy" means the entire written contract between you and us; it includes this printed form, the "application," and "declarations page," any endorsements which may be issued and any renewal certificates indicating that coverage has been instituted for a new "policy" and "policy" term. Only one "dwelling building" or "unit," specifically described by you in the "application," may be insured under this "policy," unless application to cover more than one "dwelling building" or "unit" is made on a form or in a format approved for that purpose by the Federal Insurance Administrator.

Policy - refers to the set of documents including the actual flood policy, declarations page and application, as well as any coverage supplements (endorsements) and renewal certificates. Unless approved by the proper authority, only one dwelling or condo-unit may be covered under a single flood policy. The definition reiterates that the flood policy must include the application, declarations page, any endorsements, and renewal certificates. "Post-FIRM building" means a "building" for which the start of construction or substantial improvement occurred after December 31, 1974, or on or after the effective date of the initial Flood Insurance Rate Map (FIRM) for the community in which the "building" is located, whichever is later.

Post-FIRM building - any building started, built, or experiencing substantial improvement after either 12/1/74 or the date that its community’s initial FIRM (Flood Insurance Rate Map) became effective.

"Pre-FIRM rated building" means a "building" for which the start of construction or substantial improvement occurred on or before December 31, 1974, or before the effective date of the initial FIRM for the community in which the "building" is located, whichever is later.

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Pre-FIRM rated building - any building started, built, or experiencing substantial improvement before either 12/1/74 or before the date that its community’s initial FIRM (Flood Insurance Rate Map) became effective.

"Probation Additional premium" means a flat charge per "policy" term paid by the Insured on all new and renewal "policies" issued covering property in a community that has been placed on probation under the provisions of 44 CFR 59.24.

Probation Additional Premium - refers to an additional flat charge that’s made for a policy covering a property located in a community that has been placed under probation. It is a premium surcharge resulting from any deficiency that created the probation action.

"Regular Program Community" means a community wherein a FIRM is in effect and full limits of coverage are available under the "Act."

Regular Program Community - any community that has a FIRM and has full flood coverage available at regular premiums.

"Residential condominium building" means a "building" owned by the members of a "Condominium Association" containing one or more residential "units" and in which at least 75% of the floor area within the "building" is residential.

Residential condominium building - refers to a building that belongs to a condominium association IF at least 75% of the building’s floor area is residential.

"Special hazard area" means an area having special "flood," mudslide (i.e., mudflow) and/or "flood"-related erosion hazards, and shown on a FHBM or FIRM as Zone A, AO, A1-30, AE, A99, AH, AR, VO, V1-30, VE, V, M or E.

Special hazard area - an area that is particularly vulnerable to flood damage and which is designated with a special zoning code on either a FHBM or a FIRM. The zones are:      

A A1-30 A99 AE AH AO AR AR/A AR/A1-30 AR/AE AR/AH AR/AO EMV V1-30 VE VO

"FIRM" means Flood Insurance Rate Map, which is the mapping system used to coordinate flooding areas with rates commensurate with the risk. This mapping is done by FEMA, the

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Federal Emergency Management Agency. Special flood hazard areas (SFHA) are those indicated above. Flood insurance must be purchased within any special flood hazard area as a condition of receipt of federal or federally-related financial assistance for acquisition and/or construction of buildings. "FHBM" means Flood Hazard Boundary Map, which is used when a community first enters the flood program. At this level, only limited coverage is available at flat rates. "Unit" means a single family "dwelling unit," owned by the named insured, in a "condominium building."

Unit - a single dwelling unit that is part of a condominium building, which is individually owned by a flood policyholder.

"Valued policy" means a "policy" contract in which the Insurer and the Insured agree on the value of the property insured, that value being payable in event of total loss. Refer, however, to Article 5.B. The flood policy is not a valued policy.

Valued policy - this term refers to a flood policy that has a limit of insurance that was determined as a mutually agreed-upon amount to be paid if the insured suffers a total flood loss.

"Walled and Roofed" means the "building" has in place two or more exterior, rigid walls and the roof is fully secured so that the "building" will resist flotation, collapse and lateral movement.

Walled and Roofed - refers to a building that is anchored in order to withstand pressures against floating, lateral movement and collapse and which has at least a roof and two rigid, exterior walls. ARTICLE 3 - LOSSES NOT COVERED Within this article, the Dwelling Policy attempts to clarify the situations that are covered under the contract. It states: "We only provide coverage for direct physical loss by or from flood, which means we do not cover:" The policy then goes on to list a number of exclusions under three article parts and all of them will be examined.

ARTICLE 3 -- LOSSES NOT COVERED

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We only provide coverage for "direct physical loss by or from flood" which means we do not cover: A.

Compensation, reimbursement or allowance for:

1.

Loss of use of the insured property or premises.

2.

Loss of access to the insured property or premises.

3.

Loss of profits.

4.

Loss resulting from interruption of business, profession, or manufacture.

5. Your additional living expenses incurred while the insured "building" is being repaired or is uninhabitable for any reason. 6. Any increased cost of repair or reconstruction as a result of any ordinance regulating reconstruction or repair. 7.

Any other economic loss.

Under part A., the policy will not compensate, reimburse an insured, nor provide an allowance for: 1. The insured’s loss of use of the insured premises and/or the covered property. While an insured can suffer genuine economic harm from a flood that prevents an insured from using his residence or premises, since the loss is indirect, it would not be covered. 2. Loss of access to the insured property or premises This is rather similar to exclusion example A.1., however this is an indirect source of loss that does not or may not involve any loss to covered property. 3. Loss of profits This is clearly an exclusion of coverage for indirect loss. There is no coverage under the flood policy for any profits that are lost because of a covered event. 4. Loss resulting from interruption of business, profession, or manufacture. Another source of indirect loss, which is not a direct loss of tangible, insured property, and no claim for such losses will be paid under the flood policy. 5. Your additional living expenses incurred while the insured building is being repaired or is uninhabitable for any reason.

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The flood policy only covers direct damages to an insured residence or personal property from floodwaters, and will not pay expenses suffered by a person whose home can’t be used as a residence. 6. Any increased cost of repair or reconstruction as a result of any ordinance regulating reconstruction or repair, except as provided in Coverage D - Increased Cost of Compliance. The only protection for this type of loss is provided by Coverage D. Otherwise, any legal requirement that adds to the cost to repair or replace a damaged home is not covered. Laws or rules that substantially change an insurer’s exposure, without adjusting their premium for the increased exposure, are a threat to an insurer’s stability. 7. Any other economic loss This exclusion is designed to prevent claims to recover for any type of financial loss that, while connected or related to an insurable event (a flood loss), is not eligible for coverage under the flood policy.

B.

Losses from other casualties, including loss caused by:

1. Theft, fire, windstorm, wind, explosion, earthquake, land sinkage, landslide, destabilization or movement of land resulting from the accumulation of water in subsurface land areas, gradual erosion, or any other earth movement except such mudslides (i.e., mudflows) or erosion as is covered under the peril of "flood." 2. Rain, snow, sleet, hail or water spray. 3. Land subsidence, sewer backup, or seepage of water unless, subject to additional deductibles as provided for at Article 7, (a) there is a general and temporary condition of flooding in the area, (b) the flooding is the proximate cause of the land subsidence, sewer backup, or seepage of water, (c) the land subsidence, sewer backup, or seepage of water damage occurs no later than 72 hours after the "flood" has receded, and (d) the insured "building" must be insured, at the time of the loss, for at least 80 percent of its replacement cost or the maximum amount of insurance available under the "National Flood Insurance Program." 4. Freezing, thawing, or the pressure or weight of ice or water. 5. Water, moisture, mildew, mold or mudslide (i.e., mudflow) damage resulting primarily from any condition substantially confined to the described "dwelling" or from any condition which is within your control (including but not limited to design, structural or mechanical defects, failures, stoppages or breakages of water or sewer lines, drains, pumps, fixtures or equipment).

B. Losses from other casualties, including loss caused by: Under item B.1., there is no coverage for loss caused by non-flood perils. Specifically:  

Theft Fire

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      

Windstorm/wind Explosion Earthquake Land sinkage Land destabilization or movement caused by underground water accumulation Gradual erosion, or Any other type of earth movement.

An exception is made for the limited types of earth movement, which are covered. (Refer to the definition of flood). 2. Rain, snow, sleet, hail or water spray Policyholders under the flood program have to look elsewhere for damage caused to their property from these perils. Many areas, especially along the coast, may be eligible for government windstorm coverage. Check with your state. 3. The flood policy does not cover land subsidence, water seepage or sewer backup unless these events are caused by flooding of underground areas. The subsidence, seepage or backup has to take place within 72 hours of the flooding condition. Such damage is subject to the policy’s deductibles. In order to qualify for coverage, the insurance limit on the described property must equal or exceed 80% of the property’s replacement cost or the maximum amount of protection that can be provided by the National Flood program. Essentially this is an 80% coinsurance requirement. 4. Freezing, thawing, or the pressure or weight of ice or water This narrows the scope of coverage to the flood policy’s purpose for covering its definition of flood only. 5. While the flood policy does provide coverage for damage caused by flooding, it does not cover losses involving:     

Water Moisture Mildew Mold or Mudslide or mudflow

This is the case if the loss is a result of a condition that exists at the described location OR is due to a condition that is under the insured’s control, such as defects in design or structure, mechanical deficiencies, failure or stoppage; as well as broken water lines, pumps, sewer lines, drains, fixtures or equipment. Another set of excluded events are found in Article 3, part C.

C.

Losses of the following nature:

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1. A loss which is already in progress as of 12:01 A.M. of the first day of the "policy" term, or, as to any increase in the limits of coverage which is requested by you, a loss which is already in progress as of 12:01 A.M. on the date when the additional coverage becomes effective. 2. A loss from a "flood" which is confined to the premises on which your insured property is located unless the "flood" is displaced over two acres of the premises. 3. A loss caused by your modification to the insured property, which materially increases the risk of flooding. 4.

A loss caused intentionally by you or any member of your household.

5. A loss caused by or resulting from power, heating or cooling failure, unless such failure results from physical damage to power, heating or cooling equipment situated on the premises where the described "building" or "unit" is located, caused by a "flood." 6. Loss to any "building" or contents located on property leased from the Federal Government, arising from or incident to the flooding of the property by the Federal Government, where the lease expressly holds the Federal Government harmless, under "flood" insurance issued under any Federal Government program, from loss arising from or incident to the flooding of the property by the Federal Government.

C. Losses of the following nature: 1. A loss that already exists at the time when the effective date of the flood policy first takes effect. The starting time for coverage is 12:01 A.M. of the first day of the policy period. Losses "in process" as of 12:01 A.M. of the first day of the policy term are not covered. Although the flood policy is not continuous, this provision applies to new policies. Provided the insurer receives the renewal premium within 30 days of the expiration date there is no lapse in coverage. This same stipulation exists concerning any increase in coverage. Neither coverage, nor a higher limit of coverage apply to a flood loss that has already occurred. 2. A loss from a flood that is confined to the premises on which your insured property is located unless the flood is displaced over two acres of the premises. Finally, any loss resulting from flood strictly on the insured premises is not covered, unless the flood occurs over two acres or more of the insured’s premises. If an insured suffers a flood that is limited in area, then the loss is not covered. Such a localized flood is not of catastrophic proportions. It may also be under the insured’s control. 3. A loss caused by your modification to the insured property, which materially increases the risk of flooding.

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4. A loss caused intentionally by you or any member of your household. The loss must be accidental in nature. Creating a loss on purpose is also fraudulent and may be a criminal offense. 5. The flood policy normally excludes flood losses, which are due to the failure of a covered property’s heating, cooling systems or of its loss of power. However, such losses can qualify for coverage when it is an eligible flood that creates the loss of power or system failure. 6. There is no coverage for flood damage to any building or contents that is located on property that is leased from the Federal Government under the following circumstances:   

The property has been flooded by the Federal Government The property is protected by a flood policy issued by the Federal Government There is a hold harmless agreement that relieves the government from liability under the flood policy

In the above situation, no claim can be made for any indirect losses or expenses related to the property being flooded. ARTICLE 4 -PROPERTY COVERED

ARTICLE 4 -- PROPERTY COVERED (Subject to ARTICLES 3, 5 and 6 Provisions, Which also Apply to the Other Articles, Terms and Conditions of This Policy, Including the Insuring Agreement)

The policy states that Article 4’s provisions are controlled by the conditions found in: Article 3 - Losses Not Covered Article 5 - Special Provisions Applicable To Coverages A, B, and C, and Article 6 - Property Not Covered COVERAGE A - Building Property

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Subject to Paragraph C. below, we cover your dwelling, which includes: A. A residential "building," not a "condominium," designed for principal use as a "dwelling" place for no more than four families, including: 1. Additions and extensions attached to and in contact with the "dwelling" by means of a common wall (but see Article 6, paragraph D.2.). 2. Materials and supplies to be used in constructing, altering or repairing the "dwelling" or an appurtenant structure while stored inside a fully enclosed "building": a.

At the property address; or

b.

On an adjacent property at the time of loss; or

c. In case of another "building" at the property address which does not have walls on all sides, while stored and secured to prevent flotation out of the "building" during flooding (the flotation out of the "building" shall be deemed by you and us to establish the conclusive presumption that the materials and supplies were not reasonably secured to prevent flotation, in which case no coverage is provided for such materials and supplies under this policy). 3. As appurtenant structures, detached garages and carports located at the described premises, at your option at the time of loss, in an amount up to 10% of the amount of insurance you have purchased to cover the "dwelling," including additions to the "dwelling." By exercising this option, you reduce the amount of insurance available to cover other loss relating to Coverage A. This option may not be used to extend coverage to "buildings": a. Occupied, rented or leased in whole or in part for "dwelling" purposes (or held for such use); or b.

Used in whole or in part for business or farming purposes (or held for such uses); or

c.

Which are boathouses.

4. A "building" in the course of construction before it is "walled and roofed" subject to the following conditions: a. The amount of the deductible for each loss occurrence before the "building" is "walled and roofed" is two times the deductible which is selected to apply after the "building" is "walled and roofed"; b. Coverage is provided before the "building" is "walled and roofed" only while construction is in progress, or if construction is halted, only for a period of up to 90 continuous days thereafter, until construction is resumed; and c. There is no coverage before the "building" is "walled and roofed" where the lowest floor, including "basement" floor, of a non-elevated "building" or the lowest elevated floor of an

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"elevated building" is below the "base flood" elevation in Zones AH, AE or Al-30 or is below the "base flood" elevation adjusted to include the effect of wave action in Zones VE or V1-30. The lowest floor levels are based on the bottom of the lowest horizontal structural member of the floor in Zones VE or V1 -30 and the top of the floor in Zones AH, AE or Al-30. This section of Article 4 describes the type of building property that qualifies for coverage under the dwelling flood policy. Specifically, this Article extends coverage to dwellings that are defined as including the following: A. A residential building. The building must be both designed and used primarily as a residence. It is also limited to a maximum of four families. The building does not qualify for coverage under the dwelling flood policy if it is a condominium. 1. Additions and Extensions. Parts of an eligible dwelling that are being added to or which will extend the property also qualify as a dwelling if the addition or extension shares a common wall. This strict qualification makes it apparent that it is meant to cover projects under construction. 2. Materials and Supplies Materials and supplies intended for building onto, or repairing the covered dwelling or an appurtenant (related to the premises) structure also qualify for protection against flood damage. The protection exists, however, only if the material is stored in an enclosed building which must meet the flood policy’s definition of building. The materials must also be in an eligible building that is either:  

Located at the covered dwelling’s address, or At a location next to the dwelling address.

If the materials are kept at a different building on the insured location, but the building does not have the required walls, coverage may still apply if the materials are secured tightly enough to avoid floating. The dwelling also covers attached building additions and extensions; building equipment, fixtures, and outdoor equipment while inside the building or another fully enclosed building on the premises; and materials and supplies for constructing, altering, or repairing the dwelling or another insured building on the premises. Such materials and supplies are covered only while stored inside a fully enclosed building on the premises or an adjacent property; or while stored in a building on the premises that does not have walls on all sides, provided the materials and supplies have been secured to prevent flotation out of the building during flooding. 3. Appurtenant structures, detached garages and carports that are located at the property address.

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Detached garages or carports on the described premises are automatically covered for up to 10% of the dwelling amount, but this provision does not increase the overall amount of insurance. The policyholder can elect to apply up to 10% of the dwelling insurance limit to cover losses to appurtenant structures. Whatever amount is paid for damages to this property reduces the amount available for the dwelling. The option of applying part of the dwelling limit to other structures cannot be exercised when the structure is:   

Rented, held for rental, or leased to others as a dwelling, Used in business or farming A boathouse.

4. A building in the course of construction before it is "walled and roofed" is subject to the following conditions: a. The first limitation under this "dwelling" qualification is that, in the event of a loss before the covered building is enclosed by walls and a roof, the regular policy deductible is doubled. b. The coverage that applies to buildings that haven’t been walled and roofed is only valid during the time that the dwelling is being actively built. If construction is halted, coverage applies only for 90 days following the halt. c. Finally, a building which is not yet walled and roofed may not be covered depending upon whether its lowest level is beneath the applicable base flood elevation. What is considered the lowest level depends upon whether the building is elevated or not, as well as its zone. If the incomplete structure has a floor that is below what is acceptable in the given zone, no coverage applies. Points a and b concerning the increased deductibles and active construction are moot; no coverage applies. If the 10% option provides less than adequate coverage, a separate dwelling policy on the garage should be written. Blanket coverage is not permitted.

B. Or, we cover your single-family "dwelling" unit, including "improvements" therein owned solely by you, in a "condominium building." We also cover your share of assessments made against you as a tenant in common in that "building’s" common elements and the common elements of any other "building" of your "Condominium Association" covered by insurance that is: 1.

In the name of your "Condominium Association";

2.

Provided under the "Act"; and

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3. In an amount at least equal to the "actual cash value" of the "building’s" common elements at the beginning of the current "policy" term or the maximum "building" coverage limit available under the "Act," whichever is less. Provided, with respect to coverage for single-family "dwelling unit assessments: 1. Coverage is available only when each of the "unit" owners comprising the membership of the "Association are also assessed by reason of the same cause and provided the assessment arises out of a "direct physical loss" by or from "flood" to the "condominium building" in which your "unit" is located or to another "condominium building" of the "Association," as to which the "condominium" documents (Articles of Association, Declarations, and your Deed) impose upon you the responsibility for such an assessment). The deductibles provisions of Article 7 of this policy do not apply to assessments. 2. Assessments made by the "Association" to recoup the amount of a loss deductible incurred by the "Association" in connection with any "condominium building" or contents "policy" of insurance are not covered. 3. Assessments made by the "Association" in connection with loss of or damage to personal property, including any contents of any "condominium" building of the "Association," are not covered. 4. Assessments made by the "Association" of a "condominium building" are not covered if the assessments are made to recoup loss not reimbursed to the "Association," under a "policy" of insurance issued pursuant to the "National Flood Insurance Program," by reason of the fact that the "condominium building" insured under such "policy" was not, at the time of the loss, insured in an amount equal to the lesser of 80% or more of the full replacement cost of the "building" or the maximum amount of insurance available under the "National Flood Insurance Program."

B. The dwelling policy also covers certain condominium arrangements. These limitations are necessary in order to assure that an individual’s flood coverage is not used to provide coverage for a Condo Association or for other individuals who should have purchased their own adequate amount of flood insurance. There is no coverage for an assessment made to recoup the association deductible, or to cover damage to personal property of the association. Also, if a unit owner is assessed for loss because of the association’s failure to carry at least 80% of replacement cost or the maximum amount of insurance available under the flood program, there is no coverage. An assessment situation must also involve:   

The assessment of every member of the Condo Association The assessment must be for common building property which has suffered direct damage from a covered cause of loss The assessment must be within the Condo Association’s documented authority.

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The form covers a single unit, improvements made therein, and assessments made against the unit owner for property owned in common. Certain limitations apply.

C. And we cover fixtures including the following items of property, if owned solely by you, for which coverage is not provided under "COVERAGE B - PERSONAL PROPERTY" ·

Furnaces

·

Wall mirrors permanently installed

·

Permanently Installed Corner Cupboards, Bookcases, Paneling, and Wallpaper

·

Venetian Blinds

·

Central Air Conditioners

·

Awnings and Canopies

·

Elevator Equipment

·

Fire Sprinkler Systems

·

Built-in Dishwashers

·

Garbage Disposal Units

·

Outdoor Antennas and Aerials

·

Pumps and Machinery for operating them

·

Carpet Permanently Installed Over Unfinished Flooring

·

Built-in Microwave Ovens

·

Hot Water Heaters, Including Solar Water Heaters

·

Ranges and Stoves

·

Radiators

·

Kitchen Cabinets

·

Light Fixtures

·

Plumbing Fixtures

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·

Refrigerators

C. Fixtures eligible for coverage under Coverage A - Building Property. This portion of Coverage A extends coverage to individually owned personal property that is not covered under Coverage B - Personal Property. The property involves items that, while not structures, are generally attached to structures or incorporated into structures. These items are treated as building items for coverage purposes. These include items such as central air conditioning units, furnaces, built-in dishwashers, etc. Carpeting, if wall-to-wall and permanently installed over unfinished flooring, is treated as a building item. The provision states that these items are covered if owned solely by the insured; if the policy is used to insure a condominium unit, many of these items fall under the association policy’s coverage. COVERAGE B - Personal Property

COVERAGE B -- PERSONAL PROPERTY

The next part of Article 4 - Property Covered concerns personal property.

A.

Subject to paragraphs B. and C. below, we cover personal property:

1.

Owned by you as contents incidental to the occupancy of the "building."

2.

Owned by members of your family in your household.

3. At your option and within the limits of personal property coverage you have purchased, owned by your guests and servants. Such personal property is covered while stored: a.

Within your "dwelling";

b.

