Title 44 CFR 61

44 CFR Part 61.doc

Post Construction Elevation Certificate/Floodproofing Certificate

Title 44 CFR 61

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[Code of Federal Regulations]

[Title 44, Volume 1]

[Revised as of October 1, 2007]

From the U.S. Government Printing Office via GPO Access

[CITE: 44CFR61.1]


[Page 251]

TITLE 44--EMERGENCY MANAGEMENT AND ASSISTANCE

CHAPTER I--FEDERAL EMERGENCY MANAGEMENT AGENCY, DEPARTMENT OF HOMELAND

SECURITY

PART 61_INSURANCE COVERAGE AND RATES--Table of Contents

Sec. 61.1 Purpose of part.


This part describes the types of properties eligible for flood

insurance coverage under the Program, the limits of such coverage, and

the premium rates actually to be paid by insureds. The specific

communities eligible for coverage are designated by the Administrator

from time to time as applications are approved under the emergency

program and as ratemaking studies of communities are completed prior to

the regular program. Lists of such communities are periodically

published under part 64 of this subchapter.


[43 FR 2570, Jan. 17, 1978. Redesignated at 44 FR 31177, May 31, 1979,

as amended at 48 FR 39068, Aug. 29, 1983; 49 FR 4751, Feb. 8, 1984; 49

FR 5621, Feb. 14, 1984]




[Code of Federal Regulations]

[Title 44, Volume 1]

[Revised as of October 1, 2007]

From the U.S. Government Printing Office via GPO Access

[CITE: 44CFR61.2]


[Page 251]

TITLE 44--EMERGENCY MANAGEMENT AND ASSISTANCE

CHAPTER I--FEDERAL EMERGENCY MANAGEMENT AGENCY, DEPARTMENT OF HOMELAND

SECURITY

PART 61_INSURANCE COVERAGE AND RATES--Table of Contents

Sec. 61.2 Definitions.


The definitions set forth in part 59 of this subchapter are

applicable to this part.



[Code of Federal Regulations]

[Title 44, Volume 1]

[Revised as of October 1, 2007]

From the U.S. Government Printing Office via GPO Access

[CITE: 44CFR61.3]


[Page 251]

TITLE 44--EMERGENCY MANAGEMENT AND ASSISTANCE

CHAPTER I--FEDERAL EMERGENCY MANAGEMENT AGENCY, DEPARTMENT OF HOMELAND

SECURITY

PART 61_INSURANCE COVERAGE AND RATES--Table of Contents

Sec. 61.3 Types of coverage.


Insurance coverage under the Program is available for structures and

their contents. Coverage for each may be purchased separately.


[43 FR 2570, Jan. 17, 1978. Redesignated at 44 FR 31177, May 31, 1979,

as amended at 48 FR 39068, Aug. 29, 1983; 50 FR 36025, Sept. 4, 1985; 51

FR 30309, Aug. 25, 1986; 58 FR 62424, Nov. 26, 1993]



[Code of Federal Regulations]

[Title 44, Volume 1]

[Revised as of October 1, 2007]

From the U.S. Government Printing Office via GPO Access

[CITE: 44CFR61.4]


[Page 251]

TITLE 44--EMERGENCY MANAGEMENT AND ASSISTANCE

CHAPTER I--FEDERAL EMERGENCY MANAGEMENT AGENCY, DEPARTMENT OF HOMELAND

SECURITY

PART 61_INSURANCE COVERAGE AND RATES--Table of Contents

Sec. 61.4 Limitations on coverage.


All flood insurance made available under the Program is subject:

(a) To the Act, the Amendments thereto, and the Regulations issued

under the Act;

(b) To the terms and conditions of the Standard Flood Insurance

Policy, which shall be promulgated by the Administrator for substance

and form, and which is subject to interpretation by the Administrator as

to scope of coverage pursuant to the applicable statutes and

regulations;

(c) To the specified limits of coverage set forth in the Application

and Declarations page of the policy; and

(d) To the maximum limits of coverage set forth in Sec. 61.6.


[43 FR 2570, Jan. 17, 1978. Redesignated at 44 FR 31177, May 31, 1979,

as amended at 48 FR 39068, Aug. 29, 1983; 50 FR 36025, Sept. 4, 1985; 53

FR 16277, May 6, 1988; 58 FR 62424, Nov. 26, 1993]



[Code of Federal Regulations]

[Title 44, Volume 1]

[Revised as of October 1, 2007]

From the U.S. Government Printing Office via GPO Access

[CITE: 44CFR61.5]


[Page 251-252]

TITLE 44--EMERGENCY MANAGEMENT AND ASSISTANCE

CHAPTER I--FEDERAL EMERGENCY MANAGEMENT AGENCY, DEPARTMENT OF HOMELAND

SECURITY

PART 61_INSURANCE COVERAGE AND RATES--Table of Contents

Sec. 61.5 Special terms and conditions.


(a) No new flood insurance or renewal of flood insurance policies

shall be written for properties declared by a duly constituted State or

local zoning or other authority to be in violation of any flood plain,

mudslide (i.e., mudflow) or flood-related erosion area management or

control law, regulation, or ordinance.

(b) In order to reduce the administrative costs of the Program, of

which the Federal Government pays a major share, payment of the full

policyholder premium must be made at the time of application.

(c) Because of the seasonal nature of flooding, refunds of premiums

upon cancellation of coverage by the insured are permitted only if the

insurer ceases to have an ownership interest in the covered property at

the location described in the policy. Refunds of premiums for any other

reason are subject to the conditions set forth in Sec. 62.5 of this

subchapter.

(d) Optional Deductibles, All Zones, are available as follows:


Category One--1 to 4 Family Building and Contents Coverage Policies

------------------------------------------------------------------------

Options Building/contents

------------------------------------------------------------------------

$500/$500

1,000/1,000

2,000/1,000

3,000/1,000

4,000/2,000

5,000/2,000

------------------------------------------------------------------------



[[Page 252]]



Category Two--1 to 4 Family Building Coverage Only or Contents Coverage

Only Policies

------------------------------------------------------------------------

Options Building Contents \1\

------------------------------------------------------------------------

$500 $500

1,000 1,000

2,000 2,000

3,000 3,000

4,000 4,000

5,000 5,000

------------------------------------------------------------------------

\1\ Also applies to residential unit contents in other residential

building or in multi-unit condominium building.



Category Three--Other Residential and Nonresidential Policies

------------------------------------------------------------------------

Single coverage only

Options Policy combining policy (either

building and contents building or contents)

------------------------------------------------------------------------

$500/$500 $500

1,000/1,000 1,000

2,000/2,000 2,000

3,000/3,000 3,000

4,000/4,000 4,000

5,000/5,000 5,000

------------------------------------------------------------------------



Category Four--Residential Condominium Building Policies

------------------------------------------------------------------------

Single coverage only

Options Policy combining policy (either

building and contents building or contents)

------------------------------------------------------------------------

$10,000/$10,000 $10,000

25,000/10,000 25,000

------------------------------------------------------------------------


Note: Any other combination may be submitted for rating to the NFIP.


(e) The standard flood insurance policy is authorized only under

terms and conditions established by Federal statute, the program's

regulations, the Administrator's interpretations and the express terms

of the policy itself. Accordingly, representations regarding the extent

and scope of coverage which are not consistent with the National Flood

Insurance Act of 1968, as amended, or the Program's regulations, are

void, and the duly licensed property or casualty agent acts for the

insured and does not act as agent for the Federal Government, the

Federal Emergency Management Agency, or the servicing agent.


[43 FR 2570, Jan. 17, 1978. Redesignated at 44 FR 31177, May 31, 1979,

as amended at 47 FR 19140, May 4, 1982; 48 FR 39068, Aug. 29, 1983; 49

FR 33656, Aug. 23, 1984; 50 FR 36025, Sept. 4, 1985; 51 FR 30309, Aug.

25, 1986; 53 FR 16277, May 6, 1988; 53 FR 27991, July 26, 1988; 57 FR

19541, May 7, 1992; 58 FR 62424, Nov. 26, 1993]



[Code of Federal Regulations]

[Title 44, Volume 1]

[Revised as of October 1, 2007]

From the U.S. Government Printing Office via GPO Access

[CITE: 44CFR61.6]


[Page 252]

TITLE 44--EMERGENCY MANAGEMENT AND ASSISTANCE

CHAPTER I--FEDERAL EMERGENCY MANAGEMENT AGENCY, DEPARTMENT OF HOMELAND

SECURITY

PART 61_INSURANCE COVERAGE AND RATES--Table of Contents

Sec. 61.6 Maximum amounts of coverage available.


(a) Pursuant to section 1306 of the Act, the following are the

limits of coverage available under the emergency program and under the

regular program.


------------------------------------------------------------------------

Regular program

--------------------------------------

Emergency Total

program \1\ Second amount

first layer layer available

------------------------------------------------------------------------

Single Family Residential


Except in Hawaii, Alaska, Guam, $35,000 $215,000 $250,000

U.S. Virgin Islands.............

In Hawaii, Alaska, Guam, U.S. 50,000 200,000 250,000

Virgin Islands..................


Other Residential


Except in Hawaii, Alaska, Guam, 100,000 150,000 250,000

U.S. Virgin Islands.............

In Hawaii, Alaska, Guam, U.S. 150,000 100,000 250,000

Virgin Islands..................


Nonresidential


Small business................... 100,000 400,000 500,000

Churches and other properties.... 100,000 400,000 500,000


Contents \2\


Residential...................... 10,000 90,000 100,000

Small business................... 100,000 400,000 500,000

Churches, other properties....... 100,000 400,000 500,000

------------------------------------------------------------------------

\1\ Only first layer available under emergency program.

\2\ Per unit.


(b) In the insuring of a residential condominium building in a

regular program community, the maximum limit of building coverage is

$250,000 times the number of units in the building (not to exceed the

building's replacement cost).


[60 FR 5585, Jan. 30, 1995]


[[Page 253]]



[Code of Federal Regulations]

[Title 44, Volume 1]

[Revised as of October 1, 2007]

From the U.S. Government Printing Office via GPO Access

[CITE: 44CFR61.7]


[Page 253]

TITLE 44--EMERGENCY MANAGEMENT AND ASSISTANCE

CHAPTER I--FEDERAL EMERGENCY MANAGEMENT AGENCY, DEPARTMENT OF HOMELAND

SECURITY

PART 61_INSURANCE COVERAGE AND RATES--Table of Contents

Sec. 61.7 Risk premium rate determinations.


(a) Pursuant to section 1307 of the Act, the Administrator is

authorized to undertake studies and investigations to enable him/her to

estimate the risk premium rates necessary to provide flood insurance in

accordance with accepted actuarial principles, including applicable

operating costs and allowances. Such rates are also referred to in this

subchapter as ``actuarial rates.''