Within a fully enclosed "building" at the property address;

c. Within a "building" having in place two or more rigid walls and a fully secured roof if the contents are secured to prevent flotation out of the "building" during flooding. The flotation out of the "building" during flooding of any such contents shall be deemed to establish the conclusive presumption that the contents were not reasonably secured to prevent flotation; or

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d. At a temporary location, as expressly authorized under this policy (see Article 5, paragraph C.2.). Contents coverage applies to personal property, owned by the named insured or resident relatives, incidental to the occupancy of the building as a dwelling. An insured may elect to have coverage under their policy extend to personal property that belongs to houseguests or servants. The coverage maximum is controlled by the policy’s insurance limits. The coverage applies only while the property is within a building at the insured premises. Property within an unenclosed building on the premises having two or more rigid walls and a fully secured roof are covered only if the contents are secured to prevent flotation out of the building during flooding. Personal property is also covered for 45 days when moved away from a special hazard area if endangered by flooding. Regarding property in temporary locations, the location must be permitted under the policy provisions. Please refer to Article 5, paragraph C.2.

B. Coverage, under this "COVERAGE B - PERSONAL PROPERTY", includes the following property if owned solely by you, for which coverage is not provided under "COVERAGE A -BUILDING PROPERTY": ·

Clothes Washers

·

Clothes Dryers

·

Food Freezers

·

Air Conditioning Units

·

Portable Dishwashers

· Carpet, including wall-to-wall carpet, over finished flooring and whether or not it is permanently installed ·

Carpet not permanently installed over unfinished flooring

· Outdoor equipment and furniture stored inside the dwelling or another fully enclosed building at the property address ·

Portable microwave ovens and "cook-out" grills, ovens and the like

Portable appliances that are not built in are covered as personal property if owned solely by the insured. Any is treated as personal property if it is over a finished floor, whether permanently installed or not. Outdoor equipment and furniture is only covered when it is stored inside a dwelling or a building at the same property address, as long as the building is fully enclosed.

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The above property is very similar to the property listed as eligible for coverage under Coverage A - Building Property. The difference is Coverage B is meant to cover property that is portable.

C. Limitations. Under this "COVERAGE B -- PERSONAL PROPERTY" we shall not reimburse you for loss as to: 1. Personal property owned by you in common with any "unit" owners comprising the membership of a "Condominium Association." 2. The following personal property to the extent the loss to any one or more of such property exceeds, individually or in total, $2,500: · Artwork, including but not limited to, paintings, etchings, pictures, tapestries, art glass windows including their frames, statuary, marbles, and bronzes; ·

Rare books;

· Necklaces, bracelets, gems, precious or semi-precious stones, watches, articles of gold, silver, or platinum; or ·

Furs or any article containing fur which represents its principal value.

Personal property owned by the insured in common with any other condominium association members is not covered. The limit on certain classes of property such as furs, jewelry, articles of gold or silver, fine arts and rare books is $2,500. Such items should be scheduled under the insured’s homeowner’s policy. ISO form HO 04 61 or H0 04 60 does not exclude loss or damage caused by flood. Coverage could also be provided by a personal inland marine floater policy. COVERAGE C- DEBRIS REMOVAL

COVERAGE C -- DEBRIS REMOVAL Within the limits of your coverage, we cover any expense you incur, including the value of your own labor and the labor of members of your household at prevailing Federal minimum wage rates, as a result of removing debris of, on or from the insured property so long as the debris problem was directly caused by a flood. Under these provisions coverage extends to: A. Non-owned debris from beyond the boundaries of the described premises, which is physically on the insured property. B.

Parts of the insured property, which is anywhere:

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1.

On the described premises; and

2.

On property beyond the boundaries of the described premises.

Flood losses normally include many instances of insured property being covered in debris. Debris removal provides coverage for expenses incurred for removing debris of, on, or from the insured property, provided the debris results from a flood. The policy states that this coverage includes the value of the insured’s own labor (and the labor of the insured’s household members) for clearing debris, at prevailing Federal minimum wage rates. The coverage will pay for handling: 

Any foreign debris that is laying on your premises



Any debris consisting of your own property which is either on your property or elsewhere

The coverage is included within the limit of insurance shown for the coverage. COVERAGE D - INCREASED COST Of COMPLIANCE

ARTICLE 4 -- COVERAGE D Increased Cost of Compliance coverage (Coverage D) is for the consequential loss brought on by a floodplain management ordinance or law affecting repair and reconstruction involving elevation, floodproofing, relocation, or demolition (or any combination thereof) of a structure, after a direct loss caused by a "flood" as defined by this policy. (Floodproofing activities eligible for Coverage D and referred to hereafter in this policy are limited to residential structures with basements that satisfy the criteria of 44 CFR 60.6 [b] or [c] and to non-residential structures.) The limit of liability under this Coverage D (Increased Cost of Compliance) is $30,000. This coverage is only applicable to policies with building coverage (Coverage A) and is in addition to the building limit you selected on your application and appears on the Declarations Page. No separate deductible applies. The maximum amount collectible under this policy for both Coverage A (Building property) and Coverage D (Increased Cost of Compliance), however, cannot exceed the maximum permitted under the Act.

Unlike Coverage Parts A, B, and C, Coverage D provides protection against an indirect source of loss. Coverage D assists an insured with an increase in building or repair costs due to a law or regulation involving the rebuilding, repairing, relocating, or demolishing of covered property damaged by flooding.

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Non-residential structures and residences that include basements (if they meet certain requirements found in the Federal regulations) may also qualify for coverage for floodproofing efforts. Increased cost of compliance coverage is now mandatory for all standard flood policies except for those on individual condominium units, those in Emergency Program communities, contentsonly policies, and group flood insurance. Although the amount of coverage provided is $30,000, this is not an additional amount of insurance. Rates are found in the flood manual; the premium is not eligible for a deductible discount. New business and renewals with an effective date on or after June 1, 1997, will include the coverage. Although the coverage cannot be endorsed mid-term, anyone with a three-year policy may cancel on an anniversary date and rewrite the policy to include increased cost of compliance. The protection under Coverage D applies in policies with a limit of insurance for Coverage A Building Property:    

The maximum amount of coverage available is $30,000. No deductible applies to this coverage. This coverage is in addition to the amount of insurance provided under Coverage A. The total amount of insurance provided by Coverages A and D may not exceed the maximum dollar amount allowed by the Act.

Eligibility A structure covered under coverage A - Building Property sustaining a loss caused by a "flood" as defined by this policy must: 1. Be a structure that is a repetitive loss structure. A "repetitive loss structure" means a structure, covered by as contract for flood insurance issued pursuant to the Act, that has incurred flood-related damage on 2 occasions during a 10-year period ending on the date of the event for which a second claim is made, in which the cost of repairing the flood damage, on the average, equaled or exceeded 25% of the market value of the structure at the time of each such flood event. In addition to the current claim, the National Flood Insurance Program (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, or 2. Be a structure that has had flood damage in which the cost to repair equals or exceeds 50% of the market value of the structure at the time of the flood event. The State or community must have a substantial damage provision in its floodplain management law or ordinance being enforced against the structure. This Coverage D will not pay for Increased Cost of Compliance to meet State or community floodplain management laws or ordinances which exceed the minimum criteria at 44 CFR 60.3, except as provided in 1. above or a. or b. as follows:

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a. Elevation or floodproofing in any risk zone to preliminary or advisory base flood elevations provided by FEMA which the State or local government has adopted and is enforcing for flooddamaged structures in such areas. (This includes compliance activities in B, C, X, or D zones which are being changed to zones with base flood elevations. This also includes compliance activities in zones where base flood elevations are being increased, and a flood-damaged structure must comply with the higher advisory base flood elevation.) Increased Cost of Compliance coverage does not respond 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. b. Elevation or floodproofing above the base flood elevation to meet State or local "freeboard" requirements, i.e., that a structure must be elevated above the base flood elevation. 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 base flood elevation where elevation data is obtained from a Federal, State, or other source. Such compliance activities are also eligible for this coverage D. This coverage will also pay 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 laws or ordinances, subject to Exclusion (7). This coverage will also pay to bring a flood-damaged structure into compliance with State or local floodplain management laws or ordinances even if the structure had received a variance prior to the present loss from the applicable management requirements.

The Coverage D - Increased Cost of Compliance’s Eligibility section explains the types of situations that qualify for this coverage. According to this section, there are two situations in which building property may qualify for protection under Coverage D. A building may either be a repetitive loss structure or a structure that has been damaged by 50% or more in a single flood loss. 1. Be a structure that is a repetitive loss structure. This paragraph provides the definition of "repetitive loss structure" and then explains that a qualifying loss must involve: 



A state or local law which contains either a cumulative substantial damage or a repetitive loss provision in its floodplain management law or ordinance which is being applied against the structure and The NFIP must have paid for the first claim.

This is not an automatically-applied coverage. A damaged building must meet certain criteria before being afforded increased cost of compliance. One qualifying criterion is that there must have been a previous claim within the 10 years preceding the current claim, which was reimbursed by the NFIP. The cost of repairing the flood damage must have, on average, equaled or exceeded 25% of the market value of the structure. The state or community must

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have a cumulative, substantial damage provision or repetitive loss provision being enforced against the structure. Repetitive Loss Structure - any eligible building covered by a flood policy under the Act’s provisions for property that has suffered more than one flood loss, and the loss amount was more than 25% of the property’s market value. The special coverage lasts for ten years after the occurrence of the second flood loss. 2. Be a structure that had flood damage in which the cost to repair equals or exceeds 50% of the market value of the structure at the time of the flood event. Another criterion is that a structure has had damage in which the cost to repair equals or exceeds 50% of the market value at the time of the flood. If a floodplain management law contains a substantial damage provision, the coverage responds. A structure that suffers a substantial loss qualifies for Increased Cost of Compliance coverage only if a state or local community is applying a substantial damage provision (or something similar) to the property and such a provision is contained in the community’s floodplain management laws or ordinances. The dwelling policy is not designed to handle all increased costs caused by compliance laws or regulations. Coverage is limited to the criteria found in 44 CFR 60.3; with several exceptions. The first one is the loss qualification explained under the preceding item 1. (concerning "repetitive loss structures.") The added protection provided by Coverage D also covers: 



The increase in cost of elevation or floodproofing that is needed to have a damaged home comply with FEMA base flood elevations in any risk zone. However, the cost has to be the result of a state or community adopting and enforcing the FEMA recommendations. This exception includes situations where elevations which are being increased in zones B, C, X or D, are being switched to base flood elevations unless the elevations are derived by the state or community instead of elevations recommended by FEMA. The increase in costs of elevation or floodproofing that is needed to have a damaged home exceed FEMA base flood elevations if it is done to comply with state or local "freeboard" requirements.

Besides these exceptions, Coverage D will also pay the additional costs (subject to its insurance limits) when:  



The increased cost is created in an unnumbered A zone where the elevation or floodproofing is done to comply with the base flood elevation recommended according to federal, state or local elevation data: The incremental costs of elevating or floodproofing to meet state or local floodplain management laws after a covered structure has been demolished or relocated and the costs are incurred while the structure is being rebuilt either at the same site or at another site; The costs are incurred to make a damaged building compliant, even when the applicable authority granted a variance prior to the loss.

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When a community or state passes its own ordinances or laws that exceed the minimum as set forth in the Federal Register, then the coverage will not respond except under certain conditions. These can include the state or community acting upon either (1) advisory base flood elevations provided by FEMA, or (2) zones in the minimal to moderate hazard (zones B, C, X, or D) areas that are being changed to zones having a base flood elevation. The coverage will pay for floodproofing to meet floodplain management laws or ordinances even if the structure is rebuilt at another site. Even if the structure had previously received a variance from floodplain management requirements before the current loss, the coverage will pay to bring the structure into compliance with existing state or local law.

Conditions 1. When a structure covered under Coverage A - Building Property sustains a loss caused by a "flood" as defined by this policy, our payment for the loss under this Coverage D will be for the increased cost to elevate, floodproof, relocate, demolish, or any combination thereof, caused by enforcement of current State or local floodplain management ordinances or laws. Eligible activities for the cost of clearing the site will include those necessary to discontinue utility service to the site and ensure property abandonment of on-site utilities. 2. When the building is repaired or rebuilt, it must be intended for the same occupancy as the present building unless otherwise required by current floodplain management ordinances or laws.

This provision states clearly the intent of the coverage. The trigger for coverage is the enforcement of any current state or local floodplain management ordinance or law, except those under the eligibility requirements. 1. A covered structure must suffer direct damage from flooding. The flood loss must be accompanied by an increase in claim costs, due to the enforcement of a law or regulation involving floodplain management. The items eligible for coverage include increased costs to:    

Elevate Floodproof Relocate Demolish (including clearing the site, discontinuing utilities and properly abandoning utilities located on the loss site),

a covered structure including any combination of the above activities. 2. The building that is rebuilt or repaired must have the same use and occupancy as the building that was damaged or destroyed unless a change is made because of an ordinance or law.

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Exclusions Under this Coverage D (Increased Cost of Compliance) we will not pay for: (1) The cost associated with enforcement of any floodplain management ordinance or law in communities participating in the Emergency Program. (2) 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. Pollutants include but are not limited to any solid, liquid, gaseous, or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acid, alkalis, chemicals, and waste. Waste includes but is not limited to materials to be recycled, reconditioned, or reclaimed. (3) The loss in value to any covered building or other structure due to the requirements of any ordinance or law. (4) 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. (5)

Any Increased Cost of Compliance under this Coverage D:

(a) Until the covered building is actually elevated, floodproofed, demolished, or relocated on the same or to another premises; and (b) Unless the covered building is elevated, floodproofed, demolished, or relocated as soon as reasonably possible after the loss, not to exceed two years.

This section explicitly states that under Coverage D - Increased Cost of Compliance, there is no coverage for costs created by authorities enforcing: (1) Floodplain management laws or ordinances in a community that is participating in the Emergency Program. (2) Pollution related regulations that mandate an insured to:         

Test for, Clean up, Monitor, Contain, Treat, Detoxify, Neutralize, Respond to, or Assess the impact of pollutants.

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The flood policy uses the same description of pollutants that is found in standard property and casualty insurance policies. In addition to items 1 and 2., there is also no coverage under Coverage D for: (3) A loss in a covered structure’s (or other structure’s) value because of complying with a flood regulation. (4) The loss of residual value of the undamaged portion of a covered structure that must be demolished or relocated because of complying with a flood regulation. The loss in value because of the ordinance or law requirements, and the loss in residual value to any undamaged portion of a structure that must be demolished because of ordinance or law is excluded. (5) Any increased cost: (a) Until the covered building actually undergoes the required elevation, floodproofing, demolition or relocation, or (b) Unless the required compliance activity takes place within a maximum of two years from the loss date. The insurer is not obligated to pay for activity that either doesn’t actually take place or doesn’t take place in a timely manner. This protects the insurer against paying for costs due to prolonged delay.

(6) Any code upgrade requirements, e.g., plumbing or electrical wiring, not specifically related to the State or local floodplain management law or ordinance. (7) any compliance activities needed to bring additions or improvements made after the loss occurred into compliance with State or local floodplain management laws or ordinances. (8) Loss due to any ordinance or law that you were required to comply with before the current loss. (9) Any rebuilding activity to standards that do not meet the NFIP’s minimum requirements. This includes any situation where the insured 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 base flood elevation. (10)

Increased Cost of Compliance for appurtenant structure(s).

(11) Any structure insured under a Group Flood Insurance Policy issued pursuant to 44 CFR 61.17.

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(12) 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 ordinances or laws.

(6) Any code upgrade requirements that are not part of a state or local floodplain management law or ordinance. Any code upgrades not directly related to floodplain management are not covered. (7) Any compliance activities needed to bring additions or improvements, made after the loss occurred, into compliance with state or local floodplain management laws or ordinances If any additions or improvements are made following a loss and it is learned they do not comply with ordinance or law, the coverage will not respond. (8) Loss due to any ordinance or law that you were required to comply with before the current loss. (9) Any rebuilding activity to standards that does not meet the NFIP’s minimum requirements. This includes any situation where the insured 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 base flood elevation. If an insured receives a variance to rebuild at an elevation not meeting the NFIP’s minimum standards, the rebuilding will not be covered by this endorsement. Even when a policyholder suffers a serious loss which includes a requirement to improve the structure to meet local flood standards, but not the minimum standards set by the NFIP, the dwelling policy’s Coverage D will not cover the increased cost even when the policyholder has a variance not requiring him or her to meet the higher standard. (10) Increased Cost of Compliance for appurtenant structures. Regardless of the circumstances surrounding a loss to appurtenant structures, there is no protection under Coverage D for increased costs due to having to comply with state or local ordinances. (11) Any structure insured under a Group Flood Insurance Policy issued pursuant to 44 CFR 61.17. Any structure insured under the specified group policy is not eligible for protection by the dwelling policy since that would result in duplicate coverage. This is insurance issued in response to a Presidential declaration of disaster. This is a program in which disaster assistance recipients, in exchange for a small premium, receive a minimal amount of building and/or contents coverage for a three-year period.

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(12) Assessments made by a condominium association or individual condominium unitowners to pay increased costs of repairing commonly owned buildings after a flood in compliance with state or local floodplain management ordinances or laws. The exclusion is designed to prevent the ability of a condo association to get coverage under individual condo owners flood insurance policies.

Other Provisions (1) Increased Cost of Compliance coverage will not be included in the calculation to determine whether coverage meets the 80% insurance-to-value requirement for replacement cost coverage under Article 8 of the Dwelling Policy nor for coinsurance under Article 9 of the Residential Condominium Building Association Policy, or General Property Policy, for loss from land subsidence, sewer backup, or seepage of water. (2)

All other conditions and provisions of the policy apply.

(3) Paragraph A.6. of Article 3 of the Dwelling, General Property, and Residential Condominium Building Association Policies is amended to add the following phrase at the end: "except as provided in Coverage D -- Increased Cost of Compliance."

There are two items under this part of Article 4. (1) When calculating insurance to value at the time of a loss, the $30,000 of insurance provided under this coverage is not included. Any increase in cost of a serious loss does not affect any insurance-to-value calculation made to determine if the insurance coverage qualifies for replacement cost valuation; nor for coverage as described under Article 8 concerning losses involving land subsidence, sewer backup or water seepage. (2) All of the policy’s remaining conditions and provisions apply to Coverage D. ARTICLE 5 - SPECIAL PROVISIONS APPLICABLE TO COVERAGES A, B, AND C This Article consists of several policy provisions that affect Coverage A - Building Property, Coverage B - Personal Property, and Coverage C - Debris Removal.

ARTICLE 5 -- SPECIAL PROVISIONS APPLICABLE TO COVERAGES A, B, AND C A. Condominium "unit" owner coverage is excess over "Association" coverage. The insurance under this "policy" shall be excess over any insurance in the name of your "Condominium

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Association" covering the same property covered by this "policy." Loss shall not be paid under "COVERAGE A - BUILDING PROPERTY", paragraph B., and under "COVERAGE B PERSONAL PROPERTY" until we have verified the extent to which loss to "improvements" and personal property within your "unit," and to the common elements of your "building" or any other "building" of your "Condominium Association," is covered by any insurance in the name of your "Condominium Association." Should the amount of insurance collectible under this "policy" for a loss, when combined with any recovery available to you as a tenant in common under any "Condominium Association" "flood" insurance "policy" provided under the "Act" for the same loss, exceed the statutorily permissible limits of "building" coverage available for the insuring of single-family "dwellings" under the "Act," then the limits of "building" coverage under this policy shall be reduced in regard to that loss by the amount of such excess.

A. Condominium unit owner coverage is excess over Association coverage. The dwelling policy recognizes the potential for "over-insurance" in the case of policies issued to condo unit owners. The individual owner is also covered by his condo association policy, especially in regard to property that is commonly-owned by all of the members of the condominium association. Under Coverage A - Building Property and Coverage B - Personal Property, the coverage parts respond in two ways when there is a covered loss. When there is no other source of coverage, the policy pays on a primary basis. However, if there is another source of coverage, such as a condo association policy (in the condo association’s name) the dwelling policy pays on an excess basis. The policy also states that if the total amount of flood coverage available to a dwelling is greater than the amount that is permitted under the act, the insurance limit of the dwelling coverage is reduced to the applicable maximum. This provision is a safeguard against circumventing the limitation of the primary flood coverage that is already written at the maximum amount permitted. This policy is excess coverage over any available under the condominium association flood policy, when both policies cover the same property.

B. This "policy" is not a "valued policy." Loss will be paid, provided you have purchased a sufficient amount of coverage, i.e., in an amount equal to the lesser of the value of the damaged property under the terms and conditions of this "policy" (and regardless of whether the amount of insurance purchased is greater than such value) or the limit of coverage permitted under the "Act."

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B. This policy is not a valued policy. The flood policy is not a valued policy. The limit of insurance on the declarations is not necessarily the amount that will be recovered in event of a covered loss. The lesser of the value of the damaged property or the limit of coverage permitted by the National Flood Insurance Act (currently $250,000 per dwelling) is the maximum amount that will be paid. A valued policy is a contract in which the insurance limit that appears is a guaranteed amount that is due if a total loss occurs. Under a dwelling policy, the maximum amount that will be paid depends upon the current value of the property being protected.

C. Insured Property, Covered Locations. Your "dwelling" and personal property are covered while the property is located: 1. At the property address shown on the "application" or endorsement, if corrected by endorsement; and 2. For 45 days, at another place above ground level or outside of the "special hazard area," to which any of the insured property shall necessarily be removed by you in order to protect and preserve it from "flood," due to the imminent danger of "flood" (provided, personal property so removed must be placed in a fully enclosed "building" or otherwise reasonably protected from the elements to be insured against loss), in which case the reasonable expenses incurred by you, including the value of your own labor and the labor of members of your household at prevailing Federal minimum wage rates, in moving any of your insured property temporarily away from the peril of "flood" shall be reimbursed to you in an amount not to exceed $1,000. This "policy’s" deductible amounts, as provided for at Article 7, shall not be applied to this reimbursement.