(b) The Administrator is also authorized to prescribe by regulation

the rates which can reasonably be charged to insureds in order to

encourage them to purchase the flood insurance made available under the

Program. Such rates are referred to in this subchapter as ``chargeable

rates.'' For areas having special flood, mudslide (i.e., mudflow), and

flood-related erosion hazards, chargeable rates are usually lower than

actuarial rates.



[Code of Federal Regulations]

[Title 44, Volume 1]

[Revised as of October 1, 2007]

From the U.S. Government Printing Office via GPO Access

[CITE: 44CFR61.8]


[Page 253]

TITLE 44--EMERGENCY MANAGEMENT AND ASSISTANCE

CHAPTER I--FEDERAL EMERGENCY MANAGEMENT AGENCY, DEPARTMENT OF HOMELAND

SECURITY

PART 61_INSURANCE COVERAGE AND RATES--Table of Contents

Sec. 61.8 Applicability of risk premium rates.


Risk premium rates are applicable to all flood insurance made

available for:

(a) Any structure, the construction or substantial improvement of

which was started after December 31, 1974 or on or after the effective

date of the initial FIRM, whichever is later.

(b) Coverage which exceeds the following limits:

(1) For dwelling properties in States other than Alaska, Hawaii, the

Virgin Islands, and Guam (i) $35,000 aggregate liability for any

property containing only one unit, (ii) $100,000 for any property

containing more than one unit, and (iii) $10,000 liability per unit for

any contents related to such unit.

(2) For dwelling properties in Alaska, Hawaii, the Virgin Islands,

and Guam (i) $50,000 aggregate liability for any property containing

only one unit, (ii) $150,000 for property containing more than one unit,

and (iii) $10,000 aggregate liability per unit for any contents related

to such unit.

(3) For churches and other properties (i) $100,000 for the structure

and (ii) $100,000 for contents of any such unit.

(c) Any structure or the contents thereof for which the chargeable

rates prescribed by this part would exceed the risk premium rates.




[Code of Federal Regulations]

[Title 44, Volume 1]

[Revised as of October 1, 2007]

From the U.S. Government Printing Office via GPO Access

[CITE: 44CFR61.9]


[Page 253-254]

TITLE 44--EMERGENCY MANAGEMENT AND ASSISTANCE

CHAPTER I--FEDERAL EMERGENCY MANAGEMENT AGENCY, DEPARTMENT OF HOMELAND

SECURITY

PART 61_INSURANCE COVERAGE AND RATES--Table of Contents

Sec. 61.9 Establishment of chargeable rates.


(a) Under section 1308 of the Act, we are establishing annual

chargeable rates for each $100 of flood insurance coverage as follows

for Pre-FIRM, A zone properties, Pre-FIRM, V-zone properties, and

emergency program properties.


----------------------------------------------------------------------------------------------------------------

A zone \1\ rates per year per V zone \2\ rates per year per

$100 coverage on: $100 coverage on:

---------------------------------------------------------------

structure Structure

Type of structure --------------------- ---------------------

RCBAP \3\ RCBAP \3\

-------------- All Contents -------------- All Contents

High Low other High Low other

rise rise rise rise

----------------------------------------------------------------------------------------------------------------

1. Residential:

No Basement or Enclosure.................... .85 .70 .76 .96 1.08 .93 .99 1.23

With Basement or Enclosure.................. .90 .75 .81 .96 1.15 1.00 1.06 1.23

2. All other including hotels and motels with

normal occupancy of less than 6 months

duration:

No Basement or Enclosure.................... N/A N/A .83 1.62 N/A N/A 1.10 2.14

With Basement or Enclosure.................. N/A N/A .88 1.62 N/A N/A 1.16 2.14

----------------------------------------------------------------------------------------------------------------

\1\ 1 A zones are zones A1-A30, AE, AO, AH, and unnumbered A zones.

\2\ V zones are zones V1-V30, VE, and unnumbered V zones.

\3\ Residential Condominium Building Association Policies (RCBAP) are distinguished between High Rise (those

structures that have 3 or more floors and 5 or more units) and Low Rise (those structures that have either

less than 3 floors or less than 5 units).



[[Page 254]]


(b) We will charge rates for contents in pre-FIRM buildings

according to the use of the building.

(c) A-zone rates for buildings without basements or enclosures apply

uniformly to all buildings throughout emergency program communities.


[64 FR 13116, Mar. 17, 1999, as amended at 67 FR 8905, Feb. 27, 2002; 68

FR 15668, Apr. 1, 2003]



[Code of Federal Regulations]

[Title 44, Volume 1]

[Revised as of October 1, 2007]

From the U.S. Government Printing Office via GPO Access

[CITE: 44CFR61.11]


[Page 254-255]

TITLE 44--EMERGENCY MANAGEMENT AND ASSISTANCE

CHAPTER I--FEDERAL EMERGENCY MANAGEMENT AGENCY, DEPARTMENT OF HOMELAND

SECURITY

PART 61_INSURANCE COVERAGE AND RATES--Table of Contents

Sec. 61.11 Effective date and time of coverage under the Standard Flood


Insurance Policy--New Business Applications and Endorsements.


(a) During the 13-month period beginning on the effective date of a

revised Flood Hazard Boundary Map or Flood Insurance Rate Map for a

community, the effective date and time of any initial flood insurance

coverage shall be 12:01 a.m. (local time) on the first calendar day

after the application date and the presentment of payment of premium;

for example, a flood insurance policy applied for with the payment of

the premium on May 1 will become effective at 12:01 a.m. on May 2.

(b) Where the initial purchase of flood insurance is in connection

with the making, increasing, extension, or renewal of a loan, the

coverage with respect to the property which is the subject of the loan

shall be effective as of the time of the loan closing, provided the

written request for the coverage is received by the NFIP and the flood

insurance policy is applied for and the presentment of payment of

premium is made at or prior to the loan closing.

(c) Except as provided by paragraphs (a) and (b) of this section,

the effective date and time of any new policy or added coverage or

increase in the amount of coverage shall be 12:01 a.m. (local time) on

the 30th calendar day after the application date and the presentment of

payment of premium; for example, a flood insurance policy applied for

with the payment of the premium on May 1 will become effective at 12:01

a.m. on May 31.

(d) Adding new coverage or increasing the amount of coverage in

force is permitted during the term of any policy. The additional premium

for any new coverage or increase in the amount of coverage shall be

calculated pro rata in accordance with the rates currently in force.

(e) With respect to any submission of an application in connection

with new business, the payment by an insured to an agent or the issuance

of premium payment by the agent, does not constitute payment to the

NFIP, except where a WYO Company receives an application and premium

payment from one of its agents and elects to refer the business to the

NFIP Servicing Agent because the WYO Company does not wish to write the

business, in which case any applicable waiting period under this section

shall be calculated in accordance with the first sentence of paragraph

(f) of this section. Therefore, it is important that an application for

Flood Insurance and its premium be mailed to the NFIP promptly in order

to have the effective date of the coverage based on the application date

plus the waiting period. If the application and the premium payment are

received at the office of the NFIP within ten (10) days from the date of

application, the waiting period will be calculated from the date of

application. Also, as an alternative, in those cases where the

application and premium payment are mailed by certified mail within four

(4) days from the date of application, the waiting period will be

calculated from the date of application even though the application and

premium payment are received at the office of the NFIP after ten (10)

days following the date of application. Thus, if the application and

premium payment are received after ten (10) days from the date of the

application or are not mailed by certified mail within four (4) days

from the date of application, the waiting period will be calculated from

the date of receipt at the office of the NFIP. To determine the

effective date of any coverage added by endorsement to a flood insurance

policy already in effect, substitute the term endorsement for the term

application in this paragraph (e).

(f) With respect to the submission of an application in connection

with new business, a renewal of a policy in effect and an endorsement to

a policy in effect, the payment by an insured to an


[[Page 255]]


agent or the issuance of premium payment to a Write-Your-Own (WYO)

Company by the agent, accompanied by a properly completed application,

renewal or endorsement form, as appropriate, shall commence the

calculation of any applicable waiting period under this section,

provided that the agent is acting in the capacity of an agent of a

Write-Your-Own (WYO) Company authorized by 44 CFR 62.23, is under

written contract to or is an employee of such Company, and such WYO

Company is, at the time of such submission of an application in

connection with new business or a renewal of or endorsement to flood

insurance coverage, engaged in WYO business under an arrangement entered

into by the Administrator and the WYO Company pursuant to Sec. 62.23.

(g) Subject to the provisions of paragraph (f) of this section, the

rules set forth in paragraphs (a), (b), (c), (d) and (e) of this section

apply to WYO Companies, except that premium payments and accompanying

applications and endorsements shall be mailed to and received by the WYO

Company, rather than the NFIP.


[43 FR 50427, Oct. 30, 1978. Redesignated at 44 FR 31177, May 31, 1979,

as amended at 46 FR 13514, Feb. 23, 1981; 48 FR 39069, Aug. 29, 1983; 48

FR 44544, Sept. 29, 1983; 49 FR 33656, Aug. 24, 1984; 50 FR 16242, Apr.

25, 1985; 50 FR 36026, Sept. 4, 1985; 51 FR 30309, Aug. 25, 1986; 53 FR

15211, Apr. 28, 1988; 60 FR 5585, 5586, Jan. 30, 1995]



[Code of Federal Regulations]

[Title 44, Volume 1]

[Revised as of October 1, 2007]

From the U.S. Government Printing Office via GPO Access

[CITE: 44CFR61.12]


[Page 255-256]

TITLE 44--EMERGENCY MANAGEMENT AND ASSISTANCE

CHAPTER I--FEDERAL EMERGENCY MANAGEMENT AGENCY, DEPARTMENT OF HOMELAND

SECURITY

PART 61_INSURANCE COVERAGE AND RATES--Table of Contents

Sec. 61.12 Rates based on a flood protection system involving Federal funds.


(a) Where the Administrator determines that a community has made

adequate progress on the construction of a flood protection system

involving Federal funds which will significantly limit the area of

special flood hazards, the applicable risk premium rates for any

property, located within a special flood hazard area intended to be

protected directly by such system will be those risk premium rates which

would be applicable when the system is complete.

(b) Adequate progress in paragraph (a) of this section means that

the community has provided information to the Administrator sufficient

to determine that substantial completion of the flood protection system

has been effected because:

(1) 100 percent of the total financial project cost of the completed

flood protection system has been authorized;

(2) At least 60 percent of the total financial project cost of the

completed flood protection system has been appropriated;

(3) At least 50 percent of the total financial project cost of the

completed flood protection system has been expended;

(4) All critical features of the flood protection system, as

identified by the Administrator, are under construction, and each

critical feature is 50 percent completed as measured by the actual

expenditure of the estimated construction budget funds; and

(5) The community has not been responsible for any delay in the

completion of the system.

(c) Each request by a community for a determination must be

submitted in writing to the Risk Studies Division, Office of Risk

Assessment, Federal Insurance Administration, Federal Emergency

Management Agency, Washington DC, and contain a complete statement of

all relevant facts relating to the flood protection system, including,

but not limited to, supporting technical data (e.g., U.S. Army Corps of

Engineers flood protection project data), cost schedules, budget

appropriation data and the extent of Federal funding of the system's

construction. Such facts shall include information sufficient to

identify all persons affected by such flood protection system or by such

request: A full and precise statement of intended purposes of the flood

protection system; and a carefully detailed description of such project,

including construction completion target dates. In addition, true copies

of all contracts, agreements, leases, instruments, and other documents

involved must be submitted with the request. Relevant facts reflected in

documents, however, must be included in the statement and not merely

incorporated by reference, and must be accompanied by an analysis of

their bearing on the requirements of paragraph (b) of this section,

specifying the pertinent provisions. The request must contain a

statement whether, to the best


[[Page 256]]


of the knowledge of the person responsible for preparing the application

for the community, the flood protection system is currently the subject

matter of litigation before any Federal, State or local court or

administrative agency, and the purpose of that litigation. The request

must also contain a statement as to whether the community has previously

requested a determination with respect to the same subject matter from

the Administrator, detailing the disposition of such previous request.

As documents become part of the file and cannot be returned, the

original documents should not be submitted.

(d) The effective date for any risk premium rates established under

this section shall be the date of final determination by the

Administrator that adequate progress toward completion of a flood

protection system has been made in a community.

(e) A responsible official of a community which received a

determination that adequate progress has been made towards completion of

a flood protection system shall certify to the Administrator annually on

the anniversary date of receipt of such determination that no present

delay in completion of the system is attributable to local sponsors of

the system, and that a good faith effort is being made to complete the

project.

(f) A community for which risk premium rates have been made

available under section 1307(e) of the National Flood Insurance Act of

1968, as amended, shall notify the Administrator if, at any time, all

progress on the completion of the flood protection system has been

halted or if the project for the completion of the flood protection

system has been canceled.


[43 FR 2570, Jan. 17, 1978, Redesignated at 44 FR 31177, May 31, 1979,

as amended at 47 FR 43061 Sept. 30, 1982; 48 FR 39069, Aug. 29, 1983; 48

FR 44552, Sept. 29, 1983; 49 FR 4751, Feb. 8, 1984; 51 FR 30310, Aug.

25, 1986]




[Code of Federal Regulations]

[Title 44, Volume 1]

[Revised as of October 1, 2007]

From the U.S. Government Printing Office via GPO Access

[CITE: 44CFR61.13]


[Page 256]

TITLE 44--EMERGENCY MANAGEMENT AND ASSISTANCE

CHAPTER I--FEDERAL EMERGENCY MANAGEMENT AGENCY, DEPARTMENT OF HOMELAND

SECURITY

PART 61_INSURANCE COVERAGE AND RATES--Table of Contents

Sec. 61.13 Standard Flood Insurance Policy.


(a) Incorporation of forms. Each of the Standard Flood Insurance

Policy forms included in appendix ``A'' hereto (General Property,

Dwelling, and Residential Condominium Building Association) and by

reference incorporated herein shall be incorporated into the Standard

Flood Insurance Policy.

(b) Endorsements. All endorsements to the Standard Flood Insurance

Policy shall be final upon publication in the Federal Register for

inclusion in appendix A.

(c) Applications. The application and renewal application forms

utilized by the National Flood Insurance Program shall be the only

application forms used in connection with the Standard Flood Insurance

Policy.

(d) Waivers. The Standard Flood Insurance Policy and required

endorsements must be used in the Flood Insurance Program, and no

provision of the said documents shall be altered, varied, or waived

other than by the express written consent of the Administrator through

the issuance of an appropriate amendatory endorsement, approved by the

Administrator as to form and substance for uniform use.

(e) Oral and written binders. No oral binder or contract shall be

effective. No written binder shall be effective unless issued with

express authorization of the Administrator.

(f) The Standard Flood Insurance Policy and endorsements may be

issued by private sector ``Write-Your-Own'' (WYO) property insurance

companies, based upon flood insurance applications and renewal forms,

all of which instruments of flood insurance may bear the name, as

Insurer, of the issuing WYO Company. In the case of any Standard Flood

Insurance Policy, and its related forms, issued by a WYO Company,

wherever the names ``Federal Emergency Management Agency'' and ``Federal

Insurance Administration'' appear, the WYO Company is authorized to

substitute its own name therefor. Standard Flood Insurance Policies

issued by WYO Companies may be executed by the issuing WYO Company as

Insurer, in the place and stead of the Federal Insurance Administrator.


[43 FR 2570, Jan. 17, 1978. Redesignated at 44 FR 31177, May 31, 1979,

as amended at 44 FR 62517, Oct. 31, 1979; 48 FR 46791, Oct. 14, 1983; 58

FR 62424, Nov. 26, 1993]




[Code of Federal Regulations]

[Title 44, Volume 1]

[Revised as of October 1, 2007]

From the U.S. Government Printing Office via GPO Access

[CITE: 44CFR61.14]


[Page 257]

TITLE 44--EMERGENCY MANAGEMENT AND ASSISTANCE

CHAPTER I--FEDERAL EMERGENCY MANAGEMENT AGENCY, DEPARTMENT OF HOMELAND

SECURITY

PART 61_INSURANCE COVERAGE AND RATES--Table of Contents

Sec. 61.14 Standard Flood Insurance Policy Interpretations.


(a) Definition. A Standard Flood Insurance Policy Interpretation is

a written determination by the Administrator construing the scope of the

flood insurance coverage that has been and is provided under the policy.

(b) Publication and requests for interpretation. The Administrator

shall, pursuant to these regulations from time to time, issue

interpretative rulings regarding the provisions of the Standard Flood

Insurance Policy. Such Interpretations shall be published in the Federal

Register, made a part of appendix C to these regulations, and

incorporated by reference as part of these regulations. Any policyholder

or person in privity with a policyholder may file a request for an

interpretation in writing with the Federal Insurance Administration,

Federal Emergency Management Agency, Washington, DC 20472.


[43 FR 2570, Jan. 17, 1978. Redesignated at 44 FR 31177, May 31, 1979,

as amended at 48 FR 39072, Aug. 29, 1983]




[Code of Federal Regulations]

[Title 44, Volume 1]

[Revised as of October 1, 2007]

From the U.S. Government Printing Office via GPO Access

[CITE: 44CFR61.16]


[Page 257]

TITLE 44--EMERGENCY MANAGEMENT AND ASSISTANCE

CHAPTER I--FEDERAL EMERGENCY MANAGEMENT AGENCY, DEPARTMENT OF HOMELAND

SECURITY

PART 61_INSURANCE COVERAGE AND RATES--Table of Contents

Sec. 61.16 Probation additional premium.


The additional premium charged pursuant to Sec. 59.24(b) on each

policy sold or renewed within a community placed on probation prior to

October 1, 1992, is $25.00. Where the community was placed on probation

on or after October 1, 1992, the additional premium charge is $50.00.''.


[50 FR 36026, Sept. 4, 1985, as amended at 57 FR 19541, May 7, 1992]




[Code of Federal Regulations]

[Title 44, Volume 1]

[Revised as of October 1, 2007]

From the U.S. Government Printing Office via GPO Access

[CITE: 44CFR61.17]


[Page 257-300]

TITLE 44--EMERGENCY MANAGEMENT AND ASSISTANCE

CHAPTER I--FEDERAL EMERGENCY MANAGEMENT AGENCY, DEPARTMENT OF HOMELAND

SECURITY

PART 61_INSURANCE COVERAGE AND RATES--Table of Contents

Sec. 61.17 Group Flood Insurance Policy.


(a) A Group Flood Insurance Policy (GFIP) is a policy covering all

individuals named by a State as recipients under section 408 of the

Stafford Act (42 U.S.C. 5174) of an Individuals and Households Program

(IHP) award for flood damage as a result of major disaster declaration

by the President.

(b) The premium for the GFIP is a flat fee of $600 per insured. We

may adjust the premium to reflect NFIP loss experience and any

adjustment of benefits under the IHP program.

(c) The amount of coverage is equivalent to the maximum grant amount

established under section 408 of the Stafford Act (42 U.S.C. 5174).

(d) The term of the GFIP is for 36 months and begins 60 days after

the date of the disaster declaration.

(e) Coverage for individual grantees begins on the thirtieth day

after the NFIP receives the required data for individual grantees and

their premium payments.

(f) We will send a Certificate of Flood Insurance to each individual

insured under the GFIP.

(g) The GFIP is the Standard Flood Insurance Policy Dwelling Form (a

copy of which is included in Appendix A(1) of this part), except that:

(1) VI. DEDUCTIBLES does not apply to the GFIP. A special deductible

of $200 (applicable separately to any building loss and any contents

loss) applies to insured flood-damage losses sustained by the insured

property in the course of any subsequent flooding event during the term

of the GFIP. The deductible does not apply to:

(i) III.C.2. Loss Avoidance Measures; or

(ii) III. C.3. Condominium Loss Assessments coverage.

(2) VII. GENERAL CONDITIONS, E. Cancellation of Policy by You, does

not apply to the GFIP.

(3) VII. GENERAL CONDITIONS, H. Policy Renewal, does not apply to

the GFIP.

(h) We will send a notice to the GFIP certificate holders

approximately 60 days before the end of the thirty-six month term of the

GFIP. The notice will encourage them to contact a local insurance agent

or producer or a private insurance company selling NFIP policies under

the Write Your Own program of the NFIP Standard Flood Insurance Policy,

and advise them as to the amount of coverage they must maintain in order

not to jeopardize their eligibility for future disaster assistance. The

IHP program will provide the NFIP the amount of flood insurance coverage

to be maintained by certificate holders.


[65 FR 60769, Oct. 12, 2000, as amended at 67 FR 61462, Sept. 30, 2002]


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Appendix A(1) to Part 61


Federal Emergency Management Agency, Federal Insurance Administration


Standard Flood Insurance Policy


DWELLING FORM


Please read the policy carefully. The flood insurance provided is

subject to limitations, restrictions, and exclusions. This policy covers

only:

1. A non-condominium residential building designed for principal use

as a dwelling place of one to four families, or

2. A single family dwelling unit in a condominium building.


I. Agreement


The Federal Emergency Management Agency (FEMA) provides flood

insurance under the terms of the National Flood Insurance Act of 1968

and its Amendments, and Title 44 of the Code of Federal Regulations.

We will pay you for direct physical loss by or from flood to your

insured property if you:

1. Have paid the correct premium;

2. Comply with all terms and conditions of this policy; and

3. Have furnished accurate information and statements.

We have the right to review the information you give us at any time

and to revise your policy based on our review.


II. Definitions


A. In this policy, ``you'' and ``your'' refer to the insured(s)

shown on the Declarations Page of this policy and your spouse, if a

resident of the same household. Insured(s) includes: 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

loss in the order of precedence. ``We,'' ``us,'' and ``our'' refer to

the insurer.

Some definitions are complex because they are provided as they

appear in the law or regulations, or result from court cases. The

precise definitions are intended to protect you.