C. Insured Property, Covered Locations. In addition to covering the insured property at the described location, the National Flood Insurance Program also covers the property, for up to 45 days, at any other place above ground level, or outside the special flood hazard area, to which the property is necessarily removed to protect it from flood, provided the personal property removed is reasonably protected from the elements. Reasonable expenses incurred by the insured in removing and storing the property are reimbursable under the policy. The property must be facing the current threat of a flood. An insured may have a maximum of $1,000 of any moving expenses reimbursed and the policy’s deductible does not apply to this additional coverage. This includes the value of the named insured’s own labor at the prevailing minimum wage. Both the expenses reimbursement and the fact that the deductible does not apply, encourages insureds to try to remove their property from harm.

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D. Coverage For Certain Loss Mitigation Measures. When the insurance under this "policy" covers a "building," reasonable expenses incurred by you for the purchase of the following items are also covered, in an aggregate amount not to exceed $1,000: 1. Sandbags, including sand to fill them and plastic sheeting and lumber used in connection with them; 2.

Fill for temporary levees;

3.

Pumps; and

4.

Wood;

All for the purpose of saving the "building" due to the imminent danger of a "flood" loss, including the value of your own labor and the labor of members of your household at prevailing Federal minimum wage rates. The "policy’s" "building" deductible amount, as provided for at Article 7, shall not be applied to this reimbursement. For reimbursement under this paragraph D. to apply, the following conditions must be met: a.

The insured property must be in imminent danger of sustaining "flood" damage; and

b. The threat of "flood" damage must be of such imminence as to lead a person of common prudence to apprehend "flood" damage; and c. A general and temporary condition of flooding in the area must occur, even if the flooding does not reach the insured property, or a legally authorized official must issue an evacuation order or other civil order for the community in which the insured property is located calling for measures to preserve life and property from the peril of "flood."

D. Coverage For Certain Loss Mitigation Measures Expense for loss mitigation measures is covered, so long as the covered building is in imminent danger of a flood. Specifically an insured is reimbursed for purchasing:    

Fill for temporary levees, Wood, Pumps, and Sandbags, including sand to fill them and plastic sheeting and lumber used in connection with them.

However, the following conditions apply:

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   

The covered building is in definite peril of being damaged by flood The flood threat is great enough that a reasonable person would begin property preservation measures and Either a flood occurs (even if flood waters don’t actually reach the covered property) or A valid authority issued orders to evacuate or to protect life and property against flood loss.

The total amount of coverage available under part D is $1,000 and it applies to both the cost of materials as well as the cost of labor (including the insured’s work) at the current Federal Minimum Wage. No deductible applies. ARTICLE 6 - PROPERTY NOT COVERED This article clarifies some types of property and situations which are not eligible as covered property.

ARTICLE 6 -- PROPERTY NOT COVERED We do not cover any of the following: A.

Valuables and commercial property, meaning:

1. Accounts, bills, currency, deeds, evidences of debt, money, coins, medals, postage stamps, securities, bullion, manuscripts, other valuable papers or records, and personal property used in a business. 2. Personal property used in connection with any incidental commercial occupancy or use of the "building."

That there is no coverage for "valuables": deeds, currency, money, coins, etc., or for any personal property used in a business. Coverage is more restrictive than homeowner’s forms, which provide limited coverage for personal property used in a business. A. Valuables and commercial property, meaning: 1. Accounts, bills, currency, deeds, evidences of debt, money coins, medals, postage stamps, securities, bullion, manuscripts, other valuable papers or records, and personal property used in a business. 2. Personal property used in connection with any incidental commercial occupancy or use of the building.

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B.

Property over water or in the open, meaning:

1. A "building" and personal property in the "building" located entirely in, on, or over water or seaward of mean high tide, if the "building" was newly constructed or substantially improved on or after October 1, 1982. 2.

Personal property in the open.

B. Property over water or in the open, meaning: Beachfront property may not qualify for coverage depending upon when it was built, or depending upon the tide. However, part of a building, such as an upper story deck connected to a home near water, may qualify for coverage. Personal property in the open is not covered. If the property is not in a building, it isn’t covered. This property is very vulnerable to loss and is also highly portable. An insured should be encouraged to protect the property by moving it into a fully enclosed building. Depending upon circumstances, moving this property may also qualify for expense reimbursement under Article 5, part C.

C.

Structures other than buildings, including:

1.

Fences, retaining walls, seawalls, bulkheads, wharves, piers, bridges, and docks.

2.

Indoor and outdoor swimming pools.

3. Open structures and personal property located in, on, or over water, including boat houses or any structure or "building" into which boats are floated. 4.

Underground structures and equipment, including wells, septic tanks and septic systems.

C. Structures other than buildings, including: Many structures that commonly accompany homes do not qualify for coverage against flood damage. Most of the excluded structures are highly likely to experience loss from the flood peril. 1. Fences, retaining walls, seawalls, bulkheads, wharves, piers, bridges and docks. 2. Indoor and outdoor swimming pools.

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3. Open structures and personal property located in, on, or over water, including boat houses or any structure or building into which boats are floated. 4. Underground structures and equipment, including wells, septic tanks, and septic systems.

D.

Other real property, including:

1.

Land, land values, lawns, trees, shrubs, plants, and growing crops.

2. Those portions of walks, walkways, decks, driveways, patios, and other surfaces, all whether covered or not and all of whatever kind of construction, located outside the perimeter, exterior walls of the insured "building" or "unit."

D. Other real property, including: 1. Land, land values, lawns, trees, shrubs, plants, and growing crops. 2. Those portions of walks, walkways, deck driveways, patios, and other surfaces, all whether covered or not and all of whatever kind of construction, located outside the perimeter exterior walls of the insured building or unit.

E.

Other personal property, meaning:

1.

Animals, livestock, birds, and fish.

2.

Aircraft.

3. Any self-propelled vehicle or machine and motor vehicle (other than motorized equipment pertaining to the service of the described "unit" or "building," operated principally on your premises, and not licensed for highway use) including their parts and equipment. 4. Trailers on wheels and other recreational vehicles whether affixed to a permanent foundation or on wheels. 5.

Watercraft including their furnishings and equipment.

E. Other personal property including: 1. Animals, livestock, birds and fish

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An insured must go to a livestock or specialty form for covering animals or pets. 2. Aircraft 3. Any self-propelled vehicle or machine and motor vehicle (other than motorized equipment pertaining to the service of the described unit or building, operated principally on your premises, and not licensed for highway use) including their parts and equipment. 4. Trailers on wheels and other recreational vehicles whether affixed to a permanent foundation or on wheels 5. Watercraft including their furnishings and equipment. Items 2. through 5. are property that are not incidental to a structure used as a residence. They are also subject to other types of policies, some of which do offer coverage against flood. Also, such property is easily removed from the flood peril.

F. Basements, building enclosures lower than the elevated floors of elevated buildings, and personal property, as follows: 1. In a "special hazard area," at an elevation lower than the lowest elevated floor of an "elevated Post-FIRM building," including a "manufactured" (i.e., "mobile") home: a.

Personal property.

b. "Building" enclosures, equipment, machinery, fixtures and components, except for the required utility connections and the footings, foundation, posts, pilings, piers or other foundation walls and anchorage system as required for the support of the "building." 2.

In a basement as defined in Article 2:

a.

Personal property.

b. "Building" equipment, machinery, fixtures and components, including finished walls, floors, ceilings and other "improvements," except for the required utility connections, fiberglass insulation, drywalls and sheetrock walls, and ceilings but only to the extent of replacing drywalls and sheetrock walls in an unfinished manner (i.e., nailed to framing but not taped, painted, or covered). 3. Provided, with regard to both 1 . and 2., except for the case of a "dwelling unit" in a "condominium building" as to which the "Association’s" coverage is sufficient to cover such property, the following "building" and personal property items connected to a power source and installed in their functioning location are covered so long as you have purchased building and personal property coverage, as appropriate: ·

Sump pumps

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·

Well water tanks and pumps

·

Oil tanks and the oil in them

·

Cisterns and the water in them

·

Natural gas tanks and the gas in them

·

Pumps and or tanks used in conjunction with solar energy

·

Furnaces

·

Hot water heaters

·

Clothes washers and dryers

·

Food freezers and the food in them

·

Air conditioners

·

Heat pumps

·

Electrical junction and circuit breaker boxes

·

Clean-up

· Stairways and staircases attached to the "building" which are not separated from the "building" by elevated walkways · Elevators, dumbwaiters, and relevant equipment, except for such relevant equipment located below the "base flood" elevation if such relevant equipment was installed on or after October 1, 1987.

F. Basements, building enclosures lower than the elevated floors of elevated buildings, and personal property, as follows: 1. In a special hazard area, at an elevation lower than the lowest elevated floor of an elevated Post-FlRM building, including a manufactured (i.e., mobile) home: a. Personal property. b. Building enclosures, equipment, machinery, fixtures and components, except for the required utility connections and the footings, foundation, posts, pilings, piers or other foundation walls and anchorage systems as required for the support of the building. 2. In a basement as defined in Article 2:

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a. Personal property. b. Building equipment, machinery, fixtures and components, including finished walls, floors, ceilings and other improvements, except for the required utility connections, fiberglass insulation, drywalls and sheetrock walls, and ceilings, but only to the extent of replacing drywalls and sheetrock walls in an unfinished manner (i.e. nailed to framing but not taped, painted, or covered). The list of property not covered by the flood policy is extensive, and reinforces the idea that flood mitigation procedures must be in place. The flood policy will not provide coverage when building elevation codes have not been followed. Excluded from coverage are enclosures, contents, machinery, building components, equipment, and fixtures located below the lowest elevated floor of an elevated building, including a mobile home; and finished basement walls, floors, ceilings, and other improvements to a basement whose floor is subgrade on all sides; and contents, machinery, building equipment, and fixtures in such basement areas. Whether an insured dwelling has a basement or not, it is unlikely that there will be any significant coverage for flood damage that occurs to a building’s portion that is located below ground level. An important item that characterizes what is covered in a building’s lowest level is the insured’s control over the property. The limited coverage available is restricted to types of property over which an insured has little or no control, such as components that support the upper levels of the home and utility lines and hook-ups. However; there is no coverage for items over which an insured exercises a great deal of control, such as "finishing features" that convert a basement into a comfortable living area: soundproofing, paneling, additional plumbing, bookshelves, etc. The flood policy does make exception and covers certain property located on the lowest level. But the items tend to be functional and utilitarian rather than items that facilitate "finished" occupancy. 3. Except for the case of a dwelling unit in a condominium building for which the Association's coverage is sufficient to cover such property. The following building and personal property items connected to a power source and installed in their functioning location are covered:               

Sump pumps Well water tanks and pumps Oil tanks and the oil in them Cisterns and the water in them Natural gas tanks and the gas in them Pumps and/or tanks used in conjunction with solar energy Furnaces Hot water heaters Clothes washers and dryers Food freezers and the food in them Air conditioners Heat pumps Electrical junction and circuit breaker boxes Clean-up Stairways and staircases attached to the building which are not separated from the building by elevated walkways

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

Elevators, dumbwaiters, and relevant equipment, except for such relevant equipment located below the base flood elevation if such relevant equipment was installed on or after October 1, 1987.

This property must be "up and running" in its intended location to qualify for coverage. However, with respect to buildings whose construction or substantial improvement started before October 1, 1982, there is coverage for the following types of property in basements and in areas below the lowest elevated floor of an elevated building: sump pumps, well-water tanks, oil tanks, furnaces, hot water heaters, clothes washers and dryers, food freezers, air conditioners, heat pumps, and electrical junction and circuit breaker boxes. And, the exclusions do not apply to stairways and staircases attached to the building that are not separated from the building by elevated walkways, nor to required utility connections and the footings, foundation, posts, pilings, piers, or other foundation walls and anchorage system required for the support of the elevated building. Certain building and personal property items are covered so long as they are connected to a power source and installed in their functioning location, and the insured has purchased building and personal property coverage. Among these are clothes washers and dryers, food freezers and the food in them, cisterns and the water in them, and oil tanks and the oil in them. G. Property below ground, meaning a "building" or "unit" and its contents, including personal property and machinery and equipment, which are part of the "building" or "unit," where more than 49% of the "actual cash value" of such "building" or "unit" is below ground, unless the lowest level is at or above the "base flood elevation" (in the Regular Program) or the adjacent ground level (in the Emergency Program) by reason of earth having been used as an insulation material in conjunction with energy efficient building techniques.

G. Property below ground, meaning a building or unit and its contents, including personal property and machinery and equipment. Underground homes or structures, including contents, are not covered by the dwelling policy if slightly half or more of the structure’s actual cash value is located below the base flood elevation or the adjacent ground level, depending upon whether the home is part of the Regular or Emergency Flood Program. This exclusion does not apply in instances where a home has used earth in an approved manner for insulation. If the structure’s features cause it to fail to qualify for coverage, then all of the accompany structures and contents are ineligible.

H. Certain manufactured homes, meaning a manufactured (i.e., mobile) home located or placed within a FEMA designated "Special Hazard Area" that is not anchored to a permanent foundation to resist flotation, collapse, or lateral movement: 1.

By over-the-top or frame ties to ground anchors; or

2.

In accordance with manufacturer’s specifications; or

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3.

In compliance with the community’s floodplain management requirements;

Unless it is a "manufactured" (i.e., "mobile home" on a permanent foundation continuously insured by the "National Flood Insurance Program" at the same site at least since September 30, 1982.

H. Certain Manufactured Homes Factory built and mobile homes may qualify for coverage under a dwelling flood policy if the manufactured home is properly anchored or secured to reduce its vulnerability to floating away, being upset, shifting, or collapsing during a flood. Structures that are anchored by the proper method or according to the home’s manufacturer, or are stabilized in a manner that complies with the community’s requirements may be covered by a flood policy. An unanchored manufactured or mobile homes located within a "special hazard area" is not covered, unless it has been on a permanent foundation and continuously insured by the NFIP at the same site since September 30, 1982. I.

Containers such as but not limited to gas tanks or liquid tanks.

I. Containers Another ineligible item is a tank for storing gas or other liquids. Of course this exclusion refers to containers that are located outside of an eligible enclosed building. J. Buildings and their contents made ineligible for "flood" insurance pursuant to the provisions of the Coastal Barrier Resources Act, 16.U.S.C. 3501 et seq., and the Coastal Barrier Improvement Act of 1990, Pub. L. 101-591, 16 U.S.C. 3501 et seq.

J. Buildings and their contents made ineligible for flood insurance pursuant to the provisions of the Coastal Barrier Resources Act. ARTICLE 7 - DEDUCTIBLES

ARTICLE 7 -- DEDUCTIBLES A. Each loss to your insured property is subject to a deductible provision under which you bear a portion of the loss before payment is made under the "policy." B. The loss deductible shall apply separately to each "building" and personal property loss including, as to each, any appurtenant structure loss and debris removal expense.

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C. For any "flood" insurance "policy" issued or renewed for a property located in an "Emergency Program community" or for any property located in a "Regular Program community" in Zones A, AD, AH, A1-30, AE, VO, V1-30, VE, or V where the rates available for "buildings" built before the effective date of the initial Flood Insurance Rate Map or December 31, 1974, whichever is later, are used to compute the premium, the amount of the deductible for each loss occurrence is determined as follows: We shall be liable only when such loss exceeds the deductible which you selected when you applied for this "policy" or subsequently by endorsement. D. For policies other than those described in paragraph C. above, the amount of the deductible for each loss occurrence is determined as follows: we shall be liable only when such loss exceeds the deductible which you selected when you applied for this "policy" or subsequently by endorsement. E. Notwithstanding the applicable deductible in paragraphs C. or D. above, an additional deductible shall apply separately to each "building" and contents loss before payment is made under the "policy" for land subsidence, sewer backup, or seepage of water as provided for in Article 3, paragraph B.3.

Every loss is subject to a deductible which applies to each loss involving the following:    

A covered building Appurtenant structure Debris removal Personal property.

The deductible depends upon whether the:  

Property is located in the Emergency Program Risk is in the Regular Program and in Zone A, AO, AH, A1-30, AE, AR, AR/AE, AR/AH, AR/AO, AR/A1-30, AR/A, VO, V1-30, VE, or V and the rates are based on the rates used for buildings built before the locale’s initial Flood Insurance Rate Map or December 31, 1974 (whichever is later).

The dwelling flood policy is subject to a standard deductible that applies separately to building and contents losses, including related debris removal expense. A higher deductible applies to losses occurring to property in an Emergency Program community or to property located in preFIRM special flood hazard areas. Separate deductibles may be written for building and contents. An additional, separate deductible applies to building and contents losses caused by land subsidence, sewer back-up, or seepage of water when caused by a general condition of flooding.

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An additional deductible is also applied to any loss involving land subsidence, sewer backup or water seepage, if the loss was eligible for coverage under paragraph B. 3. under Article 3 Losses Not Covered. ARTICLE 8 - REPLACEMENT COST PROVISIONS

ARTICLE 8 -- REPLACEMENT COST PROVISIONS Subject to Article 7 and the limits of "building" coverage you have purchased, these provisions shall apply only to a single family "dwelling" which is your principal residence and which is covered under this "policy." For purposes of this Article 8, a single family "dwelling" qualifies as your principal residence provided that, at the time of the loss, you or your spouse have lived in your "building" for either: 1.

80% of the calendar year immediately preceding the loss; or

2. 80% of the period of your ownership of the insured "building," if less than one calendar year immediately preceded the loss. The following are excluded from replacement cost coverage: 1. A "unit," in a "condominium building," not used exclusively for single-family "dwelling" purposes. 2. Outdoor antennas and aerials, awnings, and other outdoor equipment, all whether attached to the "building" or not. 3.

Carpeting.

4.

Appliances.

Under the dwelling policy, replacement cost only applies to residences that are designed and used by a single family as a principle residence; a single family home or a single condominium unit. The next point that must be understood is that the dwelling must be a principal residence. Immediately before a flood loss, either the insured or the insured’s spouse must have lived in the building 80% of the: 1. Calendar year immediately preceding the loss; or 2. Period of your ownership of the insured building, if less than one calendar year, immediately preceding the loss. The only instance in which flood insurance may be written on a replacement cost basis is with respect to a single family dwelling that is the insured’s principal residence. In all other cases,

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coverage on an actual cash value basis is mandatory. A dwelling qualifies as the insured’s principal residence if the named insured or his spouse has lived there for either (1) 80% of the calendar year immediately preceding the loss or (2) 80% of the named insured’s ownership of the building, if the named insured owned the building for less than the calendar year preceding the loss. Several situations are specifically excluded from loss settlement on a replacement cost basis: 1. A unit, in a condominium building, not used exclusively for single-family dwelling purposes. 2. Outdoor antennas and aerials, awnings, and other outdoor equipment, all whether attached to the building or not. 3. Carpeting. 4. Appliances. The replacement cost provisions of the dwelling form apply only to the insured dwelling building: appurtenant building structures and personal property that are otherwise covered under the policy are not eligible. The provisions also do not apply to outdoor antennas and aerials, carpeting, awnings, appliances, and outdoor equipment, even if part of the dwelling. Under this Article: A. If at the time of loss the total amount of insurance applicable to the "dwelling" is 80% or more of the full replacement cost of such "dwelling," or is the maximum amount of insurance available under the "National Flood Insurance Program," the coverage of this "policy" applicable to the "dwelling" is extended to include the full cost of repair or replacement (without deduction for depreciation).

Losses will be adjusted on a full replacement cost basis (subject to the limit of liability or the cost to repair or replace, whichever is less) if at the time of loss the total amount of insurance on the dwelling is 80% or more of the dwelling’s full replacement cost or is the maximum amount of coverage available under the NFIP.

B. If at the time of loss the total amount of insurance applicable to the "dwelling" is less than 80% of the full replacement cost of such "dwelling" and less than the maximum amount of insurance available under the "National Flood Insurance Program," our liability for loss shall not exceed the larger of the following amounts: 1. The "actual cash value" (meaning replacement cost less depreciation) of that part of the "dwelling" damaged or destroyed; or 2. That portion of the full cost of repair or replacement without deduction for depreciation of that part of the "dwelling" damaged or destroyed, which the total amount of insurance applicable to the "dwelling" bears to 80% of the full replacement cost of such "dwelling."

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If 80% of the full replacement cost of such "dwelling" is greater than the maximum amount of insurance available under the "National Flood Insurance Program," use the maximum amount in lieu of the 80% figure in the application of this limit.

If an insured does not protect his dwelling for 80% of full replacement cost or for the maximum available amount of coverage, a loss settlement is based on:  

An actual cash value basis or The percentage of the cost to repair or replace the damaged property that is computed by comparing the actual amount of coverage to the required amount.

Coverage would be whichever the greater amount is.

C. Our liability for loss under this policy shall not exceed the smallest of the following amounts: 1. The limit of liability of this policy applicable to the damaged or destroyed "building"; or 2. The replacement cost of the "dwelling" or any part thereof identical with such "dwelling" on the same premises and intended for the same occupancy and use; or 3. The amount actually and necessarily expended in repairing or replacing said "dwelling" or any part thereof intended for the same occupancy and use.

When a loss is eligible for settlement on a full replacement cost basis, the insurer still has the option to handle the loss according to the least expensive method. The insurer’s obligation to pay for a loss is limited to the least expensive among the following options:   

The limit of liability of this policy applicable to the damaged or destroyed building; or The replacement cost of the dwelling or any part thereof identical with such dwelling on the same premises and intended for the same occupancy and use; or The amount actually and necessarily expended in repairing or replacing said dwelling or any part thereof intended for the same occupancy and use.

D. When the full cost of repair or replacement is more than $1,000 or more than 5% of the whole amount of insurance applicable to said "dwelling," we shall not be liable for any loss under paragraph A. or subparagraph B.2. of these provisions unless and until actual repair or replacement is completed.

Insurers want to make sure that the covered property is preserved. If a loss is greater than either $1,000 or 5% of the applicable dwelling limit, no payment is made unless the damaged property is repaired or replaced.