Flood, as used in this flood insurance policy, means:

1. A general and temporary condition of partial or complete

inundation of two or more acres of normally dry land area or of two or

more properties (one of which is your property) from:

a. Overflow of inland or tidal waters,

b. Unusual and rapid accumulation or runoff of surface waters from

any source,

c. Mudflow.

2. Collapse or subsidence of land along the shore of a lake or

similar body of water as a result of erosion or undermining caused by

waves or currents of water exceeding anticipated cyclical levels that

result in a flood as defined in A.1.a. above.

B. The following are the other key definitions we use in this

policy:

1. Act. The National Flood Insurance Act of 1968 and any amendments

to it.

2. Actual Cash Value. The cost to replace an insured item of

property at the time of loss, less the value of its physical

depreciation.

3. Application. The statement made and signed by you or your agent

in applying for this policy. The application gives information we use to

determine the eligibility of the risk, the kind of policy to be issued,

and the correct premium payment. The application is part of this flood

insurance policy. For us to issue you a policy, the correct premium

payment must accompany the application.

4. Base Flood. A flood having a one percent chance of being equaled

or exceeded in any given year.

5. Basement. Any area of the building, including any sunken room or

sunken portion of a room, having its floor below ground level (subgrade)

on all sides.

6. Building.

a. A structure with two or more outside rigid walls and a fully

secured roof, that is affixed to a permanent site;

b. A manufactured home (a ``manufactured home,'' also known as a

mobile home, is a structure: built on a permanent chassis, transported

to its site in one or more sections, and affixed to a permanent

foundation); or

c. A travel trailer without wheels, built on a chassis and affixed

to a permanent foundation, that is regulated under the community's

floodplain management and building ordinances or laws.

Building does not mean a gas or liquid storage tank or a

recreational vehicle, park trailer or other similar vehicle, except as

described in B.6.c. above.

7. Cancellation. The ending of the insurance coverage provided by

this policy before the expiration date.

8. Condominium. That form of ownership of real property in which

each unit owner has an undivided interest in common elements.

9. Condominium Association. The entity made up of the unit owners

responsible for the maintenance and operation of:

a. Common elements owned in undivided shares by unit owners; and

b. Other real property in which the unit owners have use rights;

where membership in the entity is a required condition of unit

ownership.

10. Declarations Page. A computer-generated summary of information

you provided in the application for insurance. The Declarations Page

also describes the term of the policy, limits of coverage, and displays

the


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premium and our name. The Declarations Page is a part of this flood

insurance policy.

11. Described Location. The location where the insured building(s)

or personal property are found. The described location is shown on the

Declarations Page.

12. Direct Physical Loss By or From Flood. Loss or damage to insured

property, directly caused by a flood. There must be evidence of physical

changes to the property.

13. Dwelling. A building designed for use as a residence for no more

than four families or a single-family unit in a building under a

condominium form of ownership.

14. Elevated Building. A building that has no basement and that has

its lowest elevated floor raised above ground level by foundation walls,

shear walls, posts, piers, pilings, or columns.

15. Emergency Program. The initial phase of a community's

participation in the National Flood Insurance Program. During this

phase, only limited amounts of insurance are available under the Act.

16. Expense Constant. A flat charge you must pay on each new or

renewal policy to defray the expenses of the Federal Government related

to flood insurance.

17. Federal Policy Fee. A flat charge you must pay on each new or

renewal policy to defray certain administrative expenses incurred in

carrying out the National Flood Insurance Program. This fee covers

expenses not covered by the Expense Constant.

18. Improvements. Fixtures, alterations, installations, or additions

comprising a part of the insured dwelling or the apartment in which you

reside.

19. Mudflow. A river of liquid and flowing mud on the surface of

normally dry land areas, as when earth is carried by a current of water.

Other earth movements, such as landslide, slope failure, or a saturated

soil mass moving by liquidity down a slope, are not mudflows.

20. National Flood Insurance Program (NFIP). 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.

21. Policy. The entire written contract between you and us. It

includes:

a. This printed form;

b. The application and Declarations Page;

c. Any endorsement(s) that may be issued; and

d. Any renewal certificate indicating that coverage has been

instituted for a new policy and new policy term.

Only one dwelling, which you specifically described in the

application, may be insured under this policy.

22. Pollutants. Substances that include, but are not limited to, any

solid, liquid, gaseous, or thermal irritant or contaminant, including

smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste.

``Waste'' includes, but is not limited to, materials to be recycled,

reconditioned, or reclaimed.

23. Post-FIRM Building. A building for which construction or

substantial improvement occurred after December 31, 1974, or on or after

the effective date of an initial Flood Insurance Rate Map (FIRM),

whichever is later.

24. Probation Premium. A flat charge you must pay on each new or

renewal policy issued covering property in a community the NFIP has

placed on probation under the provisions of 44 CFR 59.24.

25. Regular Program. The final phase of a community's participation

in the National Flood Insurance Program. In this phase, a Flood

Insurance Rate Map is in effect and full limits of coverage are

available under the Act.

26. Special Flood Hazard Area. An area having special flood or

mudflow, and/or flood-related erosion hazards, and shown on a Flood

Hazard Boundary Map or Flood Insurance Rate Map as Zone A, AO, A1-A30,

AE, A99, AH, AR, AR/A, AR/AE, AR/AH, AR/AO, AR/A1-A30, V1-V30, VE, or V.

27. Unit. A single-family unit you own in a condominium building.

28. Valued Policy. A policy in which the insured and the insurer

agree on the value of the property insured, that value being payable in

the event of a total loss. The Standard Flood Insurance Policy is not a

valued policy.


III. Property Covered


A. Coverage A--Building Property


We insure against direct physical loss by or from flood to:

1. The dwelling at the described location, or for a period of 45

days at another location as set forth in III.C.2.b., Property Removed to

Safety.

2. Additions and extensions attached to and in contact with the

dwelling by means of a rigid exterior wall, a solid load-bearing

interior wall, a stairway, an elevated walkway, or a roof. At your

option, additions and extensions connected by any of these methods may

be separately insured. Additions and extensions attached to and in

contact with the building by means of a common interior wall that is not

a solid load-bearing wall are always considered part of the dwelling and

cannot be separately insured.

3. A detached garage at the described location. Coverage is limited

to no more than 10% of the limit of liability on the dwelling. Use of

this insurance is at your option but reduces the building limit of

liability. We do not cover any detached garage used or held for use for

residential (i.e., dwelling), business, or farming purposes.

4. Materials and supplies to be used for construction, alteration,

or repair of the


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dwelling or a detached garage while the materials and supplies are

stored in a fully enclosed building at the described location or on an

adjacent property.

5. A building under construction, alteration, or repair at the

described location.

a. If the structure is not yet walled or roofed as described in the

definition for building (see II.B.6.a.) then coverage applies:

(1) Only while such work is in progress; or

(2) If such work is halted, only for a period of up to 90 continuous

days thereafter.

b. However, coverage does not apply until the building is walled and

roofed if the lowest floor, including the basement floor, of a non-

elevated building or the lowest elevated floor of an elevated building

is:

(1) Below the base flood elevation in Zones AH, AE, A1-A30, AR, AR/

AE, AR/AH, AR/A1-A30, AR/A, AR/AO; or

(2) Below the base flood elevation adjusted to include the effect of

wave action in Zones VE or V1-V30.

The lowest floor levels are based on the bottom of the lowest

horizontal structural member of the floor in Zones VE or V1-V30 and the

top of the floor in Zones AH, AE, A1-A30, AR, AR/AE, AR/AH, AR/A1-A30,

AR/A, AR/AO.

6. A manufactured home or a travel trailer as described in the

Definitions section (see II.B.6.b. and II.B.6.c.).

If the manufactured home or travel trailer is in a special flood

hazard area, it must be anchored in the following manner at the time of

the loss:

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

b. In accordance with the manufacturer's specifications; or

c. In compliance with the community's floodplain management

requirements unless it has been continuously insured by the NFIP at the

same described location since September 30, 1982.

7. The following items of property which are covered under Coverage

A only:

a. Awnings and canopies;

b. Blinds;

c. Built-in dishwashers;

d. Built-in microwave ovens;

e. Carpet permanently installed over unfinished flooring;

f. Central air conditioners;

g. Elevator equipment;

h. Fire sprinkler systems;

i. Walk-in freezers;

j. Furnaces and radiators;

k. Garbage disposal units;

l. Hot water heaters, including solar water heaters;

m. Light fixtures;

n. Outdoor antennas and aerials fastened to buildings;

o. Permanently installed cupboards, bookcases, cabinets, paneling,

and wallpaper;

p. Plumbing fixtures;

q. Pumps and machinery for operating pumps;

r. Ranges, cooking stoves, and ovens;

s. Refrigerators; and

t. Wall mirrors, permanently installed.

8. Items of property in a building enclosure below the lowest

elevated floor of an elevated post-FIRM building located in Zones A1-

A30, AE, AH, AR, AR/A, AR/AE, AR/AH, AR/A1-A30, V1-V30, or VE, or in a

basement, regardless of the zone. Coverage is limited to the following:

a. Any of the following items, if installed in their functioning

locations and, if necessary for operation, connected to a power source:

(1) Central air conditioners;

(2) Cisterns and the water in them;

(3) Drywall for walls and ceilings in a basement and the cost of

labor to nail it, unfinished and unfloated and not taped, to the

framing;

(4) Electrical junction and circuit breaker boxes;

(5) Electrical outlets and switches;

(6) Elevators, dumbwaiters and related equipment, except for related

equipment installed below the base flood elevation after September 30,

1987;

(7) Fuel tanks and the fuel in them;

(8) Furnaces and hot water heaters;

(9) Heat pumps;

(10) Nonflammable insulation in a basement;

(11) Pumps and tanks used in solar energy systems;

(12) Stairways and staircases attached to the building, not

separated from it by elevated walkways;

(13) Sump pumps;

(14) Water softeners and the chemicals in them, water filters, and

faucets installed as an integral part of the plumbing system;

(15) Well water tanks and pumps;

(16) Required utility connections for any item in this list; and

(17) Footings, foundations, posts, pilings, piers, or other

foundation walls and anchorage systems required to support a building.

b. Clean-up.


B. Coverage B--Personal Property


1. If you have purchased personal property coverage, we insure

against direct physical loss by or from flood to personal property

inside a building at the described location, if:

a. The property is owned by you or your household family members;

and

b. At your option, the property is owned by guests or servants.

Personal property is also covered for a period of 45 days at another

location as set forth in III.C.2.b., Property Removed to Safety.

Personal property in a building that is not fully enclosed must be

secured to prevent flotation out of the building. If the personal


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property does float out during a flood, it will be conclusively presumed

that it was not reasonably secured. In that case there is no coverage

for such property.

2. Coverage for personal property includes the following property,

subject to B.1. above, which is covered under Coverage B only:

a. Air conditioning units, portable or window type;

b. Carpets, not permanently installed, over unfinished flooring;

c. Carpets over finished flooring;

d. Clothes washers and dryers;

e. ``Cook-out'' grills;

f. Food freezers, other than walk-in, and food in any freezer; and

g. Portable microwave ovens and portable dishwashers.