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If the cost to repair or replace damage following a covered loss exceeds $1,000 or more than 5% of the whole amount of insurance applicable to the dwelling, the insurer will not reimburse full repair or replacement cost until all repairs or replacement are completed. E. In determining if the whole amount of insurance applicable to said "dwelling" is 80% or more of the full replacement cost of such "dwelling," the cost of excavations, underground flues and pipes, underground wiring and drains, and brick, stone and concrete foundations, piers and other supports which are below the under surface of the lowest "basement" floor, or where there is no "basement," which are below the surface of the ground inside the foundation walls, shall be disregarded. The determination of full insurance to value for a dwelling parallels those found in standard homeowners forms in that the cost of excavations, foundations, piers and supports below the lowest basement floor, etc., may be disregarded. When determining if a home’s full replacement cost complies with the required 80% of replacement cost, a home’s value does not include the following when located under the basement floor or under the ground within a dwelling’s foundation walls:      

The cost of excavations, Underground flues and pipes, Underground wiring and drains, Brick, stone and concrete foundations, Piers and Other supports.

F. You may elect to disregard this condition in making claim hereunder, but such election shall not prejudice your right to make further claim within 180 days after loss for any additional liability brought about by these provisions.

An insured has some flexibility regarding losses. They can have a loss adjusted on the basis of the damage’s actual cash value, then within 180 days from the loss date they can make an additional claim (on the basis of replacement cost value).

G. These Replacement Cost Provisions do not apply to any "manufactured" (i.e., "mobile") home which when assembled is not at least 16 feet wide or does not have an area within its perimeter walls of at least 600 square feet or personal property (contents) covered under this "policy," nor do they apply to any loss where insured property is abandoned and remains as debris at the property address following a loss.

The replacement cost provisions do not apply to a manufactured or mobile home unless it is at least 16 feet wide or contains at least 600 square feet of living space. Very small manufactured homes can only be adjusted on an actual cash value basis.

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Personal property is also settled on an actual cash value basis. This article’s provisions do not apply to any insured property that is abandoned on the insured’s property described on the declarations page.

H. If your "dwelling" sustains a total loss or if we should pay you the entire "building" loss proceeds under these Replacement Cost Provisions, there is no requirement that you rebuild the "building" at the insured property address.

If the dwelling sustains a total loss or if the total building amount is paid, there is no requirement the insured rebuild in the same location. In other parts of the policy, however, there are provisions that make it the insured’s responsibility to be accountable for any increased costs.

I. If the community in which your property is located has been converted from the Emergency Program to the Regular Program during the current "policy" term, then these Replacement Cost Provisions shall be applied based on the maximum amount of insurance available under the "National Flood Insurance Program" at the beginning of the current "policy" term instead of at the time of loss.

The replacement cost provisions is unaffected if a community has been upgraded from the Emergency Flood Program to the Regular Flood Program during the policy term. ARTICLE 9 - GENERAL CONDITIONS AND PROVISIONS This article contains items that, generally, affect the entire policy. concern either coverage or contractual issues.

For the most part, they

ARTICLE 9 -- GENERAL CONDITIONS AND PROVISIONS A. Pair and Set Clause: If you lose an article which is part of a pair or set, we will have the option of paying you an amount equal to the cost of replacing the lost article, less depreciation, or an amount which represents the fair proportion of the total value of the pair or set that the lost article bears to the pair or set.

The insurer may elect to pay an amount equal to the lost property, less depreciation, or an amount representing the "fair proportion" the lost article bears to the total pair or set. This provision gives an insurer the flexibility to settle the loss while considering the fact that a piece is part of a pair or set. The insurer is not obligated, however, to automatically settle such losses on the basis of the full value of the pair or set.

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B. Concealment, Fraud: We will not cover you under this "policy," which shall be void, nor can this "policy" be renewed or any new "flood" insurance coverage be issued to you if: 1.

You have sworn falsely, or willfully concealed or misrepresented any material fact; or

2. or

You have done any fraudulent act concerning this insurance (see paragraph FAA. below);

3. You have willfully concealed or misrepresented any fact on a "Recertification Questionnaire," which causes us to issue a "policy" to you based on a premium amount which is less than the premium amount which would have been payable by you were it not for the misstatement of fact (see paragraph G. below). It is vital the above provisions be explained clearly to all flood insureds, for they are much more stringent than those of the homeowner’s forms. The homeowners provision states that under section I - property coverages, no coverage will be provided for loss if one or more insureds have engaged in fraud, concealment, material misrepresentation or making false statements. In the case of the flood policy, however, the entire policy becomes void. The insured will be unable to renew or to purchase new flood insurance. The policy may be voided if it has been misrated, and a lower premium charged because of the misrating. Most companies will not normally void a homeowner’s policy for misrating.

Insurance policies are contracts. The insurer is highly dependent upon an applicant for accurate information on the application. The NFIP even makes the application a legal part of the insurance contract. An applicant who either hides or lies about information that is material to the insurer’s decision to accept or properly rate a flood policy, faces the prospect of their coverage being voided, even at the time of a loss.

C. Other Insurance. If a loss covered by this "policy" is also covered by other insurance whether collectible or not, except insurance in the name of the "Condominium Association" issued pursuant to the "Act," we will pay only the proportion of the loss that the limit of liability that applies under this "policy" bears to the total amount of insurance covering the loss. If there is other insurance in the name of the "Condominium Association" covering the same property covered by this "policy," this insurance shall be excess over the other insurance. The Flood Insurance Manual states that the wording of this provision in the dwelling policy is wrong. The intent is for the dwelling form to be primary with regard to other flood insurance.

If there is other insurance in the name of the Condominium Association covering the same property covered by this policy, this insurance shall be excess over the other insurance. This provision is meant to take the existence of other sources of coverage into consideration. This protects the flood program’s capacity by restricting it to only its share of coverage in an eligible loss. The provision is triggered regardless of another source of coverage’s collectability.

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The amount of coverage under the flood policy would contribute on a proportional basis even if coverage from another source can’t be collected. The flood policy will pay its share of the entire amount of insurance that applies to a loss. When another source of protection is uncollectible, then the flood insurance is the only available protection.

D. Amendments, Waivers, Assignment: This "policy" cannot be amended nor can any of its provisions be waived without the express written consent of the Federal Insurance Administrator. No action we take under the terms of this "policy" can constitute a waiver of any of our rights. Except in the case of 1. a contents only "policy," and 2. a "policy" issued to cover a "building" in the course of construction, assignment of this "policy," in writing, is allowed upon transfer of title. Most standard homeowner’s policies cannot be assigned without the insurer’s consent. The flood policy may be transferred to a buyer when title to the property is transferred, except in the two cases above. This condition specifies that changes aren’t valid unless the "insurer" agrees to it in writing. The condition makes a blanket exception for contents-only policies and for homes that are being built; in which case the insured may assign the policy to the property’s new owner.

E.

Cancellation of Policy By You:

You may cancel this "policy" at any time but a refund of premium money will only be made to you when: 1. You cancel because you have transferred ownership of the described "building" or "unit" to someone else. In this case, we will refund to you, once we receive your written request for cancellation (signed by you), the excess of premiums paid by you, which apply to the unused portion of the "policy’s" term, pro rata but with retention of the "expense constant" and the "Federal policy fee." 2. You cancel a "policy" having a term of 3 years, on an anniversary date, and the reason for the cancellation is: a. A "policy" of "flood" insurance has been obtained or is being obtained in substitution for this "policy" and we have received a written concurrence in the "cancellation" from any mortgagee of which we have actual notice; or b. You have extinguished the insured mortgage debt and are no longer required by the mortgagee to maintain the coverage. Refund of any premium, under this subparagraph 2., shall be pro rata but with retention of the "expense constant" and the "Federal policy fee."

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3. You cancel because we have determined that your property is not, in fact, in a "special hazard area"; and you were required to purchase "flood" insurance coverage by a private lender or Federal agency pursuant to the "Act"; and the lender or Federal agency no longer requires the retention by you of the coverage. In this event, if no claims have been paid or are pending, your premium payments will be refunded to you in full, according to our applicable regulations. The flood policy may be cancelled by the insured at any time, but a refund will result only under certain conditions. Even if a refund of premium is made, the expense constant and Federal policy fee are never refunded.

An insured under the dwelling flood policy may choose any time to cancel his or her coverage, however, an insured can only get a premium refund under the following circumstances: 

If the covered property now belongs to another party. The insured is entitled to any unearned premium, less the NFIP expense constant and Federal policy fee. An insured is given a short rate cancellation. It would be preferable to have the policy assigned to a new owner and have them pay the remaining term’s premium to the previous owner.



An insured can cancel Three-Year term policies at their anniversaries if the cancellation involves any of the following:

o o



F.

A substitute flood insurance policy that replaces the policy that’s being cancelled The insured has paid off the mortgage debt and isn’t required to maintain the coverage. A premium refund in this circumstance is prorated minus the expense constant and the Federal policy fee.

The insured may cancel a policy if the property turns out not to be in a special hazard area and the flood insurance was purchased because of a lender’s mandate. In this case, if there aren’t any paid or pending claims; all premium payments are fully refunded.

Voidance, Reduction or Reformation of the Coverage By Us:

1. Voidance: This "policy" shall be void and of no legal force and effect in the event that any one of the following conditions occurs: a. The property listed on the "application" is not eligible for coverage, in which case the "policy" is void from its inception; b. The community in which the property is located was not participating in the "National Flood Insurance Program" on the "policy’s" inception date and did not qualify as a participating community during the "policy’s" term and before the occurrence of any loss for which you may receive compensation under the "policy";

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c. If, during the term of the "policy", the participation in the "National Flood Insurance Program" of the community in which your property is located ceases, in which case the "policy" shall be deemed void effective at the end of the last day of the "policy" year in which such cessation occurred and shall not be renewed. In the event the voided "policy" included 3 "policy" years in a contract term of 3 years, you shall be entitled to a pro rata refund of any premium applicable to the remainder of the "policy’s" term; d. (1)

In the event you or your agent have: sworn falsely, or

(2) fraudulently or willfully concealed or misrepresented any material fact including facts relevant to the rating of this "policy" in the "application" for coverage, or upon any renewal of coverage, or in connection with the submission of any claim brought under the "policy," in which case this entire "policy" shall be void as of the date the wrongful act was committed or from its inception if this "policy" is a renewal "policy" and the wrongful act occurred in connection with an "application" for or renewal or endorsement of a "policy" issued to you in a prior year and affects the rating of or premium amount received for this "policy." Refunds of premiums, if any, shall be subject to offsets for our administrative expenses (including the payment of agent’s commissions for any voided "policy" year) in connection with the issuance of the "policy"; e. The premium you submit is less than the minimum set forth in 44 CFR 61.10 in connection with any "application" for a new "policy" or "policy" renewal, in which case the "policy" is void from its inception date. 2. Reduction of Coverage Limits or Reformation: In the event that the premium payment received by us is not sufficient (whether evident or not) to purchase the amount of coverage requested by an "application," renewal, endorsement, or other form and paragraph F. 1 A. does not apply, then the "policy" shall be deemed to provide only such coverage as can be purchased for the entire term of the "policy," for the amount of premium received, subject to increasing the amount of coverage pursuant to 44 CFR 61.11; provided, however: a. If the insufficient premium is discovered by us prior to a loss and we can determine the amount of insufficient premium from information in our possession at the time of our discovery of the insufficient premium, we shall give a notice of additional premium due, and if you remit and we receive the additional premium required to purchase the limits of coverage for each kind of coverage as was initially requested by you within 30 days from the date we give you written notice of additional premium due, the "policy" shall be reformed, from its inception date, or, in the case of an endorsement, from the effective date of the endorsement, to provide "flood" insurance coverage in the amount of coverage initially requested. b. If the insufficient premium is discovered by us at the time of a loss under the "policy," we shall give a notice of premium due, and if you remit and we receive the additional premium required to purchase (for the current "policy" term and the previous "policy" term, if then insured) the limits of coverage for each kind of coverage as was initially requested by you within 30 days from the date we give you written notice of additional premium due, the "policy" shall be

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reformed, from its inception date, or, in the case of an endorsement, from the effective date of the endorsement, to provide "flood" insurance coverage in the amount of coverage initially requested. c. Under subparagraphs a. and b. as to any mortgagee or trustee named in the "policy," we shall give a notice of additional premium due and the right of reformation shall continue in force for the benefit only of the mortgagee or trustee, up to the amount of your indebtedness, for 30 days after written notice to the mortgagee or trustee.

F. Voidance, Reduction, or Reformation of the Coverage By Us - this condition explains some of the insurer’s options that affect coverage under the dwelling policy. A policy will be void if the property is not eligible for coverage, or is located in a community that does not participate in the flood insurance program. Less premium than the minimum set forth in the Federal Register sent with an application or with a renewal will void the policy from inception. However, if the premium is above the minimum, but still insufficient to purchase the amount of coverage requested, then the amount of coverage that the premium sent would purchase is the amount the policy is deemed to provide. For these reasons, rating must be done carefully and thoroughly. However, if the premium shortage (not less than the allowable minimum) is discovered prior to a loss, and the insured pays the additional premium, the initially requested coverage will be provided. The policy may also be reformed to provide the requested coverage at the time of a loss if the additional premium is promptly paid (within 30 days of notice being sent). When the application is accompanied by an inadequate premium, the coverage is kept in force in the amount of coverage supported by the lower premium amount. If the insufficient premium is discovered before a loss, the additional premium billing is for the current policy term or, if applicable, the full endorsement term. If the insufficient premium is discovered after a loss, the additional premium billing is for the current policy term as well as (when applicable) the previous policy term or, if applicable, the full endorsement term. An additional financial interest in the flood policy, such as a mortgagee or trustee, also receives a 30-day notice of the additional premium due. The right to reforming coverage for the additional interest is limited to increasing the coverage to meet the total amount of indebtedness rather than the original amount requested. If the insufficient premium was due to the insurer finding out a material misrepresentation or concealment that affects the policy coverage, the policy is subject to voidance of coverage.

G. Policy Renewal: The term of this "policy" commences on its inception date and ends on its "expiration date," as shown on the "declarations page" which is attached to the "policy." We are under no obligation to:

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1. Send you any renewal notice or other notice that your "policy" term is coming to an end and the receipt of any such notice by you shall not be deemed to be a waiver of this provision on our part. 2. Assure that "policy" changes reflected in endorsements submitted by you during the "policy" term and accepted by us are included in any renewal notice or new "policy" which we send to you. "Policy changes" includes the addition of any increases in the amounts of coverage. This "policy" shall not be renewed and the coverage provided by it shall not continue into any successive "policy" term unless the renewal premium payment is received by us at the office of the "National Flood Insurance Program" within 30 days of the "expiration date" of this "policy," subject to Article 9, paragraph F. above. If the renewal premium payment is mailed by certified mail to the "National Flood Insurance Program" prior to the "expiration date," it shall be deemed to have been received within the required 30 days. The coverage provided by the renewal "policy" is in effect for any loss occurring during this 30-day period even if the loss occurs before the renewal premium payment is received, so long as the renewal premium payment is received within the required 30 days. In all other cases, this "policy" shall terminate as of the "expiration date" of the last "policy" term for which the premium payment was timely received at the office of the "National Flood Insurance Program" and, in that event, we shall not be obligated to provide you with any "cancellation," termination, policy lapse, or "policy" renewal notice. In connection with the renewal of this "policy," you may be requested during the "policy" term to recertify, on a Recertification Questionnaire we will provide you, the rating information used to rate your most recent "application" for or renewal of insurance. Notwithstanding your responsibility to submit the appropriate renewal premium in sufficient time to permit its receipt by us prior to the expiration of the "policy" being renewed, we have established a business procedure for mailing renewal notices to assist Insureds in meeting their responsibility. Regarding our business procedure, evidence of the placing of any such notices into the U.S. Postal Service, addressed to you at the address appearing on your most recent "application" or other appropriate form (received by the "National Flood Insurance Program" prior to the mailing of the renewal notice by us), does, in all respects for purposes of the "National Flood Insurance Program," presumptively establish delivery to you for all purposes irrespective of whether you actually received the notice. However, in the event we determine that, through any circumstances, any renewal notice was not placed into the U.S. Postal Service, or, if placed, was prepared or addressed in a manner which we determine could preclude the likelihood of its being actually and timely received by you prior to the due date for the renewal premium, the following procedures shall be followed: In the event that you or your agent notified us, not later than 1 year after the date on which the payment of the renewal was due, of a nonreceipt of a renewal notice prior to the due date for the renewal premium, which we determine was attributable to the above circumstance, we shall mail a second bill providing a revised due date, which shall be 30 days after the date on which the bill is mailed. If the renewal payment requested by reason of the second bill is not received by the revised due date, no renewal shall occur and the "policy" shall remain as an expired "policy" as of the expiration date prescribed on the "policy."

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This condition tells an insured that he or she has to take the bulk of responsibility for keeping the flood insurance in force and to pay careful attention to the policy effective dates that appear on the policy declarations page.   

The insured has to pay the renewal premium within 30 days of the policy expiration date or coverage ends as of the policy’s expiration date. If, within the 30-day period, an insured sends a renewal payment by certified mail, the mailing date will be honored if the payment’s actual receipt is beyond 30 days. The insurer does not have to provide:   

Any notice that the policy is about to expire Confirmation that any changes to the policy are included in a renewal policy term Any specific notice of cancellation, expiration, or nonrenewal.

In the event that a payment is both received and accepted by the NFIP, a renewal notice will be sent to the insured. 

An insured may be required to confirm that all of their rating information is still correct. The NFIP uses a Recertification Questionnaire for this purpose.

The burden of making sure renewals are correct is one of the insured. If an insured requests that coverage be increased during the policy term, but the renewal comes in at the old amount, it is the insured's responsibility to make sure the error is corrected. 

Although the NFIP is not obligated to send a renewal notice, it does provide such notices in the following manner: o o o o

o

They’re sent roughly 30 days before the policy expiration date The notices are sent using regular mail Evidence that the notice was sent is proof of notice being delivered regardless of whether a notice was received by the insured If, within a year from the policy’s expiration date an insured or his agent tells the NFIP that they never received a renewal notice and the NFIP is able to confirm that a notice was not received, the NFIP will send a second renewal notice. The second notice will have a separate 30-day grace period - if it is paid in time, the coverage will renew. If it is not paid, the policy remains expired.

H. Conditions Suspending or Restricting Insurance: Unless otherwise provided in writing added hereto, we shall not be liable for loss occurring while the hazard is increased by any means within your control or knowledge.

This condition states that the flood policy will not pay for a loss that occurs after an insured either knows about or is responsible for an increase in the property’s vulnerability to flooding.

I. Alterations and Repairs: You may, at any time and at your own expense, make alterations, additions and repairs to the insured property, and complete structures in the course of construction.

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While the insured has permission to make modifications or repairs, the insured is responsible for any negative consequences of such changes. A loss occurring while hazard is increased by means within the insured’s control is not covered.

J. Requirements in Case of Loss: Should a flood loss occur to your insured property, you must: 1.

Notify us in writing as soon as practicable;

2. As soon as reasonably possible, separate the damaged and undamaged property, putting it in the best possible order so that we may examine it; and 3. Within 60 days after the loss, send us a proof of loss, which is your statement as to the amount you are claiming under the "policy" signed and sworn to by you and furnishing us with the following information: a.

The date and time of the loss;

b.

A brief explanation of how the loss happened;

c. Your interest in the property damaged (for example, "owner") and the interest, if any, of others in the damaged property; d. The "actual cash value" or replacement cost, whichever is appropriate, of each damaged item of insured property and the amount of damages sustained; e. Names of mortgagees or anyone else having a lien, charge or claim against the insured property; f.

Details as to any other contracts of insurance covering the property, whether valid or not;

g. Details of any changes in ownership, use, occupancy, location or possession of the insured property since the "policy" was issued; h. Details as to who occupied any insured "building" at the time of loss and for what purpose; and i. The amount you claim is due under this "policy" to cover the loss, including statements concerning: (1)

The limits of coverage stated in the "policy"; and

(2)

The cost to repair or replace the damaged property (whichever costs less).

4.

Cooperate with our adjuster or representative in the investigation of the claim;

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5. Document the loss with all bills, receipts, and related documents for the amount being claimed; 6. The insurance adjuster whom we hire to investigate your claim may furnish you with a proof of loss form, and she or he may help you to complete it. However, this is a matter of courtesy only, and you must still send us a proof of loss within 60 days after the loss even if the adjuster does not furnish the form or help you complete it. In completing the proof of loss, you must use your own judgment concerning the amount of loss and the justification for that amount. The adjuster is not authorized to approve or disapprove claims or tell you whether your claim will be approved by us. 7. We may, at our option, waive the requirement for the completion and filing of a proof of loss in certain cases, in which event you will be required to sign and, at our option, swear to an adjuster's report of the loss which includes information about your loss and the damages sustained, which is needed by us in order to adjust your claim. 8. Any false statements made in the course of presenting a claim under this ``policy'' may be punishable by fine or imprisonment under the applicable Federal Laws.

The duties of the insured following a loss are extensive. The insured must give details as to who was in the dwelling at the time of the loss and for what purpose. The insured must also give details of other contracts of insurance on the property. Although an adjuster may assist the insured in preparing a proof of loss, it is still the insured's responsibility to forward the proof of loss within 60 days to the NFIP. The adjuster is not authorized to approve a claim or tell the insured that the NFIP will approve the claim.

K. Our Options After a Loss: Options we may, in our sole discretion, exercise after loss include the following: 1. Evidence of Loss: If we specifically request it, in writing, you may be required to furnish us with a complete inventory of the destroyed, damaged and undamaged property, including details as to quantities, costs, ``actual cash values'' or replacement cost (whichever is appropriate), amounts of loss claimed, and any written plans and specifications for repair of the damaged property which you can make reasonably available to us. 2. Examination Under Oath and Access to Insured Property Ownership Records and Condominium Documents: We may require you to: a. Show us, or our designee, the damaged property, to be examined under oath by our designee and to sign any transcripts of such examinations; and

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b. At such reasonable times and places as we may designate, permit us to examine and make extracts and copies of any ``policies'' of property insurance insuring you against loss; and the deed establishing your ownership of the insured real property; and the ``condominium'' documents including the Declarations of the ``condominium,'' its Articles of Association or Incorporation, Bylaws, rules and regulations, and other ``condominium'' documents if you are a ``unit'' owner in a ``condominium building''; and all books of accounts, bills, invoices and other vouchers, or certified copies thereof if the originals are lost, pertaining to the damaged property. 3. Options to Replace: We may take all or any part of the damaged property at the agreed or appraised value and also, repair, rebuild or replace the property destroyed or damaged with other of like kind and quality within a reasonable time, on giving you notice of our intention to do so within 30 days after the receipt of the proof of loss herein required under paragraph J.3. above. 4. Adjustment Options: We may adjust loss to any insured property of others with the owners of such property or with you for their account. Any such insurance under this ``policy'' shall not inure directly or indirectly to the benefit of any carrier or other bailee for hire.

An insurer has the right to know the full extent of the property owned and affected in a flood loss claim. It is also important that the insurer reserve its right to getting complete information about the property’s value and any details concerning the insured’s arrangements to have the damage repaired. It is implied that it is the insurer who interprets what is meant by "reasonable." The insurer has the right to find the least expensive option of reimbursing an insured for an eligible loss. While an insured may dispute this right, it is a valid method for an insurer to control its total obligation for settling claims. The insurer has the choice of dealing with the actual owner of the insured property instead of the policyholder. This option allows the insurer a better chance to settle the loss more efficiently rather than coming to an agreement with the policyholder and then have the decision disputed by the actual property owner. The policy will not respond to a situation where a third party may benefit from the policy’s coverage. The insurer has the option to make copies of other policies of insurance covering the same property, whether or not such policies provide coverage for flood. The insured must have the deed to the covered property and any pertinent condominium documents at the ready. Insureds should be advised to keep all such documents in a safe place. L. When Loss Payable: Loss is payable within 60 days after you file your proof of loss (or within 90 days after the insurance adjuster files an adjuster's report signed and sworn to by you in lieu of a proof of loss) and ascertainment of the loss is made either by agreement between us and you ex- pressed in writing or by the filing with us of an award as provided in paragraph N. below. If we reject your proof of loss in whole or in part, you may accept such denial of your claim, or exercise your rights under this policy, or file an amended proof of loss as long as it is filed within 60 days of the date of the loss or any extension of time allowed by the Administrator.

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Once an insured files a proof of loss and the insurer accepts it as valid, the insurer is obligated to pay for the loss within:  

60 days (for Proof of Loss) 90 days (for a signed adjuster’s report).

If the proof of loss (claim) is wholly or partially denied, the insured has the following options:   

Accept the denial File an amended proof of loss (within the time period allowed by the Administrator), or Exercise your other rights under this policy.

M.

Abandonment: You may not abandon damaged or undamaged insured property to us. However, we may permit you to keep damaged, insured property ("salvage") after a loss and we will reduce the amount of the loss proceeds payable to you under the policy by the value of the salvage.

An insured does not have the right to abandon any covered property to the insurer, even if it is damaged. If the insurer gives its permission, however, an insured may be allowed to keep "salvaged" property. The insurer will have to adjust any loss payment to reflect the fact that salvage property was kept by the insured, including future payments.

N. Appraisal: If at any time after a loss, we are unable to agree with you as to the actual cash value or, if applicable, replacement cost of the damaged property so as to determine the amount of loss to be paid to you, then, on the written demand of either one of us, each of us shall select a competent and disinterested appraiser and notify the other of the appraiser selected within 20 days of such demand. The appraisers shall first select a competent and disinterested umpire; and failing, after 15 days, to agree upon such umpire, then, on your request or our request, such umpire shall be selected by a judge of a court of record in the State in which the insured property is located. The appraisers shall then appraise the loss, stating separately replacement cost, actual cash value and loss to each item; and, failing to agree, shall submit their differences, only, to the umpire. An award in writing, so itemized, of any two (appraisers or appraiser and umpire) when filed with us shall determine the amount of actual cash value and loss or, should this policy's replacement cost provisions apply, the amount of re- placement cost and loss. Each appraiser shall be paid by the party selecting him or her and the expenses of appraisal and umpire shall be paid by both of us equally.

If the insurer and the insured do not agree over the value of the covered property or the amount of the loss, each party has 20 days (after receiving a written request from the other party) to select an appraiser. The two appraisers will select an umpire. If they do not agree on an umpire within 15 days, the two appraisers will ask a judge of a court of record of the state where the appraisal is pending to make the selection. Each appraiser will submit their own suggestions of value for each item of property, with any disputes submitted to the judge. The insured and the insurer are bound by the written agreement of any two of these

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three persons. Each party will pay its appraiser and the two parties will share the cost of the umpire and related expenses equally.

0. Loss Clause: If we pay you for damage to property sustained in a flood loss, you are still eligible, during the term of the policy, to collect for a subsequent loss due to another flood. Of course, all loss arising out of a single, continuous flood of long duration shall be adjusted as one flood loss.

If the insured is paid for damage to property sustained in a flood loss, they are still eligible, during the term of the policy, to collect for a subsequent loss due to another flood. All loss arising out of a single, continuous flood of long duration is adjusted as one flood loss. Flood coverage is on a "per occurrence" basis. If flood damages covered property and the loss is settled, that does not preclude the insured from making another claim should another flood occur.

P. Mortgage Clause: (Applicable to building coverage only and effective only when the policy is made payable to a mortgagee or trustee named in the application and declarations page attached to this policy or of whom we have actual notice prior to the payment of loss proceeds under this policy). Loss, if any, under this policy, shall be payable to the aforesaid as mortgagee or trustee as interest may appear under all present or future mortgages upon the property described in which the aforesaid may have an interest as mortgagee or trustee, in order of precedence of said mortgages, and this insurance, as to the interest of the mortgagee or trustee only therein, shall not be invalidated by any act or neglect of the mortgagor or owner of the described property, nor by any foreclosure or other proceedings or notice of sale relating to the property, nor by any change in the title or ownership of the property, nor by the occupation of the premises for purposes more hazardous than are permitted by this policy; provided, that in case the mortgagor or owner shall neglect to pay any premium due under this policy, the mortgagee or trustee shall, on demand, pay the same. Provided, also, that the mortgagee or trustee shall notify us of any change of ownership or occupancy or increase of hazard which shall come to the knowledge of said mortgagee or trustee and, unless permitted by this policy, it shall be noted thereon and the mortgagee or trustee shall, on demand, pay the premium for such increased hazard for the term of the use thereof; otherwise, this policy shall be null and void. If this policy is cancelled by us, it shall continue in force for the benefit only of the mortgagee or trustee for 30 days after written notice to the mortgagee or trustee of such cancellation and shall then cease, and we shall have the right, on like notice, to cancel this agreement. Whenever we shall pay the mortgagee or trustee any sum for loss under this "policy" and shall claim that, as to the mortgagor or owner, no liability therefore existed, we shall, to the extent of such payment, be thereupon legally subrogated to all the rights of the party to whom such payment shall be made, under all securities held as collateral to the mortgage debt, or may, at our option, pay to the mortgagee or trustee the whole principal due or to grow due on the mortgage with interest, and shall thereupon receive a full assignment and transfer of the

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mortgage and of all such other securities; but no subrogation shall impair the right of the mortgagee or trustee to recover the full amount of said mortgagee’s or trustee’s claim.

This condition applies only to the covered building and only when that building has a mortgage interest shown in the policy or if the insurer finds out about the mortgage interest before any loss is paid. The rest of this condition states:    



Any loss payment will be made to either a mortgagee or trustee; in accordance to how their interests appear The property interests are paid in order of precedence The maximum amount of payment is limited to the mortgagee/trustee’s actual financial interest No act of the borrower affects the insurer’s obligation to pay the lender or trustee’s financial interest in the policy except when the policy premium is not paid. In such cases, agreements generally give the mortgage-holder a separate payment notice, and the lender can pay it and protect their financial interest The mortgagee can maintain the policy even when there’s an increase in hazard or a change of title if they notify the insurer of this change.

The policy can be voided if the mortgagee doesn’t pay the additional premium necessary to cover the exposure to a higher hazard of loss.   

The mortgagee is entitled to a separate 30-day advanced notice of cancellation. The insurer may, under certain conditions, acquire the mortgagee’s right to recover against a party that damaged the covered property. The existence of subrogation doesn’t affect the mortgagee’s right to full payment under the policy.

Q. Mortgagee Obligations: If you fail to render proof of loss, the named mortgagee or trustee, upon notice, shall render proof of loss in the form herein specified within 60 days thereafter and shall be subject to the provisions of this policy relating to appraisal and time of payment and of bringing suit.

The mortgagee may become obligated to assume the insured’s notification and other policy obligations if the insured fails to do so. The mortgagee is under the obligation to notify the insurer of any known change in ownership, occupancy, or increase of hazard. If the policy is cancelled, it will remain in force solely for the benefit of the mortgagee (or a trustee) for 30 days following written notice to the mortgagee or trustee.

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The mortgagee has the responsibility of filing a proof of loss if the insured does not do so. Notice will be sent to the mortgagee advising if this action is necessary.

R. Conditions for Filing a Lawsuit: You may not sue us to recover money under this "policy" unless you have complied with all the requirements of the "policy." If you do sue, you must start the suit within 12 months from the date we mailed you notice that we have denied your claim, or part of your claim, and you must file the suit in the United States District Court of the district in which the insured property was located at the time of loss.

The insured may file suit against the insurer, however, the right is limited as follows:   

The suit must be filed within one year after being notified that the claim is denied All other policy conditions, such as appraisal, must be satisfied The suit must be filed in the District court where the covered property is located.

Suit against the insurer must be filed in the U.S. District Court for the district in which the insured property is located. S. Subrogation: Whenever we make a payment for a loss under this "policy," we are subrogated to your right to recover for that loss from any other person. That means that your right to recover for a loss that was partly or totally caused by someone else is automatically transferred to us, to the extent that we have paid you for the loss. We may require you to acknowledge this transfer in writing. After the loss, you may not give up our right to recover this money or do anything which would prevent us from recovering it. If you make any claim against any person who caused your loss and recover any money, you must pay us back first before you may keep any of that money.

Whenever the insurer makes a payment for a loss under this policy, they are subrogated to the insured’s right to recover for that loss from any other person. The insured’s right to recover for a loss that was partly or totally caused by someone else is automatically transferred to the insurer, to the extent that they have paid for the loss. After the loss, the insured may not give up the insurer’s right to recover this money or do anything that would prevent them from recovering it. If the insured recovers any money, they must pay the insurer back first before they may keep any of that money.

T. Continuous Lake Flooding: Where the insured "building" has been inundated by rising lake waters continuously for 90 days or more and it appears reasonably certain that a continuation of this flooding will result in damage, reimbursable under this "policy," to the insured "building" equal to or greater than the "building" "policy" limits plus the deductible(s) or the maximum payable under the "policy" for any one "building" loss, we will pay you the lesser of these two amounts without waiting for the further damage to occur if you sign a release agreeing:

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1.

To make no further claim under this "policy";

2.

Not to seek renewal of this "policy"; and

3. Not to apply for any "flood" insurance under the "Act" for property at the property location of the insured "building." If the "policy" term ends before the insured "building" has been flooded continuously for 90 days, the provisions of this paragraph T. still apply so long as the first "building" damage reimbursable under this "policy" from the continuous flooding occurred before the end of the "policy" term.

This describes a loss situation where a property covered under a flood policy becomes uninsurable through the NFIP. When a property is experiencing an extended and uninterrupted period of flooding (90 days or more), and which, in all likelihood, is eligible for the maximum payout provided by the policy, the insured may request to receive payment without waiting for the waters to recede and going through the loss adjustment process. The release mentioned above stipulates the following conditions, which must be accepted by an insured in order to receive payment under the continuous flooding condition: 1. To make no further claim under this policy; 2. Not to seek renewal of this policy; and 3. Not to apply for any flood insurance under the Act for property at the location of the insured building. This option does not have to occur within a single policy period in order to be exercised. It could start a month before the expiration of one policy term and then be exercised in the third month of the renewal policy term. The controlling condition is the length of the continuous inundation.

U. Duplicate Policies Not Allowed: Property may not be insured under more than one "policy" issued under the "Act.” When we find that duplicate "policies" are in effect, we shall by written notice give you the option of choosing which "policy" is to remain in effect under the following procedures: 1. If you choose to keep in effect the "policy" with the earlier effective date, we shall by the same written notice give you an opportunity to add the coverage limits of the later "policy" to those of the earlier "policy," as of the effective date of the later "policy." 2. If you choose to keep in effect the "policy" with the later effective date, we shall by the same written notice give you the opportunity to add the coverage limits of the earlier "policy" to those of the later "policy," as of the effective date of the later "policy."

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In either case, you must pay the pro rata premium for the increased coverage limits within 30 days of the written notice. In no event shall the resulting coverage limits exceed the statutorily permissible limits of coverage under the "Act" or your insurable interests, whichever is less. We shall make a refund to you, according to applicable "National Flood Insurance Program" rules, of the premium for the "policy" not being kept in effect. For purposes of this paragraph U., the term "effective date" means the date coverage that has been in effect without any lapse was first placed in effect. In addition to the provisions of this paragraph U. for increasing "policy" limits, the usual procedures for increasing "policy" limits, by mid-term endorsement or at renewal time, with the appropriate waiting period, are applicable to the "policy" you choose to keep in effect.

The NFIP does not allow two policies covering the same property to co-exist. Once the duplicate situation is discovered, the insured is given a choice on which policy is to be continued. Once this choice is made, the condition controls how policy limits are combined, when the additional premium payment must be paid and how any refunds are handled. ARTICLE 10 - LIBERALIZATION CLAUSE

ARTICLE 10 -- LIBERALIZATION CLAUSE If during the period that insurance is in force under this "policy" or within 45 days prior to the inception date thereof, should we have adopted under the "Act," any forms, endorsements, rules or regulations by which this "policy" could be extended or broadened, without additional premium charge, by endorsement or substitution of form, then, such extended or broadened insurance shall inure to your benefit as though such endorsement or substitution of form had been made. Any broadening or extension of this "policy" to your benefit shall only apply to losses occurring on or after the effective date of the adoption of any forms, endorsements, rules or regulations affecting this "policy."

If coverage under the flood program represents a benefit to an insured and does not require a premium payment, the insured automatically receives the benefit and, if applicable, it would apply to any loss that occurs after the benefit has been introduced by the program. This condition allows changes to be made to the flood program without having to immediately correct the wording of policies that are produced and distributed in advance.

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ARTICLE 11 - WHAT LAW GOVERNS

ARTICLE 11 -- WHAT LAW GOVERNS This "policy" is governed by the "flood" insurance regulations issued by FEMA, the National Flood Insurance Act of 1968, as amended (42 U.S.C. 4001, et seq.) and Federal common law.

The coverages and application of the policy are controlled by FEMA regulations and the National Flood Insurance Act, as well as Federal common law. Of course, the Liberalization Clause does help to protect insureds against "negative" coverage developments which may occur. PROCEDURES IN CASE OF A FLOOD This is a helpful addition to the flood policy since it tells people some important things they must do when a flood occurs, such as:          

Quickly notify your agent Ask your agent to get the claim assigned to a NFIP adjuster Contact your adjuster within a day after reporting the flood loss (if he/she has yet to get in touch) Organize and preserve damaged property to assist the adjuster’s evaluation of the damage Talk to the adjuster about payment advances Take interior and exterior photographs which show damages Gather written documentation of belongings Work closely with the adjuster, providing full loss information Ask the adjuster to properly explain flood claim procedures, especially concerning the required Proof of Loss statement Contact the NFIP directly to handle any claim payment problems.

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DIFFERENCE IN CONDITIONS - DIC The NFIP is not the only source of flood insurance. Businesses have been able to purchase flood insurance under Difference In Conditions policies from some insurance companies over the years. Flood coverage for residential homeowners has been more difficult to acquire from the private insurance market. The often-catastrophic nature of flooding has kept most insurers, outside of the NFIP, from writing this coverage. There are companies, such as Lloyds of London, that will, on a limited basis, provide flood insurance to some properties. Difference in Conditions (DIC) policies used to be more common than they are today. Before all risks forms became widely accepted and used, insurers offered DIC policies to supplement named perils policies. It was a common way of providing all risks coverage. Some insurers still use a named perils plus DIC approach; instead of issuing one all risks policy. Now that all risks forms are common, DIC policies are usually purchased only by businesses with flood or earthquake exposures—and they are typically purchased from a different insurer than the one providing the fire coverage. In most cases the reason that a particular business decides to buy a named perils policy plus a DIC policy, rather than one all risks policy, is that it is the best way—or even the only way—for a business with significant flood or earthquake exposures to get flood and earthquake coverage. Even when the insured's flood and earthquake exposures are not particularly troublesome, sometimes a given named-perils-plusDIC policy combination is less costly than a competing all risks policy. Many, perhaps most, insurers lack either the interest or the capacity to cover flood and earthquake, particularly if these exposures are perceived as severe. These insurers may nevertheless offer the best coverage, service, and price for the exposures that they are willing to cover. At the same time, there are insurers that are willing and able to provide flood and earthquake coverage—for a price, and subject to a high deductible, a relatively low peroccurrence limit, and an annual aggregate limit. Buying a named perils policy from an insurer that focuses on the fire exposure, and a DIC policy from an insurer willing and able to gamble on the catastrophe exposures avoided by the traditional fire insurer, is a way of getting the best of both worlds. Theoretically a DIC policy could be written in conjunction with an all risks policy rather than a named perils policy. And getting an all risks policy instead of a named perils policy from the fire insurer would seldom be a problem, since virtually all risks forms exclude flood and earthquake. However, the insured business should get at least some premium break for buying a named perils form instead of an all risks form. Besides, DIC underwriters typically are unwilling to provide coverage in conjunction with an all risks policy. Apparently they want to charge some premium and provide some coverage for perils other than flood and earthquake. This is true even though it is usually very clear that the insured's only reason for purchasing a DIC is to cover the flood or earthquake exposure. There is no standard DIC form. That means that the only way to be sure about what coverage is provided under a given DIC form is to read it. A DIC policy is just a property policy intended to provide coverage for flood, earthquake, and all other perils not covered under a given named perils policy. The DIC should read much like a standard all risks property policy in most respects. In fact, there is no reason that an insurer couldn't use their standard all risks commercial property form as a DIC, with some modifications.

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Most insurers however, use a special DIC form. Some are modeled after current or previous ISO standard property forms. Again, these are probably fine, assuming that there have been a few modifications to the standard provisions discussed below. Be wary of very brief DIC forms that may be too vague. If the form is short because it has very few exclusions, that is undoubtedly favorable to the insured. And there is no problem (from the insured's point of view) with a DIC form that is short because it lacks the standard clauses outlining the insured's obligations in the event of loss, or the insurer's right to deny coverage if the insured engages in material misrepresentation or fraud, etc. However, a very brief form may also lack language that specifies what property is and is not covered under what conditions. Such ambiguity may serve the insured if the loss is denied and the case goes to court, but clear policy language that affirmatively grants coverage for the loss exposures for which coverage is needed should eliminate the need for court involvement in the first place. Even though a need for flood or earthquake coverage is usually the reason for buying a DIC, most DIC forms (like other all risks property forms) exclude these perils. Coverage is normally provided by endorsement to the basic form. It is important to compare the language of the DIC form's flood and earthquake exclusions with the language of the flood and earthquake coverage endorsements to understand the extent of coverage provided. The flood exclusion may well eliminate coverage not only for flood but for most other types of water damage (such as sewer backup, seepage, and mudslide) as well. In that case, the flood coverage endorsement should (ideally, at least) add back coverage for all of the types of water damage mentioned in the flood exclusion, not just flood. Otherwise, sewer backup, seepage, and mudslide are left uninsured. Similarly, the DIC form may contain a sweeping exclusion of all types of earth movement. If so, the earthquake coverage endorsement should (ideally) add back coverage for all earth movement as described in the exclusion, not just for earthquake. Any coverage provided under the flood and earthquake coverage endorsements will be subject to the flood and earthquake sublimits and deductibles. For this reason, a DIC form with narrow exclusions (of just earthquake and just flood) would be preferable to a DIC form with comprehensive exclusions, even if the flood and earthquake coverage endorsements add back coverage for all excluded types of water damage and earth movement. A DIC policy, briefly, was originally called a "gap filler," because it provides coverage against all risks of loss and was written over a property policy that limited its causes of loss to named perils. The idea was that losses from the named perils were more likely to happen and that causes of loss covered by the DIC policy--flood or earthquake, for example--would be less likely but nonetheless catastrophic enough that it was a good idea to have this policy in place. Thus, the DIC policy not only provided coverage not otherwise available, but also excess limits for losses covered by the primary property policy. As it has become more common for property forms to provide coverage on an all-risks perils basis, the need for DIC coverage as gap filler has decreased. However, it is still a useful tool to single out excess coverage for certain specified losses, such as those due to transit or property exposures in foreign lands, and business interruption resulting from floods. Considering that the National Flood Insurance Program does not offer business interruption coverage, DIC could be an alternative.

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The DIC policy however, is not as broad or as useful as it once was. The problem with the DIC policy is that it is virtually impossible to determine what it might cover, subject to a high deductible, in excess of what coverage is available under a primary property policy. One actually has to formulate loss situations and then search the policy for a possible answer as to coverage. The problem is that not as many insurers offer this coverage as business owners would have wished.

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New ISO Flood Form The Insurance Services Office Flood Coverage Endorsement (CP 10 65) is intended to provide excess coverage where insurance must be purchased from the National Flood Insurance Program, or primary where this governmental program does not apply. Among some of this endorsement's features are the following: 

    

While coverage under the National Flood Insurance Program is on an actual cash value basis, coverage under this endorsement will follow the particular valuation applicable to the ISO policy; that is, actual cash value, replacement cost, or functional replacement value. An option is provided for coverage on a "no co-insurance" basis, thus enabling insureds to purchase flood insurance at full limits applicable to other causes of loss, or for sublimits. Coverage is subject to an annual aggregate. With flexibility of the endorsement, the aggregate can be in the same amount as the single occurrence of flood limit, or the aggregate can be a multiple thereof. The flood loss that occurs before or within 72 hours after the inception date of this endorsement is not covered. The policy's Ordinance or Law exclusion applies to coverage under this flood endorsement, unless Ordinance or Law coverage has been purchased. This newly proposed endorsement also does not cover the cost of restoring or remediating land.