3. Coverage for items of property in a building enclosure below the

lowest elevated floor of an elevated post-FIRM building located in Zones

A1-A30, AE, AH, AR, AR/A, AR/AE, AR/AH, AR/A1-A30, V1-V30, or VE, or in

a basement, regardless of the zone, is limited to the following items,

if installed in their functioning locations and, if necessary for

operation, connected to a power source:

a. Air conditioning units, portable or window type;

b. Clothes washers and dryers; and

c. Food freezers, other than walk-in, and food in any freezer.

4. If you are a tenant and have insured personal property under

Coverage B in this policy, we will cover such property, including your

cooking stove or range and refrigerator. The policy will also cover

improvements made or acquired solely at your expense in the dwelling or

apartment in which you reside, but for not more than 10% of the limit of

liability shown for personal property on the Declarations Page. Use of

this insurance is at your option but reduces the personal property limit

of liability.

5. If you are the owner of a unit and have insured personal property

under Coverage B in this policy, we will also cover your interior walls,

floor, and ceiling (not otherwise covered under a flood insurance policy

purchased by your condominium association) for not more than 10% of the

limit of liability shown for personal property on the Declarations Page.

Use of this insurance is at your option but reduces the personal

property limit of liability.

6. Special Limits. We will pay no more than $2,500 for any one loss

to one or more of the following kinds of personal property:

a. Artwork, photographs, collectibles, or memorabilia, including but

not limited to, porcelain or other figures, and sports cards;

b. Rare books or autographed items;

c. Jewelry, watches, precious and semi-precious stones, or articles

of gold, silver, or platinum;

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

value; or

e. Personal property used in any business.

7. We will pay only for the functional value of antiques.


C. Coverage C--Other Coverages


1. Debris Removal.

a. We will pay the expense to remove non-owned debris that is on or

in insured property and debris of insured property anywhere.

b. If you or a member of your household perform the removal work,

the value of your work will be based on the Federal minimum wage.

c. This coverage does not increase the Coverage A or Coverage B

Limit of Liability.

2. Loss Avoidance Measures

a. Sandbags, Supplies, and Labor

(1) We will pay up to $1,000 for costs you incur to protect the

insured building from a flood or imminent danger of flood, for the

following:

(a) Your reasonable expenses to buy:

(i) Sandbags, including sand to fill them;

(ii) Fill for temporary levees;

(iii) Pumps; and

(iv) Plastic sheeting and lumber used in connection with these

items.

(b) The value of work, at the Federal minimum wage, that you or a

member of your household perform.

(2) This coverage for Sandbags, Supplies and Labor only applies if

damage to insured property by or from flood is imminent and the threat

of flood damage is apparent enough to lead a person of common prudence

to anticipate flood damage. One of the following must also occur:

(a) A general and temporary condition of flooding in the area near

the described location must occur, even if the flood does not reach the

building; or

(b) A legally authorized official must issue an evacuation order or

other civil order for the community in which the building is located

calling for measures to preserve life and property from the peril of

flood.

This coverage does not increase the Coverage A or Coverage B Limit

of Liability.

b. Property Removed to Safety

(1) We will pay up to $1,000 for the reasonable expenses you incur

to move insured property to a place other than the described location

that contains the property in order to protect it from flood or the

imminent danger of flood.

Reasonable expenses include the value of work, at the Federal

minimum wage, you or a member of your household perform.

(2) If you move insured property to a location other than the

described location that contains the property, in order to protect it

from flood or the imminent danger of flood, we will cover such property

while at that location for a period of 45 consecutive days from the date

you begin to move it there. The personal property that is moved must be


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placed in a fully enclosed building or otherwise reasonably protected

from the elements.

Any property removed, including a moveable home described in

II.6.b.and c., must be placed above ground level or outside of the

special flood hazard area.

This coverage does not increase the Coverage A or Coverage B Limit

of Liability.

3. Condominium Loss Assessments.

a. If this policy insures a unit, we will pay, up to the Coverage A

limit of liability, your share of loss assessments charged against you

by the condominium association in accordance with the condominium

association's articles of association, declarations and your deed.

The assessment must be made as a result of direct physical loss by

or from flood during the policy term, to the building's common elements.

b. We will not pay any loss assessment charged against you:

(1) And the condominium association by any governmental body;

(2) That results from a deductible under the insurance purchased by

the condominium association insuring common elements;

(3) That results from a loss to personal property, including

contents of a condominium building;

(4) That results from a loss sustained by the condominium

association that was not reimbursed under a flood insurance policy

written in the name of the association under the Act because the

building was not, at the time of loss, insured for an amount equal to

the lesser of:

(a) 80% or more of its full replacement cost; or

(b) The maximum amount of insurance permitted under the Act;

(5) To the extent that payment under this policy for a condominium

building loss, in combination with payments under any other NFIP

policies for the same building loss, exceeds the maximum amount of

insurance permitted under the Act for that kind of building; or

(6) To the extent that payment under this policy for a condominium

building loss, in combination with any recovery available to you as a

tenant in common under any NFIP condominium association policies for the

same building loss, exceeds the amount of insurance permitted under the

Act for a single-family dwelling.

Loss assessment coverage does not increase the Coverage A Limit of

Liability.


D. Coverage D--Increased Cost of Compliance


1. General.

This policy pays you to comply with a State or local floodplain

management law or ordinance affecting repair or reconstruction of a

structure suffering flood damage. Compliance activities eligible for

payment are: elevation, floodproofing, relocation, or demolition (or any

combination of these activities) of your structure. Eligible

floodproofing activities are limited to:

a. Non-residential structures.

b. Residential structures with basements that satisfy FEMA's

standards published in the Code of Federal Regulations [44 CFR 60.6 (b)

or (c)].

2. Limit of Liability.

We will pay you up to $30,000 under this Coverage D--Increased Cost

of Compliance, which only applies to policies with building coverage

(Coverage A). Our payment of claims under Coverage D is in addition to

the amount of coverage which you selected on the application and which

appears on the Declarations Page. But the maximum you can collect under

this policy for both Coverage A--Building Property and Coverage D--

Increased Cost of Compliance cannot exceed the maximum permitted under

the Act. We do not charge a separate deductible for a claim under

Coverage D.

3. Eligibility

a. A structure covered under Coverage A--Building Property

sustaining a loss caused by a flood as defined by this policy must:

(1) Be a ``repetitive loss structure.'' A repetitive loss structure

is one that meets the following conditions:

(a) The structure is covered by a contract of flood insurance issued

under the NFIP.

(b) The structure has suffered flood damage on two occasions during

a 10-year period which ends on the date of the second loss.

(c) The cost to repair the flood damage, on average, equaled or

exceeded 25% of the market value of the structure at the time of each

flood loss.

(d) In addition to the current claim, the NFIP must have paid the

previous qualifying claim, and the State or community must have a

cumulative, substantial damage provision or repetitive loss provision in

its floodplain management law or ordinance being enforced against the

structure; 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. The State or community must have a substantial damage

provision in its floodplain management law or ordinance being enforced

against the structure.

b. This Coverage D pays you to comply with State or local floodplain

management laws or ordinances that meet the minimum standards of the

National Flood Insurance Program found in the Code of Federal

Regulations at 44 CFR 60.3. We pay for compliance activities that exceed

those standards under these conditions:

(1) 3.a.(1) above.

(2) Elevation or floodproofing in any risk zone to preliminary or

advisory base flood


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elevations provided by FEMA which the State or local government has

adopted and is enforcing for flood-damaged structures in such areas.

(This includes compliance activities in B, C, X, or D zones which are

being changed to zones with 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 apply to situations in B, C, X, or D zones where the community

has derived its own elevations and is enforcing elevation or

floodproofing requirements for flood-damaged structures to elevations

derived solely by the community.

(3) 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.

c. 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 Coverage D.

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 D.5.g.

below.

e. 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 before the

present loss from the applicable floodplain management requirements.

4. Conditions.

a. When a structure covered under Coverage A--Building Property

sustains a loss caused by a flood, our payment for the loss under this

Coverage D will be for the increased cost to elevate, floodproof,

relocate, or demolish (or any combination of these activities) caused by

the enforcement of current State or local floodplain management

ordinances or laws. Our payment for eligible demolition activities will

be for the cost to demolish and clear the site of the building debris or

a portion thereof caused by the 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 proper abandonment of on-site

utilities.

b. 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.

5. Exclusions.

Under this Coverage D (Increased Cost of Compliance) we will not pay

for:

a. The cost to comply with any floodplain management law or

ordinance in communities participating in the Emergency Program.

b. 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.

c. The loss in value to any insured building or other structure due

to the requirements of any ordinance or law.

d. 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.

e. Any Increased Cost of Compliance under this Coverage D:

(1) Until the building is elevated, floodproofed, demolished, or

relocated on the same or to another premises; and

(2) Unless the building is elevated, floodproofed, demolished, or

relocated as soon as reasonably possible after the loss, not to exceed

two years.

f. Any code upgrade requirements, e.g., plumbing or electrical

wiring, not specifically related to the State or local floodplain

management law or ordinance.

g. 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.

h. Loss due to any ordinance or law that you were required to comply

with before the current loss.

i. 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.

j. Increased Cost of Compliance for a garage or carport.

k. Any structure insured under an NFIP Group Flood Insurance Policy.

l. 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. Other Provisions.


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a. 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 as set forth in VII.

General Conditions, V. Loss Settlement.

b. All other conditions and provisions of the policy apply.


IV. Property Not Covered


We do not cover any of the following:

1. Personal property not inside a building;

2. A building, and personal property in it, located entirely in, on,

or over water or seaward of mean high tide if it was constructed or

substantially improved after September 30, 1982;

3. Open structures, including a building used as a boathouse or any

structure or building into which boats are floated, and personal

property located in, on, or over water;

4. Recreational vehicles other than travel trailers described in the

Definitions section (see II.B.6.c.) whether affixed to a permanent

foundation or on wheels;

5. Self-propelled vehicles or machines, including their parts and

equipment. However, we do cover self-propelled vehicles or machines not

licensed for use on public roads that are:

a. Used mainly to service the described location or

b. Designed and used to assist handicapped persons, while the

vehicles or machines are inside a building at the described location;

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

or animals;

7. Accounts, bills, coins, currency, deeds, evidences of debt,

medals, money, scrip, stored value cards, postage stamps, securities,

bullion, manuscripts, or other valuable papers;

8. Underground structures and equipment, including wells, septic

tanks, and septic systems;

9. Those portions of walks, walkways, decks, driveways, patios and

other surfaces, all whether protected by a roof or not, located outside

the perimeter, exterior walls of the insured building or the building in

which the insured unit is located;

10. Containers, including related equipment, such as, but not

limited to, tanks containing gases or liquids;

11. Buildings or units and all their contents if more than 49% of

the actual cash value of the building is below ground, unless the lowest

level is at or above the base flood elevation and is below ground by

reason of earth having been used as insulation material in conjunction

with energy efficient building techniques;

12. Fences, retaining walls, seawalls, bulkheads, wharves, piers,

bridges, and docks;

13. Aircraft or watercraft, or their furnishings and equipment;

14. Hot tubs and spas that are not bathroom fixtures, and swimming

pools, and their equipment, such as, but not limited to, heaters,

filters, pumps, and pipes, wherever located;

15. Property not eligible for flood insurance pursuant to the

provisions of the Coastal Barrier Resources Act and the Coastal Barrier

Improvement Act and amendments to these Acts;

16. Personal property you own in common with other unit owners

comprising the membership of a condominium association.