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FLOOD RISK MANAGEMENT Although flooding is a catastrophic event, individuals are not powerless in influencing their potential damage. Property owners have specific ways available to mitigate or even avoid flood damage by practicing personal risk management activities and behaviors. The actions an individual can take regarding his or her risk of facing a flood loss depend upon the following:   

A particular area’s flood hazard, The individual property’s characteristics, A community’s zoning and building codes.

This brief checklist of activities range from the simple and inexpensive up to actions, which involve the participation of building professionals and their fees. While this checklist can help a property owner identify certain activities, it may be important to contact a professional builder, architect, or contractor for more information about the costs and benefits of each method. Your local building department is the place to go for information on whether an action requires a building permit. Coping With a Flood: Before, During and After Some good advice from the Red Cross: Nobody can stop a flood. But if you are faced with one, there are actions you can take to protect your family and keep your property losses to a minimum. Mitigation helps! It lessens the damaging effects from flooding. Participating in the National Flood Insurance Program (NFIP) and enforcing sound floodplain management techniques are steps your community can undertake. Constructing barriers such as levees will also help reduce the amount of damage to your home and crops, while purchasing flood insurance reduces the financial burden should a flood or flash flood occur. The most important thing is to make sure your family is safe. Before a Flood What is your flood risk? Your community officials or local emergency management office are your best resources to learn about the history of flooding for your region. Ask whether your property is in the floodplain and if it is above or below the flood stage water level. Flood Insurance Rate Maps (FIRMs) are used to determine your flood risk. FIRMs are found in several places for your convenience: Your local community map repository, usually, the building and planning departments. The FEMA Map Store for maps, flood studies, and other products on-line or paper copies. Call a Map Specialist for specific questions about your flood zone at 1.877.336.2627  

Have disaster supplies on hand. Flashlights and extra batteries

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      

Portable, battery-operated radio and extra batteries tuned to a local station, and follow emergency instructions. First aid kit and manual Emergency food and bottled water Non-electric can opener Essential medicines Cash and credit cards Sturdy shoes

If you live in a frequently flooded area, take preventative measures and stockpile emergency building materials:   

Plywood, plastic sheeting, lumber, nails, hammer and saw, pry bar, shovels, and sandbags. Have check valves installed in building sewer traps to prevent flood waters from backing up in sewer drains. As a last resort, use large corks or stoppers to plug showers, tubs, or basins.

Plan and practice an evacuation route.  

   



    

Learn flood-warning signs and your community's alert signals Contact your local emergency management office or local American Red Cross chapter for a copy of the community flood evacuation plan. This plan should include information on the safest routes to shelters. Individuals living in Flash flood areas should have several alternative routes. Request information on preparing for floods and flash floods. Develop an emergency communication plan. In case family members are separated from one another during floods or flashfloods (a real possibility during the day when adults are at work and children are at school), have a plan for getting back together. Ask an out-of-state relative or friend to serve as the "family contact." After a disaster, it's often easier to call long distance. Make sure everyone in the family knows the name, address, and phone number of the contact person. Make sure that all family members know how to respond after a flood or flash flood. Teach all family members how and when to turn off gas, electricity, and water. Teach children how and when to call 9-1-1, police, fire department, and which radio station to tune to for emergency information. Be prepared to evacuate. Keep a battery-powered radio tuned to a local station, and follow emergency instructions. If the waters start to rise inside your house before you have evacuated, retreat to the second floor, the attic, and if necessary, the roof. Take dry clothing, a flashlight, and a portable radio with you. Then, wait for help. Don't try to swim to safety; wait for rescuers to come to you.

If Time Permits, Here Are Other Steps That You Can Take Before The Flood Waters Come 

Turn off all utilities at the main power switch and close the main gas valve if evacuation appears necessary.

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  

Move valuables, such as papers, furs, jewelry, and clothing to upper floors or higher elevations. Fill bathtubs, sinks, and plastic soda bottles with clean water. Sanitize the sinks and tubs first by using bleach. Rinse, then fill with clean water. Bring outdoor possessions, such as lawn furniture, grills, and trashcans inside, or tie them down securely.

Once The Flood Arrives         

Don't drive through a flooded area. If you come upon a flooded road, turn around and go another way. More people drown in their cars than anywhere else. If your car stalls, abandon it immediately and climb to higher ground. Many deaths have resulted from attempts to move stalled vehicles. Don't walk through flooded areas. As little as six inches of moving water can knock you off your feet. Stay away from downed power lines and electrical wires. Electrocution is another major source of deaths in floods. Electric current passes easily through water. Look out for animals - especially snakes. Animals lose their homes in floods, too. They may seek shelter in yours. If the waters start to rise inside your house before you have evacuated, retreat to the second floor, the attic, and if necessary, the roof. Take dry clothing, a flashlight, and a portable radio with you. Then, wait for help. Don't try to swim to safety; wait for rescuers to come to you. If outdoors, climb to high ground and stay there.

After The Flood Flood dangers do not end when the water begins to recede. Listen to a radio or television and don't return home until authorities indicate it is safe to do so. Remember to help your neighbors who may require special assistance--infants, elderly people, and people with disabilities.     

  

If your home, apartment, or business has suffered damage, call the insurance company or agent who handles your flood insurance policy right away to file a claim. Before entering a building, check for structural damage. Don't go in if there is any chance of the building collapsing. Upon entering the building, do not use matches, cigarette lighters, or any other open flames, since gas may be trapped inside. Instead, use a flashlight to light your way. Keep power off until an electrician has inspected your system for safety. Floodwaters pick up sewage and chemicals from roads, farms, and factories. If your home has been flooded, protect your family’s health by cleaning up your house right away. Throw out foods and medicines that may have come into contact with flood water. Until local authorities proclaim your water supply to be safe, boil water for drinking and food preparation vigorously for five minutes before using. Be careful walking around. After a flood, steps and floors are often slippery with mud and covered with debris, including nails and broken glass. Take steps to reduce your risk of future floods. Make sure to follow local building codes and ordinances when rebuilding, and use flood-resistant materials and techniques to protect yourself and your property from future flood damage.

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One of the most important things that can be done to protect home and family before a flood is to purchase a flood insurance policy. A flood insurance policy can be obtained through your insurance company or agent. Flood insurance is guaranteed through the National Flood Insurance Program (NFIP), administered by the Federal Emergency Management Agency. Homeowners insurance does not cover flood damage. Don't wait until a flood is coming to purchase the policy. purchase for a flood insurance policy to go into effect.

It normally takes 30 days after

Disaster Supplies Kit Disasters happen anytime and anywhere. When disaster strikes, there may not be much time to respond. A highway spill or hazardous material could mean evacuation. A winter storm could cause confinement to the home. An earthquake, flood, tornado, or any other disaster could cut water, electricity, and telephones-for days. After a disaster, local officials and relief workers will be on the scene, but they cannot reach everyone immediately. Help could arrive in hours, or it could take days. Would the family be prepared to cope with the emergency until help arrives? Families will cope best by preparing for disaster before it strikes. One way to prepare is by assembling a Disaster Supplies Kit. Once disaster hits, there won't be time to shop or search for supplies. But if you've supplies are gathered in advance, the family can endure an evacuation or home confinement. Prepare Your Kit    

Review the checklist below. Gather the supplies that are listed. You may need them if your family is confined at home. Place the supplies you'd most likely need for an evacuation in an easy-to-carry container. These supplies are listed with an asterisk. There are six basics you should stock for your home: water, food, first aid supplies, clothing and bedding, tools and emergency supplies, and special items. Keep the items that you would most likely need during an evacuation in an easy-to carry container-suggested items are marked with an asterisk.

Possible Containers Include   

A large, covered trash container, A camping backpack, A duffle bag.

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Water 

 

Store water in plastic containers such as soft drink bottles. Avoid using containers that will decompose or break, such as milk cartons or glass bottles. A normally active person needs to drink at least two quarts of water each day. Hot environments and intense physical activity can double that amount. Children, nursing mothers, and ill people will need more. Store one gallon of water per person per day. Keep at least a three-day supply of water per person (two quarts for drinking, two quarts for each person in your household for food preparation/sanitation).

Food 

Store at least a three-day supply of non-perishable food. Select foods that require no refrigeration, preparation or cooking, and little or no water. If you must heat food, pack a can of sterno. Select food items that are compact and lightweight. Include a selection of the following foods in your Disaster Supplies Kit: o

Ready-to-eat canned meats, fruits, and vegetables

First Aid Kit Assemble a first aid kit for your home and one for each car. A first aid kit should include:                   

Sterile adhesive bandages in assorted sizes Assorted sizes of safety pins Cleansing agent/soap Latex gloves (2 pairs) Sunscreen 2-inch sterile gauze pads (4-6) 4-inch sterile gauze pads (4-6) Triangular bandages (3) Non-prescription drugs 2-inch sterile roller bandages (3 rolls) 3-inch sterile roller bandages (3 rolls) Scissors Tweezers Needle Moistened towelettes Antiseptic Thermometer Tongue blades (2) Tube of petroleum jelly or other lubricant

Non-Prescription Drugs      

Aspirin or non-aspirin pain reliever Anti-diarrhea medication Antacid (for stomach upset) Syrup of Ipecac (use to induce vomiting if advised by the Poison Control Center) Laxative Activated charcoal (use if advised by the Poison Control Center)

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Tools and Supplies                      

Mess kits, or paper cups, plates, and plastic utensils Emergency preparedness manual Battery-operated radio and extra batteries Flashlight and extra batteries Cash or traveler's checks, change Non-electric can opener, utility knife Fire extinguisher: small canister ABC type Tube tent Pliers Tape Compass Matches in a waterproof container Aluminum foil Plastic storage containers Signal flare Paper, pencil Needles, thread Medicine dropper Shut-off wrench, to turn off household gas and water Whistle Plastic sheeting Map of the area (for locating shelters)

Sanitation        

Toilet paper, towelettes Soap, liquid detergent Feminine supplies Personal hygiene items Plastic garbage bags, ties (for personal sanitation uses) Plastic bucket with tight lid Disinfectant Household chlorine bleach

Clothing and Bedding       

Include at least one complete change of clothing and footwear per person. Sturdy shoes or work boots Rain gear Blankets or sleeping bags Hat and gloves Thermal underwear Sunglasses

Special Items 

Remember family members with special requirements, such as infants and elderly or disabled persons

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For Baby     

Formula Diapers Bottles Powdered milk Medications

For Adults      

Heart and high blood pressure medication Insulin Prescription drugs Denture needs Contact lenses and supplies Extra eye glasses

Entertainment 

Games and books

Important Family Documents 

Keep these records in a waterproof, portable container: o o o o

   



Will, insurance policies, contracts deeds, stocks and bonds Passports, social security cards, immunization records Bank account numbers Credit card account numbers and companies

Inventory of valuable household goods, important telephone numbers Family records (birth, marriage, death certificates) Store your kit in a convenient place known to all family members. Keep a smaller version of the Disaster Supplies Kit in the trunk of your car. Keep items in airtight plastic bags. Change your stored water supply every six months so it stays fresh. Replace your stored food every six months. Re-think your kit and family needs at least once a year. Replace batteries, update clothes, etc. Ask your physician or pharmacist about storing prescription medications. Food and Water in an Emergency

If an earthquake, hurricane, winter storm or other disaster strikes your community, you might not have access to food, water and electricity for days, or even weeks. By taking some time now to store emergency food and water supplies, you can provide for your entire family. This brochure was developed by the Federal Emergency Management Agency in cooperation with the American Red Cross and the U.S. Department of Agriculture. Water: Having an ample supply of clean water is a top priority in an emergency. A normally active

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person needs to drink at least two quarts of water each day. Hot environments can double that amount. Children, nursing mothers and ill people will need even more. You will also need water for food preparation and hygiene. Store a total of at least one gallon per person, per day. You should store at least a two - week supply of water for each member of your family. If supplies run low, never ration water. Drink the amount you need today, and try to find more for tomorrow. You can minimize the amount of water your body needs by reducing activity and staying cool. How to Store Water: Store water in thoroughly washed plastic, glass, fiberglass or enamel-lined metal containers. Never use a container that has held toxic substances. Plastic containers, such as soft drink bottles, are best. You can also purchase food-grade plastic buckets or drums. Seal water containers tightly, label them, and store in a cool, dark place. Rotate water every six months. Emergency Outdoor Water Sources: If you need to find water outside your home, you can use these sources. Be sure to purify the water according to the instructions listed below before drinking it.    

Rainwater Streams, rivers and other moving bodies of water Ponds and lakes Natural springs

Avoid water with floating material, an odor or dark color. Use saltwater only if you distill it first. You should not drink floodwater. Three Ways to Purify Water: In addition to having a bad odor and taste, contaminated water can contain microorganisms that cause diseases such as dysentery, typhoid, and hepatitis. You should purify all water of uncertain purity before using it for drinking, food preparation, or hygiene. There are many ways to purify water. None is perfect. Often the best solution is a combination of methods. Two easy purification methods are outlined below. These measures will kill most microbes but will not remove other contaminants such as heavy metals, salts, and most other chemicals. Before purifying, let any suspended particles settle to the bottom, or strain them through layers of paper towel or clean cloth. Boiling Boiling is the safest method of purifying water. Bring water to a rolling boil for 1 minute, keeping in mind that some water will evaporate. Let the water cool before drinking.

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Boiled water will taste better if you put oxygen back into it by pouring the water back and forth between two clean containers. This will also improve the taste of stored water. Disinfection You can use household liquid bleach to kill microorganisms. Use only regular household liquid bleach that contains 5.25 percent sodium hypochlorite. Do not use scented bleaches, colorsafe bleaches or bleaches with added cleaners. Add 16 drops of bleach per gallon of water, stir, and let stand for 30 minutes. If the water does not have a slight bleach odor, repeat the dosage and let stand another 15 minutes. The only agent used to purify water should be household liquid bleach. Other chemicals, such as iodine or water treatment products sold in camping or surplus stores that do not contain 5.25 percent sodium hypochlorite as the only active ingredient, are not recommended and should not be used. While the two methods described above will kill most microbes in water, distillation will remove microbes that resist these methods, and heavy metals, salts and most other chemicals. Distillation Distillation involves boiling water and then collecting the vapor that condenses back to water. The condensed vapor will not include salt and other impurities. To distill, fill a pot halfway with water. Tie a cup to the handle on the pot's lid so that the cup will hang right-side-up when the lid is upside-down (make sure the cup is not dangling into the water) and boil the water for 20 minutes. The water that drips from the lid into the cup is distilled. Hidden Water Sources in the Home: If a disaster catches you without a stored supply of clean water, you can use the water in your hot-water tank, pipes, and ice cubes. As a last resort, you can use water in the reservoir tank of your toilet (not the bowl). Do you know the location of your incoming water valve? You'll need to shut it off to stop contaminated water from entering your home if you hear reports of broken water or sewage lines. To use the water in your pipes, let air into the plumbing by turning on the faucet in your house at the highest level. A small amount of water will trickle out. Then obtain water from the lowest faucet in the house. To use the water in your hot-water tank, be sure the electricity or gas is off, and open the drain at the bottom of the tank. Start the water flowing by turning off the water intake valve and turning on a hot-water faucet. Do not turn on the gas or electricity when the tank is empty. Food: Short - Term Supplies:

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Even though it is unlikely that an emergency would cut off your food supply for two weeks, you should prepare a supply that will last that long. The easiest way to develop a two-week stockpile is to increase the amount of basic foods you normally keep on your shelves. Storage Tips       

Keep food in a dry, cool spot-a dark area if possible. Keep food covered at all times. Open food boxes or cans carefully so that you can close them tightly after each use. Wrap cookies and crackers in plastic bags, and keep them in tight containers. Empty opened packages of sugar, dried fruits, and nuts into screw-top jars or air-tight cans to protect them from pests. Inspect all food for signs of spoilage before use. Use foods before they go bad, and replace them with fresh supplies, dated with ink or marker. Place new items at the back of the storage area and older ones in front.

Nutrition Tips During and right after a disaster, it will be vital that you maintain your strength. So remember:    

Eat at least one well-balanced meal each day. Drink enough liquid to enable your body to function properly (two quarts a day). Take in enough calories to enable you to do any necessary work. Include vitamin, mineral, and protein supplements in your stockpile to assure adequate nutrition.

Food Supplies When Food Supplies Are Low If activity is reduced, healthy people can survive on half their usual food intake for an extended period and without any food for many days. Food, unlike water, may be rationed safely, except for children and pregnant women. If your water supply is limited, try to avoid foods that are high in fat and protein, and don't stock salty foods, since they will make you thirsty. Try to eat salt-free crackers, whole grain cereals, and canned foods with high liquid content. You don't need to go out and buy unfamiliar foods to prepare an emergency food supply. You can use the canned foods, dry mixes, and other staples on your cupboard shelves. In fact, familiar foods are important. They can lift morale and give a feeling of security in time of stress. Also, canned foods won't require cooking, water or special preparation. Following are recommended short-term food storage plans: Special Considerations: As you stock food, take into account your family's unique needs and tastes. Try to include

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foods that they will enjoy and that are also high in calories and nutrition. Foods that require no refrigeration, preparation, or cooking are best. Individuals with special diets and allergies will need particular attention, as will babies, toddlers, and elderly people. Nursing mothers may need liquid formula, in case they are unable to nurse. Canned dietetic foods, juices, and soups may be helpful for ill or elderly people. Make sure you have a manual can opener and disposable utensils. And don't forget nonperishable foods for your pets. Shelf-life of Foods for Storage: Here are some general guidelines for rotating common emergency foods. 





Use within six months: o Powdered milk (boxed) o Dried fruit (in metal container) o Dry, crisp crackers (in metal container) o Potatoes Use within one year: o Canned condensed meat and vegetable soups o Canned fruits, fruit juices and vegetables o Ready-to-eat cereals and uncooked instant cereals (in metal containers) o Peanut butter o Jelly o Hard candy and canned nuts o Vitamin C May be stored indefinitely (in proper containers and conditions): o Wheat o Vegetable oils o Dried corn o Baking powder o Soybeans o Instant coffee, tea and cocoa o Salt o Non-carbonated soft drinks o White rice o Bouillon products o Dry pasta o Powdered milk (in nitrogen-packed cans)

If the Electricity Goes Off: FIRST, use perishable food and foods from the refrigerator. THEN, use the foods from the freezer. To minimize the number of times you open the freezer door, post a list of freezer contents on it. In a well-filled, well-insulated freezer, foods will usually still have ice crystals in their centers (meaning foods are safe to eat) for at least three days. FINALLY, begin to use non-perishable foods and staples.

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How to Cook If the Power Goes Out: For emergency cooking you can use a fireplace, or a charcoal grill or camp stove can be used outdoors. You can also heat food with candle warmers, chafing dishes, and fondue pots. Canned food can be eaten right out of the can. If you heat it in the can, be sure to open the can and remove the label first. Disaster Supplies Emergency Supplies It's 2:00 a.m. and a flash flood forces you to evacuate your home fast. There's no time to gather food from the kitchen, fill bottles with water, grab a first-aid kit from the closet and snatch a flashlight and a portable radio from the bedroom. You need to have these items packed and ready in one place before disaster strikes. Pack at least a three-day supply of food and water, and store it in a handy place. Choose foods that are easy to carry, nutritious and ready-to-eat. In addition, pack these emergency items:       

Medical supplies and first aid manual n Money and matches in a waterproof Hygiene supplies container Portable radio, flashlights and n Fire extinguisher extra batteries n Blanket and extra clothing Shovel and other useful tools Infant and small children's needs (if appropriate) Household liquid bleach to purify drinking water. Manual can opener

Learn More The Federal Emergency Management Agency's Community and Family Preparedness Program and the American Red Cross Community Disaster Education Program are nationwide efforts to help people prepare for disasters of all types. For more information, please contact your local emergency management office and American Red Cross chapter. Inspecting Utilities In A Damaged Home Check for gas leaks--If the smell of gas or a blowing or hissing sound is detected, open a window and quickly leave the building. Turn off the gas at the outside main valve if possible and call the gas company from a neighbor's home. If gas is turned off for any reason, it must be turned back on by a professional. Look for electrical system damage--If sparks or broken or frayed wires are seen, or there is the smell of hot insulation, turn off the electricity at the main fuse box or circuit breaker. Call an electrician for advice before stepping in water to reach the fuse box or circuit breaker. Check for sewage and water line damage--If damage to the sewage lines is suspected, avoid using the toilets, and call a plumber. If water pipes are damaged, contact the water company and avoid the water from the tap. Safe water can be obtained by melting ice cubes.

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National Flood Insurance Program Glossary of Terms It is common for an insurance program or policy to use words or terms, which have a special meaning. This is true of the National Flood Insurance Program and its forms. In order to have a better understanding of the NFIP, we’ve collected a list of terms used by the flood program. Many of the terms appear in the definitions sections of the NFIP policies. Please refer to the applicable policy to be certain of the exact meaning when analyzing or interpreting coverages, conditions, etc. A (p) appears after each word or term that is actually defined in the flood policies. -AAcronyms - please refer to Addendum I on NFIP commonly used acronyms. Acre-foot - a measurement of reservoir water storage. An acre-foot covers an acre one foot deep and contains 325,900 gallons. Act (p) - means the National Flood Insurance Act of 1968 as well as any and all changes to the Act made since its introduction. Actual Cash Value (p) - this term refers to the full replacement cost of an item, minus the amount of physical depreciation at the time a covered loss (flood) occurs. Alluvial Fan - a fan-shaped deposit of sand, mud, or other materials. Alluvium - sand, mud, and other materials that are deposited by flowing water. Application (p) - means the written statement the insured person completed and signed for the purpose of getting a flood policy and which FEMA relied upon to issue the coverage. The application must be signed by either the insured or by an agent. IMPORTANT: the application is considered part of the policy; so any inaccurate statements may, if discovered, either alter the premium or, more seriously, void coverage. ASFPM - see Association of State Flood Plain Managers. Association (p) - refers to the persons (unit-owners) who manage the condominium building occupied by a covered condominium unit owner. Association of State Flood Plain Managers - this is an organization of specialists with expertise in the flood peril. This group focuses upon mitigating flood losses, managing floodplains, the National Flood Insurance Program, and flood preparedness, warning and recovery. -BBase flood (p) - for any given community or area, the flood that becomes the standard of measurement of a covered occurrence. Specifically, the flood that has a probability of one percent of being either equaled or exceeded.

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Basement (p) - refers to ANY area of a covered building, which has a floor that is below ground level (subgrade) on all sides. (Editor’s note: it is important to understand that absolutely any area that is subgrade on all sides is, by policy definition, a basement; this applies even if the area is a sunken portion of a ground level floor or even if the area is completely "finished.") Boil - a danger point on the landward side of a levee where water is seeping under; threatening to breach. Building (p) - this definition includes a defined term, "walled and roofed structure.” As far as the flood policy is concerned, a building may include:    

Walled and roofed structures (as defined) which are primarily above the ground and are permanently attached to the ground Manufactured homes on a permanent foundation Mobile homes on a permanent foundation Walled and roofed building that is being built, altered or repaired.

Bypass - an area of low-lying ground, commonly farmland, that carries floodwater downstream when rivers reach their flow capacities. -CCancellation (p) - refers to coverage that terminates before the policy’s ending date. Coastal Barriers - landscape features such as fringing mangroves, tombolos, barrier islands, barrier spits, and bay barriers which protect the mainland, lagoons, wetlands and salt marshes from the damaging effects of full force wind, wave and tidal energy. These areas frequently attract land development for resort and recreational use because of their climate and natural beauty. Coastal Barrier Resources Act. The - the Coastal Barrier Resources Act of 1982 prohibits the use of federal development assistance, including federal flood insurance, on property included in the System. While the act does not prevent property in coastal barriers from being developed, it helps to slow or discourage development by prohibiting the use of federal funds, including insurance and loans, from being used to build new property or replace or repair damaged property. Coastal Barrier Resources System - the Coastal Barrier Resources System consists of coastal barrier units delineated on maps adopted by Congress and, originally, created by the Coastal Barrier Resources Act of 1982. Coastal High Hazard Area (p) - If there is any area that is prone to experience dangerous waters such as tsunamis (tidal waves) or hurricane-stirred waters; qualifies as coastal highhazards. Community Status Book - each state and U.S. Territory has a status book that identifies which communities are participants in the NFIP, including whether the community is in the regular or emergency program.

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Community Rating System - this is a rating plan, which recognizes a community’s voluntary efforts to manage their exposure to being flooded. Communities that are active in activities such as Mapping and Regulations, Flood Damage Reduction, Flood Preparedness or Public Awareness, "receive" reductions in their flood insurance premiums. The CRS uses discounts that run in five percent increments, from five percent to 45 percent. Similar to a fire protection class plan, CRS class ratings range from Ten to One (all communities start out as a "Ten") and the higher a community’s flood protection activity, the lower its Class rating. Condominium (p) - refers to any multi-unit residential structures where the single-units are individually owned and the group of owners share equal interest in the building’s outer structure and any common property areas. Condominium Association Policy (p) - means a valid National Flood Insurance Policy that is sold to cover a group of owners who belong to a condominium association. Cover America - is the name of a nationwide marketing and advertising campaign. It was begun by the FIA in 1995 with the intent to increase participation in the flood program for both insurance companies and consumers by creating greater awareness of the flood program. Cubic feet per second - a common way to measure water flows. A cubic foot of water is 7.48 gallons. One cubic foot per second is 450 gallons per minute and accumulates 1.98 acre-feet per day. -DDanger stage: - in reference to rivers with levees, this occurs when the river is one foot above flood stage. There is danger to life and property in the event of a levee failure. Declarations Page (p) - the policy coverage page that summarizes the coverage provided by the policy and includes the identifying information on the insured and the covered property as supplied by the policy application. Note that the definition says that the declarations must be computer-generated, which must mean that hand-written or typed declarations would not qualify as declaration pages. Direct Physical Loss By or From Flood (p) - any direct physical damage to covered property that is caused by flooding. Dwelling (p) - includes residences designed for up to four families and single condo-units. -EElevated Building (p) - any building with its lowest floor existing above the ground. The lowest floor may be supported by walls (foundation or shear) posts, piers or similar items. Elevation Certificate - An elevation certificate is a document provided by a certified Surveyor showing actual elevation measurements taken on-site. This document is a requirement when applying for a LOMA or LOMR. Emergency Program Community (p) - any community that has limited flood coverage available as prescribed by a Flood Hazard Boundary Map.

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Expense Constant (p) - the policy expense fee portion of the flood insurance premium. The fee covers the government’s cost of writing and issuing flood policies. Expiration Date (p) - the ending date of a flood policy’s term of coverage. -FFederal policy fee (p) - a fixed amount that is charged each policy term to pay for government flood program costs that are NOT covered by the expense constant. Further, this charge is not considered when determining commissions, expense allowance or state/local taxes. FEMA - acronym for Federal Emergency Management Agency, a federal agency which oversees the National Flood Insurance Program. FEMA Standard Form - a standard form created by FEMA upon which all Flood Zone Determination reports must be submitted. FIA - Federal Insurance Administration is the government entity which operates the National Flood Insurance Program, including coordinating the participation of member and inquiring communities. Flash Flood Warning - a flood warning issued for life and/or property threatening flooding that will occur within 6 hours. It could be issued for rural or urban areas as well as for areas along the major rivers. Very heavy rain in a short period of time can lead to flash flooding, depending on local terrain, ground cover, degree of urbanization, amount of man-made changes to the natural river banks, and initial ground or river condition. Dam breaks or ice jams can also create flash flooding. Flood (p) - refers to normally dry areas which have temporarily been covered in whole or in part by overflowing inland or tidal waters, rapid run-off of surface waters (such as heavy rains), mud (flows or slides) or waters present due to the collapse or subsidence of shores However, the collapse or subsidence must be due to the action of water, such as erosion. Flood Fringe Areas - the remaining portion of the one hundred (100) year floodplain in those areas identified as an AE Zone in the FEMA Flood Insurance Study. Flood Insurance Rate Map - (FIRM) a map that is first developed for a community that has chosen to participate in the NFIP. The FIRM establishes the community’s various flood zones, applicable base flood elevations and the insurance rates which apply to homes within the community. The FIRM shows areas within the 100-year flood boundary, which are termed "Special Flood Hazard Areas (SFHAs).” A "100-year flood" does not refer to a flood that occurs every 100 years, but refers to a flood level with a I percent or greater chance of being equaled or exceeded in any given year. Areas between the 100-year and 500-year flood boundaries are termed "moderate flood hazard areas.” The remaining areas are above the 500-year flood level and are termed "minimal flood hazard areas." Flood Hazard Boundary Map - official map of a community which identifies the boundaries of the flood, mudslide, mudflow, and related erosion areas having special hazards.

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Floodplain Area - a relatively flat or low land area which is subject to partial or complete inundation from an adjoining or nearby stream, river or watercourse; and/or any area subject to the unusual and rapid accumulation of surface waters from any source. Flood proofing - any combination of structural and nonstructural additions, changes or adjustments to structures which reduce or eliminate flood damage to real estate or improved real property, water and sanitary facilities, structure, and their contents. Flood Warning - a warning that gives the expected severity of flooding (minor, moderate or major) and may include information on when and where flooding will begin. Flood Watch - indicates that widespread flooding is a possibility in or close to the watch area. These watches are issued for flooding that is expected to occur 6 to 12 hours after the heavy rains have ended. Flood Way Area - actual stream or drainage channel subject to periodic inundation by water and identified as an AE ZONE in the FEMA Flood Insurance Study. FMSIS - Flood Map Status Information System. A software package which is available from FEMA. The system encourages the use of updated flood map panels and monitors community status. FPI - Force Placed Insurance. Flood Stage: - in reference to rivers with levees, when flows reach maximum design capacity, with a minimum of three feet to the top of levees. Flood Zones - areas with distinct characteristics regarding their exposure to flood losses. The zones are: A A1-30 A99 AE AH AO AR AR/A AR/A1-30 AR/AE AR/AH AR/AO EMV V1-30 VE VO FZD - Flood Zone Determination Flood Zone Determination Companies - literally, businesses which, for a fee, assist interested parties in determining a property’s applicable flood zone. -G,HNo entries -IImprovements (p) - includes any additional structural features that are part of either a building or a single condo unit. -J-

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JFR - the Joint Final Rule is intended to make uniform all regulations and guidelines for implementing the statutory requirements of the National Flood Insurance Reform (or 1994) Act. This Rule was required by statute and establishes:     

New escrow requirements for flood insurance premiums. Requirements for Lenders and Servicers to "force place" coverage. Updated requirements for notices to Borrowers, Servicers, and Insurance Providers. New authority for Lenders to charge fees for flood zone determinations. Miscellaneous provisions necessary to implement the 1994 Act.

-KNo entries -LLevee: an embankment of earth along a riverbank designed to protect low-lying land from flooding. Life of Loan Report - a determination that is tracked for future map panel revisions. Changes that occur after the initial document are automatically reported. LOMA - Letter Of Map Amendment. Describes FEMA’s reviewing the accuracy of a current effective panel to determine if a structure was incorrectly placed within a SFHA. A LOMA amends the current effective FEMA map and establishes that the property is not in a SFHA. LOMR - a LOMR is an official revision to the current effective FEMA map. It is used to change flood zones, floodplain and floodway delineations, flood elevations, and other features. A LOMR is usually followed by a physical map revision. -MManufactured home (p) -means either a mobile home attached to a permanent foundation or a residence that is built at a remote location and then transported and permanently installed at its current site. Mobile home (p) - is defined to be a "manufactured home." National Flood Insurance Program (p) - means the flood coverage and land management program originally authorized and subsequently amended as the National Flood Insurance Act of 1968. -NNN - a community which is NOT participating in the NFIP and has no published flood hazard map panel. NSFHA - No Special Flood Hazard Areas

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-ONo entries -PPartial Determination - a flood zone determination which cannot be accurately completed until a Survey or Site plan is forwarded. Policy (p) - refers to the set of documents including the actual flood policy, declarations page and application; as well as any coverage supplements (endorsements) and renewal certificates. Post-FIRM building (p) - any building started, built, or experiencing substantial improvement after either 12/1/74 or the date that its community’s initial FIRM (Flood Insurance Rate Map) became effective. Pre-FIRM rated building (p) - any building started, built, or experiencing substantial improvement before either 12/1/74 or before the date that its community’s initial FIRM (Flood Insurance Rate Map) became effective. Probation Additional Premium (p) - refers to an additional, flat, charge that’s made for every term for a policy covering a property located in a community that has been placed under probation. In essence, a premium surcharge that results from any deficiency that created the probation action. Project Impact - this project focuses on preventing flood damage by building stronger, safer communities before disaster strikes and encouraging the involvement of citizens, community organizations, business and industry, all levels of government and the media. -QNo entries -RRegular Program Community (p) - any community that has a FIRM and has full flood coverage available at regular premiums. Repetitive Loss Structure (p) - any eligible building covered by a flood policy under the Act’s provisions for property that has suffered more than one flood loss and the loss amount was more than 25% of the property’s market value. The special coverage lasts for ten years after the occurrence to the 2nd flood loss. Residential condominium building (p) - refers to a building that belongs to a condominium association IF at least 75% of the building’s floor area is residential. -SSloughing - an area of levee that sustains loss of material from its top or side.

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Special hazard area (p) - an area that is particularly vulnerable to flood damages AND which is designated with a special zoning code on either a FHBM or a FIRM. -TNo entries -UUnit (p) - a single dwelling unit that is part of a condominium building which is individually owned by a flood policyholder. -VValued policy (p) - this term refers to a flood policy that has a limit of insurance that was determined as a mutually agreed-upon amount to be paid if the insured suffers a total flood loss. -WWalled and Roofed (p) - refers to a building that is anchored in order to withstand pressures against floating, lateral movement and collapse AND which has at least a roof and two rigid, exterior walls. Warning stage - in reference to rivers with levees, when patrol of levees is mandatory, or when river flows are diverted through weirs into bypass areas. Weir - a gate on the bank that allows floodwater into a bypass. WYO - see Write Your Own. Write Your Own - program under which policyholders get their insurance directly from private insurance companies rather than going directly to NFIP. Write Your Own companies write and service about 90 percent of flood insurance policies for NFIP. You pay the same amount whether you buy it from the government or a company. -X, Y,ZNo entries NFIP Commonly Used Acronyms

A Key To The Acronyms Used by NFIP APA - American Planning Association BFE - Base Flood Elevation BPAT - Building Performance Assessment Team CAC - Community Assistance Contact CAP - Community Assistance Program CAV - Community Assistance Visit CBRS - Coastal Barrier Resources System

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CFR - Code of Federal Regulations CRS - Community Rating System CTP - Cooperative Technical Partners DFIRM - Digital Flood Insurance Rate Map DMA - Disaster Mitigation Act of 2000 EMI - Emergency Management Institute E.O. - Executive Order FEMA - Federal Emergency Management Agency FIA - Federal Insurance Administration FIMA - Federal Insurance and Mitigation Administration FIRM - Flood Insurance Rate Map FIS - Flood Insurance Study FMA - Flood Mitigation Assistance program GSE - Government-Sponsored Enterprise HMGP - Hazard Mitigation Grant Program HUD - Housing and Urban Development (Department of) ICC - Increased Cost of Compliance LOMA - Letter of Map Amendment LOMR - Letter of Map Revision LOMR-F- Letter of Map Revision based on Fill NFIP - National Flood Insurance Fund NFIP - National Flood Insurance Program NFIRA - National Flood Insurance Reform Act OMB - Office of Management and Budget RCBAP - Residential Condominium Building Association Policy OPAs - Otherwise Protected Areas SFHA - Special Flood Hazard Area SFIP - Standard Flood Insurance Policy TB - Technical Bulletin WYO - Write-Your-Own Here are some of the common acronyms used in the National Flood Insurance Program: ANI - Area Not Included BFE - Base Flood Elevation COBRA - Coastal Barrier Resources Act CBRS - Coastal Barrier Resources System CLOMA - Conditional Letter of Map Amendment CLOMR - Conditional Letter of Map Revision CLOMR-F - Conditional Letter of Map Revision Based on Fill CCO - Consultation Coordination Officer CRS - Community Rating System

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DLG - Digital Line Graph ERM - Elevation Reference Mark ESDP - Engineering Study Data Package FBFM - Flood Boundary and Floodway Map FDPA - Flood Disaster Protection Act FDT - Floodway Data Table FEMA - Federal Emergency Management Agency FFED - Final Flood Elevation Determination FHBM - Flood Hazard Boundary Map FIA - Federal Insurance Administration FIRM - Flood Insurance Rate Map FIS - Flood Insurance Study FOIA - Freedom of Information Act GIS - Geographic Information System GPO - Government Printing Office HEC - Hydrologic Engineering Center ICC - Increased Cost of Compliance LAG - Lowest Adjacent Grade (to a structure) LFD - Letter of Final Determination LMMP - Limited Map Maintenance Program LODR - Letter of Determination Review LOMA - Letter of Map Amendment LOMC - Letter of Map Change LOMR - Letter of Map Revision LOMR-F - Letter of Map Revision Based on Fill MSC - Map Service Center

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MT - Mitigation Directorate NAVD - North American Vertical Datum of 1988 NFIP - National Flood Insurance Program NFIRA - National Flood Insurance Reform Act NGVD - National Geodetic Vertical Datum of 1929 OPA - Otherwise Protected Area PMR - Physical Map Revision PRP - Preferred Risk Policy RCBAP - Residential Condominium Building Association Policy SFHA - Special Flood Hazard Area SFHDF - Standard Flood Hazard Determination Form TEC - Technical Evaluation Contractor WYO Write Your Own

NFIP Flood Zone Explanations The National Flood Insurance Program uses a number of zones for assigning an area’s vulnerability to loss by flooding. Here is an explanation of the flood zone designations used by FEMA: NFIP Flood Zones I. Areas Having An Annual Probability of Flooding of 1% or greater A Subject to 100-year flood. Base flood elevation undetermined. AE or A1-A30 Both AE and A1-A30 represent areas subject to 100-year flood with base flood elevation determined. AH Subject to 100-year shallow flooding (usually areas of ponding) with average depth of 1-3 feet. Base flood elevation determined. AO Subject to 100-year shallow flooding (usually sheet flow on sloping terrain) with average depth of 1-3 feet. Base flood elevation undetermined.

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AOVEL Alluvial fan subject to 100-year shallow flooding (usually sheet flow o sloping terrain) for which average flood depths and velocities have been determined. Average flood depth of 1-3 feet. A99 Subject to 100-year flood, with federal flood protection system (levee/dam) under construction. Base flood elevation undetermined. AR Previously accredited flood protection system has been decertified and is in the process of being restored to provide a 100-year or greater level of flood protection. V Subject to 100-year flood and additional velocity hazard (wave action). Base flood elevation undetermined. VE or V1-V30 Both VE and V1-V30 represent areas subject to 100-year flood and additional velocity hazard (wave action). Base flood elevation determined. In SFHA Areas in a "Special Flood Hazard Area" (or 100-year flood plain). Subject to 1% annual chance flooding. No distinctions have been made between the different flood hazard zones that may be included within the SFHA. Flood Prone Area An area designated as a "Flood Prone Area" on a map prepared by USGS and the Federal Insurance Administration. This area has been delineated based on available information on past floods. This is an area inundated by 1% annual chance flooding for which no base flood elevations have been determined. II. Areas Having An Annual Probability of Flooding of 0.2% - 1% B or X500 Both B and X500 represent areas between the limits of the 100-year and 500-year flood; or certain areas subject to 100-year flood with average depths less than 1 foot or where the contributing drainage area is less than 1 square mile; or areas protected by levees from the 100-year flood. III. Annual Probability of Flooding of Less than 0.2% C or X Both C and X represent areas outside the 500-year flood plain with less than 0.2% annual probability of flooding. IV. Annual Probability of Flooding of Less than 1% No SFHA Areas outside a "Special Flood Hazard Area" (or 100-year flood plain). Can include areas inundated by 0.2% annual chance flooding; areas inundated by 1% annual chance flooding with average depths of less than 1 foot or with drainage areas less than 1 square mile; areas protected by levees from 1% annual chance flooding; or areas outside the 1% and 0.2% annual chance floodplains. V. Undetermined D. Unstudied areas. Flood hazards are undetermined.

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NFIP REGIONAL OFFICES REGIONAL OFFICES

TERRITORY

REGIONAL OFFICES

TERRITORY

Region I 140 Wood Road Suite 200 Braintree, MA 02184 (781) 848–1908 (781) 356–4142 (Fax)

Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont

Region VI 15835 Park Ten Place Suite 108 Houston, TX 77084 (281) 829–6880 (281) 829–6879 (Fax)

Arkansas, Louisiana, New Mexico, Oklahoma, Texas

Region II New Jersey, 33 Wood Avenue, South New York Suite 600 Iselin, NJ 08830 (732) 603–3875 (732) 321–6562 (Fax)

Region VII Iowa, Kansas, 601 North Mur-Len Missouri, Nebraska Road Suite 13-B Olathe, KS 66062–5445 (913) 780–4238 (913) 780–4368 (Fax)

Region III 1930 East Marlton Pike Building T, Suite 13 Cherry Hill, NJ 08003– 4219 (856) 489–4003 (856) 751–2817 (Fax)

Delaware, District of Columbia, Maryland, Pennsylvania, Virginia, West Virginia

Region VIII 2801 Youngfield Street Suite 300 Golden, CO 80401 (303) 275–3475 (303) 275–3471(Fax)

Region IV 1532 Dunwoody Village Pkwy. Suite 200 Dunwoody, GA 30338 (770) 396–9117 (770) 396–7730 (Fax)

Alabama, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee

Region IX Arizona, California, 5777 Madison Ave. Guam, Hawaii, Suite 810 Nevada Sacramento, CA 95841 (916) 334–1720 (916) 334–1676 (Fax)

Region IV–Tampa Florida 8875 Hidden River Parkway Suite 300 Tampa, FL 33637 (813) 975–7451 (813) 975–7471 (Fax) Region V 1111 E. Warrenville Road Suite 209 Naperville, IL 60563 (630) 577–1407 (630) 577–1437 (Fax)

Colorado, Montana, North Dakota, South Dakota, Utah, Wyoming

Region X Alaska, Idaho, 19125 Northcreek Pkwy. Oregon, Washington Suite 108 Bothell, WA 98011 (425) 488–5820 ext. 4437 (425) 488–5011 (Fax)

Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin

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FEMA and NFIP Regional Offices The Federal Emergency Management Agency and the National Flood Insurance Programs currently operate in the following regions: Region One Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island, and Vermont FEMA Mitigation Division J. W. McCormack Post Office and Courthouse Building Boston, MA 02109-4595 (617) 223-9561 NFIP 140 Wood Road Suite 200 Braintree, MA 02184 (781) 848-1908 Region Two New Jersey and New York FEMA Mitigation Division 26 Federal Plaza New York, NY 10278-0002 (212) 225-7200 NFIP 33 Wood Avenue S. Suite 600 Iselin, NJ 08830 (732) 603-3875 Region Two S Puerto Rico and the Virgin Islands FEMA Mitigation Division PO Box 70105 San Juan, PR 00936 (787) 729-7600 NFIP 1407 J.T. Pinero Caparra Terrace, PR 00921 (787) 782-2733 Region Three