V. Exclusions


A. We only pay for direct physical loss by or from flood, which

means that we do not pay you for:

1. Loss of revenue or profits;

2. Loss of access to the insured property or described location;

3. Loss of use of the insured property or described location;

4. Loss from interruption of business or production;

5. Any additional living expenses incurred while the insured

building is being repaired or is unable to be occupied for any reason;

6. The cost of complying with any ordinance or law requiring or

regulating the construction, demolition, remodeling, renovation, or

repair of property, including removal of any resulting debris. This

exclusion does not apply to any eligible activities we describe in

Coverage D--Increased Cost of Compliance; or

7. Any other economic loss you suffer.

B. We do not insure a loss directly or indirectly caused by a flood

that is already in progress at the time and date:

1. The policy term begins; or

2. Coverage is added at your request.

C. We do not insure for loss to property caused directly by earth

movement even if the earth movement is caused by flood. Some examples of

earth movement that we do not cover are:

1. Earthquake;

2. Landslide;

3. Land subsidence;

4. Sinkholes;

5. Destabilization or movement of land that results from

accumulation of water in subsurface land area; or

6. Gradual erosion.

We do, however, pay for losses from mudflow and land subsidence as a

result of erosion that are specifically covered under our definition of

flood (see II.A.1.c. and II.A.2.).

D. We do not insure for direct physical loss caused directly or

indirectly by any of the following:

1. The pressure or weight of ice;

2. Freezing or thawing;

3. Rain, snow, sleet, hail, or water spray;


[[Page 265]]


4. Water, moisture, mildew, or mold damage that results primarily

from any condition:

a. Substantially confined to the dwelling; or

b. That is within your control, including but not limited to:

(1) Design, structural, or mechanical defects;

(2) Failure, stoppage, or breakage of water or sewer lines, drains,

pumps, fixtures, or equipment; or

(3) Failure to inspect and maintain the property after a flood

recedes;

5. Water or water-borne material that:

a. Backs up through sewers or drains;

b. Discharges or overflows from a sump, sump pump or related

equipment; or

c. Seeps or leaks on or through the covered property;

unless there is a flood in the area and the flood is the proximate cause

of the sewer or drain backup, sump pump discharge or overflow, or the

seepage of water;

6. The pressure or weight of water unless there is a flood in the

area and the flood is the proximate cause of the damage from the

pressure or weight of water;

7. Power, heating, or cooling failure unless the failure results

from direct physical loss by or from flood to power, heating, or cooling

equipment on the described location;

8. Theft, fire, explosion, wind, or windstorm;

9. Anything you or any member of your household do or conspires to

do to deliberately cause loss by flood; or

10. Alteration of the insured property that significantly increases

the risk of flooding.

E. We do not insure for loss to any building or personal property

located on land leased from the Federal Government, arising from or

incident to the flooding of the land by the Federal Government, where

the lease expressly holds the Federal Government harmless under flood

insurance issued under any Federal Government program.

F. We do not pay for the testing for or monitoring of pollutants

unless required by law or ordinance.


VI. Deductibles


A. When a loss is covered under this policy, we will pay only that

part of the loss that exceeds your deductible amount, subject to the

limit of liability that applies. The deductible amount 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, your deductible amount will be two times the

deductible that would otherwise apply to a completed building.

B. In each loss from flood, separate deductibles apply to the

building and personal property insured by this policy.

C. The deductible does NOT apply to:

1. III.C.2. Loss Avoidance Measures;

2. III.C.3. Condominium Loss Assessments; or

3. III.D. Increased Cost of Compliance.


VII. General Conditions


A. Pair and Set Clause


In case of loss to an article that is part of a pair or set, we will

have the option of paying you:

1. An amount equal to the cost of replacing the lost, damaged, or

destroyed article, minus its depreciation, or

2. The amount that represents the fair proportion of the total value

of the pair or set that the lost, damaged, or destroyed article bears to

the pair or set.


B. Concealment or Fraud and Policy Voidance


1. With respect to all insureds under this policy, this policy:

a. Is void;

b. Has no legal force or effect;

c. Cannot be renewed; and

d. Cannot be replaced by a new NFIP policy, if, before or after a

loss, you or any other insured or your agent have at any time:

(1) Intentionally concealed or misrepresented any material fact or

circumstance;

(2) Engaged in fraudulent conduct; or

(3) Made false statements; relating to this policy or any other NFIP

insurance.

2. This policy will be void as of the date wrongful acts described

in B.1.above were committed.

3. Fines, civil penalties, and imprisonment under applicable Federal

laws may also apply to the acts of fraud or concealment described above.

4. This policy is also void for reasons other than fraud,

misrepresentation, or wrongful act. This policy is void from its

inception and has no legal force under the following conditions:

a. If the property is located in a community that was not

participating in the NFIP on the policy's inception date and did not

join or reenter the program during the policy term and before the loss

occurred; or

b. If the property listed on the application is otherwise not

eligible for coverage under the NFIP.


C. Other Insurance


1. If a loss covered by this policy is also covered by other

insurance that includes flood coverage not issued under the Act, we will

not pay more than the amount of insurance you are entitled to for lost,

damaged, or


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destroyed property insured under this policy subject to the following:

a. We will pay only the proportion of the loss that the amount of

insurance that applies under this policy bears to the total amount of

insurance covering the loss, unless C.1.b. or c. immediately below

applies.

b. If the other policy has a provision stating that it is excess

insurance, this policy will be primary.

c. This policy will be primary (but subject to its own deductible)

up to the deductible in the other flood policy (except another policy as

described in C.1.b. above). When the other deductible amount is reached,

this policy will participate in the same proportion that the amount of

insurance under this policy bears to the total amount of both policies,

for the remainder of the loss.

2. If there is other insurance in the name of your condominium

association covering the same property covered by this policy, then this

policy will be in excess over the other insurance.


D. Amendments, Waivers, Assignment


This policy cannot be changed 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

constitutes a waiver of any of our rights. You may assign this policy in

writing when you transfer title of your property to someone else except

under these conditions:

1. When this policy covers only personal property; or

2. When this policy covers a structure during the course of

construction.


E. Cancellation of the Policy by You


1. You may cancel this policy in accordance with the applicable

rules and regulations of the NFIP.

2. If you cancel this policy, you may be entitled to a full or

partial refund of premium also under the applicable rules and

regulations of the NFIP.


F. Non-Renewal of the Policy by Us


Your policy will not be renewed:

1. If the community where your covered property is located stops

participating in the NFIP, or

2. If your building has been declared ineligible under section 1316

of the Act.


G. Reduction and Reformation of Coverage


1. If the premium we received from you was not enough to buy the

kind and amount of coverage you requested, we will provide only the

amount of coverage that can be purchased for the premium payment we

received.

2. The policy can be reformed to increase the amount of coverage

resulting from the reduction described in G.1. above to the amount you

requested as follows:

a. Discovery of Insufficient Premium or Incomplete Rating

Information Before a Loss:

(1) If we discover before you have a flood loss that your premium

payment was not enough to buy the requested amount of coverage, we will

send you and any mortgagee or trustee known to us a bill for the

required additional premium for the current policy term (or that portion

of the current policy term following any endorsement changing the amount

of coverage). If you or the mortgagee or trustee pay the additional

premium within 30 days from the date of our bill, we will reform the

policy to increase the amount of coverage to the originally requested

amount effective to the beginning of the current policy term (or

subsequent date of any endorsement changing the amount of coverage).

(2) If we determine before you have a flood loss that the rating

information we have is incomplete and prevents us from calculating the

additional premium, we will ask you to send the required information.

You must submit the information within 60 days of our request. Once we

determine the amount of additional premium for the current policy term,

we will follow the procedure in G.2.a.(1) above.

(3) If we do not receive the additional premium (or additional

information) by the date it is due, the amount of coverage can only be

increased by endorsement subject to any appropriate waiting period.

b. Discovery of Insufficient Premium or Incomplete Rating

Information After a Loss:

(1) If we discover after you have a flood loss that your premium

payment was not enough to buy the requested amount of coverage, we will

send you and any mortgagee or trustee known to us a bill for the

required additional premium for the current and the prior policy terms.

If you or the mortgagee or trustee pay the additional premium within 30

days of the date of our bill, we will reform the policy to increase the

amount of coverage to the originally requested amount effective to the

beginning of the prior policy term.

(2) If we discover after you have a flood loss that the rating

information we have is incomplete and prevents us from calculating the

additional premium, we will ask you to send the required information.

You must submit the information before your claim can be paid. Once we

determine the amount of additional premium for the current and prior

policy terms, we will follow the procedure in G.2.b.(1) above.

(3) If we do not receive the additional premium by the date it is

due, your flood insurance claim will be settled based on the reduced

amount of coverage. The amount of


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coverage can only be increased by endorsement subject to any appropriate

waiting period.

3. However, if we find that you or your agent intentionally did not

tell us, or falsified, any important fact or circumstance or did

anything fraudulent relating to this insurance, the provisions of

Condition B. Concealment or Fraud and Policy Voidance apply.


H. Policy Renewal


1. This policy will expire at 12:01 a.m. on the last day of the

policy term.

2. We must receive the payment of the appropriate renewal premium

within 30 days of the expiration date.

3. If we find, however, that we did not place your renewal notice

into the U.S. Postal Service, or if we did mail it, we made a mistake,

e.g., we used an incorrect, incomplete, or illegible address, which

delayed its delivery to you before the due date for the renewal premium,

then we will follow these procedures:

a. If you or your agent notified us, not later than one year after

the date on which the payment of the renewal premium was due, of non-

receipt of a renewal notice before the due date for the renewal premium,

and we determine that the circumstances in the preceding paragraph

apply, we will mail a second bill providing a revised due date, which

will be 30 days after the date on which the bill is mailed.

b. If we do not receive the premium requested in the second bill by

the revised due date, then we will not renew the policy. In that case,

the policy will remain an expired policy as of the expiration date shown

on the Declarations Page.

4. In connection with the renewal of this policy, we may ask you

during the policy term to recertify, on a Recertification Questionnaire

we will provide to you, the rating information used to rate your most

recent application for or renewal of insurance.


I. Conditions Suspending or Restricting Insurance


We are not liable for loss that occurs while there is a hazard that

is increased by any means within your control or knowledge.


J. Requirements in Case of Loss


In case of a flood loss to insured property, you must:

1. Give prompt written notice to us;

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;

3. Prepare an inventory of damaged property showing the quantity,

description, actual cash value, and amount of loss. Attach all bills,

receipts, and related documents;

4. Within 60 days after the loss, send us a proof of loss, which is

your statement of the amount you are claiming under the policy signed

and sworn to by you, and which furnishes us with the following

information:

a. The date and time of loss;

b. A brief explanation of how the loss happened;

c. Your interest (for example, ``owner'') and the interest, if any,

of others in the damaged property;

d. Details of any other insurance that may cover the loss;

e. Changes in title or occupancy of the covered property during the

term of the policy;

f. Specifications of damaged buildings and detailed repair

estimates;

g. Names of mortgagees or anyone else having a lien, charge, or

claim against the insured property;

h. Details about who occupied any insured building at the time of

loss and for what purpose; and

i. The inventory of damaged personal property described in J.3.

above.

5. In completing the proof of loss, you must use your own judgment

concerning the amount of loss and justify that amount.

6. You must cooperate with the adjuster or representative in the

investigation of the claim.

7. 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

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.

8. We have not authorized the adjuster to approve or disapprove

claims or to tell you whether we will approve your claim.

9. At our option, we may accept the adjuster's report of the loss

instead of your proof of loss. The adjuster's report will include

information about your loss and the damages you sustained. You must sign

the adjuster's report. At our option, we may require you to swear to the

report.


K. Our Options After a Loss


Options we may, in our sole discretion, exercise after loss include

the following:

1. At such reasonable times and places that we may designate, you

must:

a. Show us or our representative the damaged property;

b. Submit to examination under oath, while not in the presence of

another insured, and sign the same; and

c. Permit us to examine and make extracts and copies of:

(1) Any policies of property insurance insuring you against loss and

the deed establishing your ownership of the insured real property;


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(2) Condominium association documents including the Declarations of

the condominium, its Articles of Association or Incorporation, Bylaws,

rules and regulations, and other relevant documents if you are a unit

owner in a condominium building; and

(3) All books of accounts, bills, invoices and other vouchers, or

certified copies pertaining to the damaged property if the originals are

lost.

2. We may request, in writing, that you furnish us with a complete

inventory of the lost, damaged or destroyed property, including:

a. Quantities and costs;

b. Actual cash values or replacement cost (whichever is

appropriate);

c. Amounts of loss claimed;

d. Any written plans and specifications for repair of the damaged

property that you can reasonably make available to us; and

e. Evidence that prior flood damage has been repaired.

3. If we give you written notice within 30 days after we receive

your signed, sworn proof of loss, we may:

a. Repair, rebuild, or replace any part of the lost, damaged, or

destroyed property with material or property of like kind and quality or

its functional equivalent; and

b. Take all or any part of the damaged property at the value that we

agree upon or its appraised value.


L. No Benefit to Bailee


No person or organization, other than you, having custody of covered

property will benefit from this insurance.


M. Loss Payment


1. We will adjust all losses with you. We will pay you unless some

other person or entity is named in the policy or is legally entitled to

receive payment. Loss will be payable 60 days after we receive your

proof of loss (or within 90 days after the insurance adjuster files the

adjuster's report signed and sworn to by you in lieu of a proof of loss)

and:

a. We reach an agreement with you;

b. There is an entry of a final judgment; or

c. There is a filing of an appraisal award with us, as provided in

VII. P.

2. If we reject your proof of loss in whole or in part you may:

a. Accept our denial of your claim;

b. Exercise your rights under this policy; or

c. File an amended proof of loss as long as it is filed within 60

days of the date of the loss.


N. Abandonment


You may not abandon to us damaged or undamaged property insured

under this policy.


O. Salvage


We may permit you to keep damaged property insured under this policy

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.


P. Appraisal


If you and we fail to agree on the actual cash value or, if

applicable, replacement cost of your damaged property to settle upon the

amount of loss, then either may demand an appraisal of the loss. In this

event, you and we will each choose a competent and impartial appraiser

within 20 days after receiving a written request from the other. The two

appraisers will choose an umpire. If they cannot agree upon an umpire

within 15 days, you or we may request that the choice be made by a judge

of a court of record in the state where the covered property is located.

The appraisers will separately state the actual cash value, the

replacement cost, and the amount of loss to each item. If the appraisers

submit a written report of an agreement to us, the amount agreed upon

will be the amount of loss. If they fail to agree, they will submit

their differences to the umpire. A decision agreed to by any two will

set the amount of actual cash value and loss, or if it applies, the

replacement cost and loss.

Each party will:

1. Pay its own appraiser; and

2. Bear the other expenses of the appraisal and umpire equally.


Q. Mortgage Clause


The word ``mortgagee'' includes trustee.

Any loss payable under Coverage A--Building Property will be paid to

any mortgagee of whom we have actual notice, as well as any other

mortgagee or loss payee determined to exist at the time of loss, and

you, as interests appear. If more than one mortgagee is named, the order

of payment will be the same as the order of precedence of the mortgages.

If we deny your claim, that denial will not apply to a valid claim

of the mortgagee, if the mortgagee:

1. Notifies us of any change in the ownership or occupancy, or

substantial change in risk of which the mortgagee is aware;

2. Pays any premium due under this policy on demand if you have

neglected to pay the premium; and

3. Submits a signed, sworn proof of loss within 60 days after

receiving notice from us of your failure to do so.

All of the terms of this policy apply to the mortgagee.

The mortgagee has the right to receive loss payment even if the

mortgagee has started foreclosure or similar action on the building.


[[Page 269]]


If we decide to cancel or not renew this policy, it will continue in

effect for the benefit of the mortgagee only for 30 days after we notify

the mortgagee of the cancellation or non-renewal.

If we pay the mortgagee for any loss and deny payment to you, we are

subrogated to all the rights of the mortgagee granted under the mortgage

on the property. Subrogation will not impair the right of the mortgagee

to recover the full amount of the mortgagee's claim.


R. Suit Against Us


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 one year after the date of the written

denial of all or part of the claim, and you must file the suit in the

United States District Court of the district in which the covered

property was located at the time of loss. This requirement applies to

any claim that you may have under this policy and to any dispute that

you may have arising out of the handling of any claim under the policy.


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 that 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.


T. Continuous Lake Flooding


1. If an insured building has been flooded by rising lake waters

continuously for 90 days or more and it appears reasonably certain that

a continuation of this flooding will result in a covered loss to the

insured building equal to or greater than the building policy limits

plus the deductible 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:

a. To make no further claim under this policy;

b. Not to seek renewal of this policy;

c. Not to apply for any flood insurance under the Act for property

at the described location; and

d. Not to seek a premium refund for current or prior terms.

If the policy term ends before the insured building has been flooded

continuously for 90 days, the provisions of this paragraph T.1. will

apply when the insured building suffers a covered loss before the policy

term ends.

2. If your insured building is subject to continuous lake flooding

from a closed basin lake, you may elect to file a claim under either

paragraph T.1. above or T.2. (A ``closed basin lake'' is a natural lake

from which water leaves primarily through evaporation and whose surface

area now exceeds or has exceeded one square mile at any time in the

recorded past. Most of the nation's closed basin lakes are in the

western half of the United States where annual evaporation exceeds

annual precipitation and where lake levels and surface areas are subject

to considerable fluctuation due to wide variations in the climate. These

lakes may overtop their basins on rare occasions.) Under this paragraph

T.2., we will pay your claim as if the building is a total loss even

though it has not been continuously inundated for 90 days, subject to

the following conditions:

a. Lake flood waters must damage or imminently threaten to damage

your building.

b. Before approval of your claim, you must:

(1) Agree to a claim payment that reflects your buying back the

salvage on a negotiated basis; and

(2) Grant the conservation easement described in FEMA's ``Policy

Guidance for Closed Basin Lakes'' to be recorded in the office of the

local recorder of deeds. FEMA, in consultation with the community in

which the property is located, will identify on a map an area or areas

of special consideration (ASC) in which there is a potential for flood

damage from continuous lake flooding. FEMA will give the community the

agreed-upon map showing the ASC. This easement will only apply to that

portion of the property in the ASC. It will allow certain agricultural

and recreational uses of the land. The only structures it will allow on

any portion of the property within the ASC are certain simple

agricultural and recreational structures. If any of these allowable

structures are insurable buildings under the NFIP and are insured under

the NFIP, they will not be eligible for the benefits of this paragraph

T.2. If a U.S. Army Corps of Engineers certified flood control project

or otherwise certified flood control project later protects the

property, FEMA will, upon request, amend the ASC to remove areas

protected by those projects. The restrictions of the easement will then

no longer apply to any portion of the property removed from the ASC; and

(3) Comply with paragraphs T.1.a. through T.1.d. above.


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c. Within 90 days of approval of your claim, you must move your

building to a new location outside the ASC. FEMA will give you an

additional 30 days to move if you show there is sufficient reason to

extend the time.

d. Before the final payment of your claim, you must acquire an

elevation certificate and a floodplain development permit from the local

floodplain administrator for the new location of your building.

e. Before the approval of your claim, the community having

jurisdiction over your building must:

(1) Adopt a permanent land use ordinance, or a temporary moratorium

for a period not to exceed 6 months to be followed immediately by a

permanent land use ordinance, that is consistent with the provisions

specified in the easement required in paragraph T.2.b. above.

(2) Agree to declare and report any violations of this ordinance to

FEMA so that under Section 1316 of the National Flood Insurance Act of

1968, as amended, flood insurance to the building can be denied; and

(3) Agree to maintain as deed-restricted, for purposes compatible

with open space or agricultural or recreational use only, any affected

property the community acquires an interest in. These deed restrictions

must be consistent with the provisions of paragraph T.2.b. above, except

that, even if a certified project protects the property, the land use

restrictions continue to apply if the property was acquired under the

Hazard Mitigation Grant Program or the Flood Mitigation Assistance

Program. If a non-profit land trust organization receives the property

as a donation, that organization must maintain the property as deed-

restricted, consistent with the provisions of paragraph T.2.b. above.

f. Before the approval of your claim, the affected State must take

all action set forth in FEMA's ``Policy Guidance for Closed Basin

Lakes.''

g. You must have NFIP flood insurance coverage continuously in

effect from a date established by FEMA until you file a claim under

paragraph T.2. If a subsequent owner buys NFIP insurance that goes into

effect within 60 days of the date of transfer of title, any gap in

coverage during that 60-day period will not be a violation of this

continuous coverage requirement. For the purpose of honoring a claim

under this paragraph T.2, we will not consider to be in effect any

increased coverage that became effective after the date established by

FEMA. The exception to this is any increased coverage in the amount

suggested by your insurer as an inflation adjustment.

h. This paragraph T.2. will be in effect for a community when the

FEMA Regional Director for the affected region provides to the

community, in writing, the following:

(1) Confirmation that the community and the State are in compliance

with the conditions in paragraphs T.2.e. and T.2.f. above, and

(2) The date by which you must have flood insurance in effect.