District of Columbia, Delaware, Maryland, Pennsylvania, Virginia and West Virginia FEMA Mitigation Division Liberty Square Building 105 South Seventh St. Philadelphia, PA 19106-3316 (215) 931-5512 NFIP 1930 E. Marlton Pike Suite T-9 Cherry Hill, NJ 08003-4219 (856) 489-4003 Region Four Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee FEMA Mitigation Division 3003 Chamblee-Tucker Rd Room 270 Atlanta, GA 30341 (770) 220-5400 NFIP 1532 Dunwoody Village Parkway Suite 200 Dunwoody, GA 30338 (770) 396-9117 Region Five Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin FEMA Mitigation Division 536 S. Clark St. Chicago, IL 60605-1521 (312) 408-5200 NFIP 1111 E. Warrenville Rd Suite 209

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Naperville, IL 60563 (630) 577-1407 Region Six Arkansas, Louisiana, New Mexico, Oklahoma, and Texas FEMA Mitigation Division Federal Regional Center 800 North Loop 288 Denton, TX 76201-3698 (940) 898-5165 NFIP 11931 Wickchester Rd Suite 304 Houston, TX 77043 (281) 531-5990 Region Seven Iowa, Kansas, Missouri, and Nebraska FEMA Mitigation Division 2323 Grand Boulevard Kansas City, MO 64108-2670 (816) 283-7002 NFIP 601 N. Mur-Len Rd. Suite 13-B Olathe, KS 66062 (913) 780-4238 Region Eight Colorado, Montana, North Dakota, South Dakota, Utah and Wyoming FEMA Mitigation Division Denver Federal Center Building

PO Box 25267 Denver, CO 80225-0267 (303) 235-4830 NFIP 2801 Youngfield Street Suite 300 Golden, CO 80401 (303) 275-3475 Region Nine Arizona, California, Guam, Hawaii, and Nevada FEMA Mitigation Division Presidio of San Francisco Building 105 San Francisco, CA 94129-1250 (415) 923-7175 NFIP 5777 Madison Avenue Suite 810 Sacramento, CA 95841 (916) 334-1720 Region Ten Alaska, Idaho, Oregon and Washington FEMA Mitigation Division Federal Regional Center 130 228th Street, S.W. Bothell, WA 98021-9796 (425) 487-4678 NFIP 1611 116th Avenue, NE Suite 116 Bellevue, WA 98004 (425) 646-4908

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STATE NFIP COORDINATORS Alaska Christy L. Miller Alaska Dept. Of Comm. & Reg. Affairs 333 W 4th Ave Ste 220 Anchorage, AK 99501-2341 907-269-4567 / Fax: 907-269-4539 Alabama Chuck Sanders Alabama Emergency Mgt. Agency Alabama State House Ste 47 PO Drawer 301701 Montgomery, AL 36130-1701 334-353-5731 / Fax: 334-353-4437 Arkansas Jason C Donham Arkansas Soil & Water Conserv 101 E Capitol Ste 350 Little Rock ,AR 72201 501-682-3907 / Fax: 501-682-3991 Arizona William C Jenkins Arizona Dept. Of Water Resources 500 N Third St. 2nd Floor Phoenix, AZ 85004-3903 602-417-2445 X7200 / Fax: 602-417-2423 California Andrew S Lee CA Dept.Of Water Resources 1416 9th St. Room 1623 Sacramento, CA 95814 916-653-8089 / Fax: 916-653-3639 Colorado Brian Hyde CO Water Conservation Board 721 State Centennial Bldg. 1313 Sherman Denver, CO 80203 303-866-3441 / Fax: 303-866-4474 Connecticut Scott Choquette CT Dep Of Env. Prot.-Iwrd 79 Elm St. Hartford, CT 06106-5127

860-424-3706 / Fax: 860-424-4075 Delaware Michael S Powell Delaware Div. Of Soil & Water 89 Kings Hwy. Dover, DE 19901 302-739-4411 / Fax: 302-739-6724 District of Columbia Timothy Karikari Env Health Admin. Watershed Protection Division 2100 Martin Luther King Ave Se 307 Washington, D.C. 20020 202-645-6059 X3052 / Fax: 202-645-6063 Florida Charles H Speights Fl Dept. Of Community Affairs 2555 Shurmard Oak Blvd. Tallahassee, FL 32399-2100 850-413-9960 / Fax: 850-413-9857 Georgia Collis O Brown GA Dept. Of Natural Resources 7 Martin Luther King Jr. Drive Ste 440 Atlanta, GA 30334 404-656-3094 / Fax: 404-657-8535 Hawaii Sterling S. L. Yong Hi Dept. Of Land & Natural Res. 1151 Punchbowl St., Rm. 221 Honolulu, HI 96813 808-587-0248 / Fax: 808-587-0283 Iowa Bill Cappuccio Iowa Dept. Of Natural Resources Wallace State Office Bldg. Des Moines, IA 50319 515-281-8942 / Fax: 515-281-8895 Idaho Fred Eisenbarth Jr. Idaho Dept. Of Water Resources 1301 N. Orchard

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Boise, ID 83706 208-327-7993 / Fax: 208-327-7866

Baltimore, MD 21224 410-631-4164 / Fax: 410-631-3873

Illinois David R Boyce Illinois Dept. Natural Resources 524 S 2nd St. Springfield, IL 62701-1787 217-782-4435 / Fax: 217-524-1454

Massachusetts Richard Zingarelli MA Dem Flood Haz Mgt. Prog 100 Cambridge St. Boston, MA 02202 617-727-3267 X514 / Fax: 617-727-9402

Indiana Gregory Main Indiana Div. Of Water 402 W Washington St. Rm. W264 Indianapolis, IN 46204 317-232-4164 / Fax: 317-233-4579

Michigan George R Hosek MI Dept. Of Env. Quality 116 W. Allegan Lansing, MI 48933 517-335-3182 / Fax: 517-373-9965

Kansas A Samuel Sunderraj Water Structures Manager Kansas Dept. Of Ag Div. Of Water Resources 901 S Kansas Ave 2nd Floor Topeka, KS 66612-1283 785-296-8083 / Fax: 785-296-1176

Minnesota Gbazghi Sium, P.E. Minnesota DNR Waters 500 Lafayette Rd St. Paul, MN 55155-4032 651-296-0440 Fax 651-296-0445

Kentucky Tim Brooks Kentucky Division Of Water 14 Reilly Rd Frankfort, KY 40601 502-564-3410 / Fax: 502-564-9003 Louisiana Janet Griffin La Dept. Of Transportation & Dev PO Box 94245 Capitol Station Baton Rouge, LA 70804-9245 225-379-1408 / Fax: 225-379-1857 Maine W Louis Sidell State Planning Office 38 State House Station Augusta, ME 04333-0038 207-287-8063 / Fax: 207-287-6489 Maryland William F Parrish Jr. Maryland Dept. Of Env - Tarsa 2500 Broening Hwy.

Mississippi Al W. Goodman Ms Emergency Mgmt Agency PO Box 4501 Jackson, MS 39296-4501 601-960-9973 / Fax: 601-360-0942 Missouri George Riedel MO Emergency Mgmt Agency PO Box 116 Jefferson City, MO 65102 573-526-9141 / Fax: 573-526-9198 Montana Karl Christians MT Dam Safety Program 48 N Last Chance Gulch Helena, MT 59620-1601 406-444-6654 / Fax: 406-444-0533 Nebraska Dayle Williamson NE Natural Res. Commission 301 Centennial Mall South Lincoln, NE 68509-4876 402-471-3936 / Fax: 402-471-3132

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Nevada Jeanne M. Ruefer Division Of Water Planning Flood Management Program 1550 E College Pkwy Ste 142 Carson City, NV 89704 775-687-3600 X23/ Fax: 775-687-1288 New Hampshire George T Musler NH Office Of State Planning 107 Pleasant St. Concord, NH 3301 603-271-2231 / Fax: 603-225-7341 New Jersey Clark D Gilman NJ Dept. Of Env Protection PO Box 419 Trenton, NJ 8625 609-292-2296 / Fax: 609-984-1908 New Mexico Jerry- Lazzari New Mexico Emg Mgt. Center PO Box 1628 Santa Fe, NM 87504-1628 505-476-9681 / Fax: 505-471-5922 New York William Nechamen New York State Dept. Of Env Cons 50 Wolf Rd Rm. 388 Albany, NY 12233-3507 518-457-0833 / Fax: 518-485-7786 North Carolina Philip S Letsinger NFIP State Coordinator NC Div. Of Emergency Mgt. 116 W. Jones Raleigh, NC 27603-1335 919-733-3359 / Fax: 919-733-5408 North Dakota Jeff Klein ND State Water Commission 900 East Blvd. Ave Bismarck, ND 58505-0850 701-328-4898 / Fax: 701-328-3747

Ohio Cynthia J Crecelius Ohio Dept. Of Natural Res. 1939 Fountain Square Columbus, Oh 43224 614-265-6750 / Fax: 614-447-9503 Oklahoma William Ken Morris OK Water Resources Board 3800 N Classen Blvd. Oklahoma City, OK 73118 405-530-8800 / Fax: 405-530-8900 Oregon Ann Beier Dept. Of Land Cons & Dev 635 Capitol Street NE, Suite 200 Salem, OR 97301-2540 503-373-0050 X255/Fax: 503-378-6033 Pennsylvania Kerry Wilson Pa Dept. Of Comm. & Econ Dev 313 Forum Bldg. Harrisburg, PA 17120 717-720-7445 / Fax: 717-234-4560 Puerto Rico Jose R Caballero-Mercado Puerto Rico Planning Board Minillas Govt Center PO Box 41119 San Juan, PR 00940-9985 787-727-4444 / Fax: 787-724-3270 Rhode Island Pamela Pogue Riema Muri 645 New London Ave Cranston, RI 02920 401-874-6616 / Fax: 401-789-4670 South Carolina Lisa S Holland SC Dept. Of Natural Resources 2221 Devine Street Ste #222 Columbia, SC 29205 803-734-9120 / Fax: 803-734-9200 South Dakota

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Darrell Dvorak SD Division Of Emergency Management 500 E Capitol Pierre, SD 57501-5070 605-773-3239 / Fax: 605-773-3580 Tennessee Donald G Waller Tennessee Dept. Of Economic & Community Dev 320 Sixth Ave N 6th Floor Nashville, TN 37243-0405 615-741-2211 / Fax: 615-741-5070 Texas Mike Howard Texas Natural Resource Conservation Comm. PO Box 13087-Mc 160 Austin, TX 78711-3087 512-239-6135 / Fax: 512-239-4770 Utah Judy Watanabe Utah Div. Of Comp Emg Mgt. State Office Bldg. #1110 Salt Lake City, UT 84114 801-538-3750 / Fax: 801-538-3770 Vermont Karl Jurentkuff VT Dept. Of Env. Conservation Bldg. 10n 103 S Main St. Waterbury, VT 05671-0408 802-241-3770 / Fax: 802-241-3287

Virgin Islands Kenn Mason Dept. Of Planning & Natural Res. Fosters Plaza 396-1 Anna's Retreat St. Thomas, VI 00802 340-774-3320 / Fax: 340-774-5706 Washington Tim P D'acci Land Resources Prog Dept. Of Ecology PO Box 47600 Olympia, WA 98504-7600 360-407-6796 / Fax: 360-407-6904 West Virginia Albert M. Lisko Jr. WV Office Emer. Services 1900 Kanawha Blvd. Rm. Eb-80 Charleston, WV 25305-0360 304-558-5380 / Fax: 304-344-4538 Wisconsin Robert M Watson Wisconsin DNR 101 S. Webster Madison, WI 53707 608-266-8037 / Fax: 608-264-9200 Wyoming Alisa Sauvageot Wyoming Emg Mgt. Agency 5500 Bishop Blvd. Cheyenne, WY 82009-3320 307-777-4918 / Fax: 307-635-6017

Virginia Richard Dameron VA Dept. Of Conservation 203 Governor St. Ste 206 Richmond, VA 23219 804-371-6135 / Fax: 804-371-2630

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INDEX

1 100-year flood .15, 28, 33, 36, 136, 143, 144

A Accept .................................................... 110 Acronyms ....................................... 133, 140 Agreement ......................................... 51, 65 Aircraft ............................................... 88, 89 Animals ...................................... 46, 88, 123 Antennas.................................................. 70 Appraisal ................................................ 110 Appurtenant structures ....................... 22, 67 Articles ....................................... 65, 69, 109 Assessments ......................... 45, 69, 81, 82 Assignment ............................................ 101 Association ....50, 53, 55, 59, 68, 69, 73, 82, 83, 89, 91, 100, 109, 133, 135, 140, 141, 143 Average ........................................... 36, 144

B Base flood elevation ................. 36, 143, 144 Basement................................... 49, 53, 134 BFE.................................... 28, 29, 140, 141 Blanket ....................................... 22, 68, 132 Business ............................................ 19, 39

C Cancellation ............................. 54, 101, 134 Changes .......................................... 34, 138 Claims .................................................. 5, 25 Coastal Barrier Improvement Act ....... 24, 93 Coastal Barrier Resources Act .... 24, 46, 93, 134, 141 Commercial.............................................. 23 Communities .................. 17, 28, 31, 41, 135 Community.....13, 15, 17, 18, 21, 28, 30, 31, 39, 40, 56, 59, 132, 134, 135, 139, 140, 141, 148, 151 Community Rating System .. 13, 15, 40, 135, 141 Concealment .......................................... 100 Conditional ............................................. 141 Conditions .................. 65, 78, 106, 113, 117 Condominium .23, 45, 48, 50, 54, 55, 59, 68, 73, 82, 83, 100, 108, 135, 141, 143 Consumers .............................................. 25 Contents .............. 18, 19, 22, 45, 46, 49, 72 Contractor .............................................. 143

Coverage B ............ 71, 73, 82, 83, 102, 104 Coverage C ..............................................82 Coverages.............................. 18, 45, 65, 75 Credit ........................................... 7, 39, 127 CRS ................................... 40, 41, 135, 141

D Data .......................................................142 Debris .................................... 45, 74, 82, 94 DIC......................................... 117, 118, 119 Difference In Conditions .........................117 Digital ............................................. 141, 142 Disaster ... 10, 30, 39, 40, 48, 124, 125, 127, 132, 141 Documents ..................................... 108, 127 Dwelling Policy ....................... 50, 52, 60, 82

E Earthquake...............................................63 Education ...............................................132 Elevation ...... 21, 41, 76, 135, 140, 141, 142 Elevation certificate ..................................21 Eligibility ................................. 16, 48, 75, 76 Emergency .... 16, 17, 18, 19, 30, 34, 35, 39, 46, 48, 56, 75, 79, 92, 94, 99, 122, 126, 127, 128, 132, 135, 141, 148, 149, 150, 151 Emergency Program . 17, 18, 19, 34, 35, 46, 48, 56, 75, 79, 92, 94, 99, 135 Endorsement ..........................................120 Equipment ................................................70 Excluded ..................................................91 Exclusions ................................................79 Expense Constant ............................ 56, 136 Explosion .................................................63

F Federal disaster assistance ..... 6, 10, 11, 16, 30, 39 Federal Emergency Management Agency 4, 5, 12, 13, 16, 21, 34, 50, 51, 60, 124, 127, 132, 136, 141, 142, 146 Federal Housing Administration ......... 30, 39 Federal Insurance and Mitigation Administration ........................ 13, 16, 141 Federal lending ........................................39 Federal policy fee .. 15, 25, 48, 56, 101, 102, 136 Federal Response Plan ............................13

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FEMA ... 4, 5, 6, 7, 12, 13, 14, 16, 17, 18, 21, 25, 27, 30, 31, 32, 33, 34, 35, 38, 42, 45, 46, 50, 51, 53, 57, 58, 59, 76, 77, 78, 92, 116, 121, 133, 136, 137, 138, 141, 142, 143, 146, 147 FHBM ......... 17, 20, 35, 56, 59, 60, 140, 142 FIMA ................................ 5, 13, 16, 26, 141 Fire .................................... 62, 70, 126, 132 FIRM .. 14, 15, 16, 17, 18, 19, 20, 21, 23, 24, 25, 35, 36, 38, 58, 59, 94, 136, 139, 140, 141, 142 First aid kit ............................................. 122 FIS .............. 18, 19, 34, 35, 36, 37, 141, 142 Fixtures .............................................. 70, 71 Flood .. 4, 5, 6, 7, 8, 9, 10, 11, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 24, 25, 26, 30, 33, 34, 35, 37, 38, 39, 40, 41, 45, 46, 47, 48, 50, 55, 56, 57, 58, 59, 63, 69, 74, 80, 81, 92, 94, 99, 100, 105, 111, 117, 120, 121, 122, 123, 124, 133, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 149, 150 Flood Disaster Protection Act . 5, 15, 20, 142 Flood Insurance Manual................... 38, 100 Flood Insurance Study .. 18, 19, 34, 35, 136, 137, 141, 142 Flood maps ........................................ 21, 24 Flooding ................. 4, 36, 44, 113, 143, 144 Floodplain ...................... 27, 28, 79, 81, 137 Floodplain management............... 27, 79, 81 Floodproofing ........................................... 74 Floods ........................................................ 4 Floodwaters ........................................... 123 Forms ........................................................ 7 Foundations ............................................... 8 Fraud ..................................................... 100 Furs ......................................................... 73

G General Property...................................... 82 Government ...12, 14, 15, 26, 44, 56, 64, 65, 141, 142

H Hazard Mitigation Grant Program ..... 45, 141 Historic ..................................................... 27 HO 04 61 ................................................. 73 Home Repair Assistance.......................... 10 Homeowners ................................ 8, 11, 124

I ICC .................................... 45, 49, 141, 142 Improvements .................................. 57, 137

Increase ...................................................26 Increased Cost of Compliance .... 16, 45, 62, 74, 75, 76, 77, 79, 80, 81, 82, 141, 142 Individual ..................................................32 Inspect ...................................................130 Insurance Services Office ......................120 Insured ............... 51, 52, 56, 59, 60, 84, 108 Insurer ................................................ 51, 60 Internet ............................................... 21, 38 Inventory .......................................... 27, 127 ISO....................................... 8, 73, 118, 120

L Law ........................................................120 Laws ................................................ 62, 108 Lead .........................................................13 Letter of Map Amendment ........ 34, 141, 142 Liberalization ..........................................116 Limitations ................................................73 Limited ...................................................142 Loan ................................................. 39, 138 LOMA ....................... 34, 135, 138, 141, 142 Loss . 5, 9, 30, 45, 47, 55, 58, 61, 64, 80, 81, 83, 85, 107, 108, 109, 110, 111, 116, 135

M Mildew ......................................................63 Minimum ............................................ 28, 86 Minor ........................................................41 Mobile home .......... 22, 46, 54, 57, 134, 138 Moisture ...................................................63 Mold .........................................................63 Money ....................................................132 Mortgage .......................................... 40, 111 Mudslide...............................................8, 63

N National Flood Insurance Act .. 5, 12, 14, 47, 50, 51, 52, 56, 58, 84, 116, 133, 138 National Flood Insurance Program .... 4, 7, 9, 12, 13, 49, 50, 56, 58, 62, 69, 75, 84, 93, 96, 97, 99, 102, 103, 105, 115, 118, 120, 121, 124, 133, 136, 138, 141, 143, 146 NFIP . 4, 5, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 35, 36, 38, 39, 40, 41, 42, 45, 46, 48, 50, 75, 76, 80, 81, 93, 96, 100, 102, 106, 108, 114, 115, 116, 117, 121, 124, 133, 134, 136, 138, 140, 141, 143, 145, 146, 147, 148, 150 Non-owned ...............................................73 Non-residential .........................................75

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O Options .......................................... 108, 109 Our............................................. 51, 97, 108

P Package ................................................. 142 Partial .................................................... 139 Participating ........................................... 121 Performance .......................................... 140 Permanent ............................................... 70 Personal Property .................. 45, 71, 82, 83 Policies ............................................ 82, 114 Pollutants ................................................. 79 Pollution ............................................. 45, 79 Portfolio.................................................... 40 Post-FIRM................ 15, 23, 25, 58, 89, 139 Preferred Risk Policy.................. 48, 49, 143 Pre-FIRM ............14, 25, 29, 30, 58, 59, 139 Premium .................................... 49, 59, 139 Premiums................................................. 15 Printing .................................................. 142 Probation ......................................... 59, 139 Proof .......................................... 5, 110, 116 Provisions .............................. 65, 82, 98, 99

R Rates ............................... 24, 25, 48, 49, 75 RCBAP .............................. 23, 25, 141, 143 Reduce .............................................. 14, 41 Reformation ........................... 102, 103, 104 Refund ............................................. 25, 101 Regular Program. 17, 18, 19, 34, 35, 36, 59, 92, 94, 99, 139 Rental ...................................................... 11 Rental Assistance .................................... 11 Repetitive Loss .................... 30, 42, 77, 139 Replacement ................................ 48, 98, 99 Replacement cost .................................... 48 Residential 18, 19, 50, 59, 82, 139, 141, 143

S

Sanitation ...............................................126 Savings ....................................................39 SBA ..........................................................39 SBA disaster home loan ...........................11 SFHA .7, 15, 28, 30, 34, 39, 40, 46, 60, 138, 141, 143, 144 Special flood hazard area .........................60 Standard .. 26, 29, 33, 40, 46, 136, 141, 143 Subrogation ............................................113 Substantial improvement ..........................27 Suit.........................................................113

T Term ......................................................129 Territory..................................................134 Theft................................................... 44, 62 Total .........................................................19 Treasury ...............................................5, 16

U Unit .............................................. 7, 60, 140 Units ................................................... 70, 72 Us .................................................. 102, 104

W Watercraft .......................................... 88, 89 We51, 52, 60, 61, 68, 86, 94, 100, 104, 108, 109, 113, 115 Windstorm ................................................63 Write Your Own .............. 9, 25, 26, 140, 143 Write-Your-Own ................... 21, 22, 26, 141 WYO ...................... 6, 25, 26, 140, 141, 143

Y You .. 98, 100, 101, 102, 106, 110, 113, 122, 124, 128, 129, 130, 132, 140 Your ....9, 26, 51, 61, 84, 107, 121, 124, 140

Z Zones ...... 24, 28, 29, 34, 36, 37, 46, 67, 94, 137, 143

Safety .................................................... 149

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