U. Duplicate Policies Not Allowed


1. We will not insure your property under more than one NFIP policy.

If we find that the duplication was not knowingly created, we will

give you written notice. The notice will advise you that you may choose

one of several options under the following procedures:

a. If you choose to keep in effect the policy with the earlier

effective date, you may also choose to add the coverage limits of the

later policy to the limits of the earlier policy. The change will become

effective as of the effective date of the later policy.

b. If you choose to keep in effect the policy with the later

effective date, you may also choose to add the coverage limits of the

earlier policy to the limits of the later policy. The change will be

effective as of the effective date of the later policy.

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 will

the resulting coverage limits exceed the permissible limits of coverage

under the Act or your insurable interest, whichever is less. We will

make a refund to you, according to applicable NFIP rules, of the premium

for the policy not being kept in effect.

2. Your option under Condition U. Duplicate Policies Not Allowed to

elect which NFIP policy to keep in effect does not apply when duplicates

have been knowingly created. Losses occurring under such circumstances

will be adjusted according to the terms and conditions of the earlier

policy. The policy with the later effective date must be canceled.


V. Loss Settlement


1. Introduction


This policy provides three methods of settling losses: Replacement

Cost, Special Loss Settlement, and Actual Cash Value. Each method is

used for a different type of property, as explained in a-c. below.

a. Replacement Cost Loss Settlement, described in V.2. below,

applies to a single-family dwelling provided:

(1) It is your principal residence, which means that, at the time of

loss, you or your spouse lived there for 80% of:

(a) The 365 days immediately preceding the loss; or

(b) The period of your ownership, if you owned the dwelling for less

than 365 days; and

(2) At the time of loss, the amount of insurance in this policy that

applies to the dwelling is 80% or more of its full replacement cost

immediately before the loss, or is


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the maximum amount of insurance available under the NFIP.

b. Special Loss Settlement, described in V.3. below, applies to a

single-family dwelling that is a manufactured or mobile home or a travel

trailer.

c. Actual Cash Value loss settlement applies to a single-family

dwelling not subject to replacement cost or special loss settlement, and

to the property listed in V.4. below.


2. Replacement Cost Loss Settlement


The following loss settlement conditions apply to a single-family

dwelling described in V.1.a. above:

a. We will pay to repair or replace the damaged dwelling after

application of the deductible and without deduction for depreciation,

but not more than the least of the following amounts:

(1) The building limit of liability shown on your Declarations Page;

(2) The replacement cost of that part of the dwelling damaged, with

materials of like kind and quality and for like use; or

(3) The necessary amount actually spent to repair or replace the

damaged part of the dwelling for like use.

b. If the dwelling is rebuilt at a new location, the cost described

above is limited to the cost that would have been incurred if the

dwelling had been rebuilt at its former location.

c. When the full cost of repair or replacement is more than $1,000,

or more than 5% of the whole amount of insurance that applies to the

dwelling, we will not be liable for any loss under V.2.a. above or

V.4.a.(2) below unless and until actual repair or replacement is

completed.

d. You may disregard the replacement cost conditions above and make

claim under this policy for loss to dwellings on an actual cash value

basis. You may then make claim for any additional liability according to

V.2.a., b., and c. above, provided you notify us of your intent to do so

within 180 days after the date of loss.

e. If the community in which your dwelling is located has been

converted from the Emergency Program to the Regular Program during the

current policy term, then we will consider the maximum amount of

available NFIP insurance to be the amount that was available at the

beginning of the current policy term.


3. Special Loss Settlement


a. The following loss settlement conditions apply to a single-family

dwelling that:

(1) is a manufactured or mobile home or a travel trailer, as defined

in II.B.6.b. and c.,

(2) is at least 16 feet wide when fully assembled and has an area of

at least 600 square feet within its perimeter walls when fully

assembled, and

(3) is your principal residence as specified in V.1.a.(1) above.

b. If such a dwelling is totally destroyed or damaged to such an

extent that, in our judgment, it is not economically feasible to repair,

at least to its pre-damage condition, we will, at our discretion pay the

least of the following amounts:

(1) The lesser of the replacement cost of the dwelling or 1.5 times

the actual cash value, or

(2) The building limit of liability shown on your Declarations Page.

c. If such a dwelling is partially damaged and, in our judgment, it

is economically feasible to repair it to its pre-damage condition, we

will settle the loss according to the Replacement Cost conditions in

V.2.above.


4. Actual Cash Value Loss Settlement


The types of property noted below are subject to actual cash value

(or in the case of V.4.a.(2), below, proportional) loss settlement.

a. A dwelling, at the time of loss, when the amount of insurance on

the dwelling is both less than 80% of its full replacement cost

immediately before the loss and less than the maximum amount of

insurance available under the NFIP. In that case, we will pay the

greater of the following amounts, but not more than the amount of

insurance that applies to that dwelling:

(1) The actual cash value, as defined in II.B.2., of the damaged

part of the dwelling; or

(2) A proportion of the cost to repair or replace the damaged part

of the dwelling, without deduction for physical depreciation and after

application of the deductible.

This proportion is determined as follows: If 80% of the full

replacement cost of the dwelling is less than the maximum amount of

insurance available under the NFIP, then the proportion is determined by

dividing the actual amount of insurance on the dwelling by the amount of

insurance that represents 80% of its full replacement cost. But if 80%

of the full replacement cost of the dwelling is greater than the maximum

amount of insurance available under the NFIP, then the proportion is

determined by dividing the actual amount of insurance on the dwelling by

the maximum amount of insurance available under the NFIP.

b. A two-, three-, or four-family dwelling.

c. A unit that is not used exclusively for single-family dwelling

purposes.

d. Detached garages.

e. Personal property.

f. Appliances, carpets, and carpet pads.

g. Outdoor awnings, outdoor antennas or aerials of any type, and

other outdoor equipment.


[[Page 272]]


h. Any property covered under this policy that is abandoned after a

loss and remains as debris anywhere on the described location.

i. A dwelling that is not your principal residence.


5. Amount of Insurance Required


To determine the amount of insurance required for a dwelling

immediately before the loss, we do not include the value of:

a. Footings, foundations, piers, or any other structures or devices

that are below the undersurface of the lowest basement floor and support

all or part of the dwelling;

b. Those supports listed in V.5.a. above, that are below the surface

of the ground inside the foundation walls if there is no basement; and

c. Excavations and underground flues, pipes, wiring, and drains.


Note: The Coverage D--Increased Cost of Compliance limit of

liability is not included in the determination of the amount of

insurance required.


VIII. Liberalization Clause


If we make a change that broadens your coverage under this edition

of our policy, but does not require any additional premium, then that

change will automatically apply to your insurance as of the date we

implement the change, provided that this implementation date falls

within 60 days before or during the policy term stated on the

Declarations Page.


IX. What Law Governs


This policy and all disputes arising from the handling of any claim

under the policy are governed exclusively 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.

In Witness Whereof, we have signed this policy below and hereby

enter into this Insurance Agreement.

Jo Ann Howard,

Administrator, Federal Insurance Administration.


[65 FR 60769, Oct. 12, 2000, as amended at 68 FR 9897, Mar. 3, 2003]


Appendix A(2) to Part 61


Federal Emergency Management Agency, Federal Insurance Administration


Standard Flood Insurance Policy


GENERAL PROPERTY FORM


Please read the policy carefully. The flood insurance coverage

provided is subject to limitations, restrictions, and exclusions.

This policy provides no coverage:

1. In a regular program community, for a residential condominium

building, as defined in this policy; and

2. Except for personal property coverage, for a unit in a

condominium building.


I. Agreement


The Federal Emergency Management Agency (FEMA) provides flood

insurance under the terms of the National Flood Insurance Act of 1968

and its Amendments, and Title 44 of the Code of Federal Regulations.

We will pay you for direct physical loss by or from flood to your

insured property if you:

1. Have paid the correct premium;

2. Comply with all terms and conditions of this policy; and

3. Have furnished accurate information and statements.

We have the right to review the information you give us at any time

and to revise your policy based on our review.


II. Definitions


A. In this policy, ``you'' and ``your'' refer to the insured(s)

shown on the Declarations Page of this policy. Insured(s) includes: 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 loss in the order of precedence. ``We,'' ``us,'' and ``our''

refer to the insurer.

Some definitions are complex because they are provided as they

appear in the law or regulations, or result from court cases. The

precise definitions are intended to protect you.

Flood, as used in this flood insurance policy, means:

1. A general and temporary condition of partial or complete

inundation of two or more acres of normally dry land area or of two or

more properties (one of which is your property) from:

a. Overflow of inland or tidal waters;

b. Unusual and rapid accumulation or runoff of surface waters from

any source;

c. Mudflow.

2. The collapse or subsidence of land along the shore of a lake or

similar body of water as a result of erosion or undermining caused by

waves or currents of water exceeding anticipated cyclical levels which

result in a flood as defined in A.1.a. above.

B. The following are the other key definitions we use in this

policy:

1. Act. The National Flood Insurance Act of 1968 and any amendments

to it.

2. Actual Cash Value. The cost to replace an insured item of

property at the time of loss, less the value of its physical

depreciation.

3. Application. The statement made and signed by you or your agent

in applying for


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this policy. The application gives information we use to determine the

eligibility of the risk, the kind of policy to be issued, and the

correct premium payment. The application is part of this flood insurance

policy. For us to issue you a policy, the correct premium payment must

accompany the application.

4. Base Flood. A flood having a one percent chance of being equaled

or exceeded in any given year.

5. Basement. Any area of the building, including any sunken room or

sunken portion of a room, having its floor below ground level (subgrade)

on all sides.

6. Building.

a. A structure with two or more outside rigid walls and a fully

secured roof, that is affixed to a permanent site;

b. A manufactured home (``a manufactured home,'' also known as a

mobile home, is a structure: built on a permanent chassis, transported

to its site in one or more sections, and affixed to a permanent

foundation); or

c. A travel trailer without wheels, built on a chassis and affixed

to a permanent foundation, that is regulated under the community's

floodplain management and building ordinances or laws.

Building does not mean a gas or liquid storage tank or a

recreational vehicle, park trailer, or other similar vehicle, except as

described in B.6.c., above.

7. Cancellation. The ending of the insurance coverage provided by

this policy before the expiration date.

8. Condominium. That form of ownership of real property in which

each unit owner has an undivided interest in common elements.

9. Condominium Association. The entity, formed by the unit owners,

responsible for the maintenance and operation of:

a. Common elements owned in undivided shares by unit owners; and

b. Other real property in which the unit owners have use rights

where membership in the entity is a required condition of unit

ownership.

10. Declarations Page. A computer-generated summary of information

you provided 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.

11. Described Location. The location where the insured building or

personal property is found. The described location is shown on the

Declarations Page.

12. Direct Physical Loss By or From Flood. Loss or damage to insured

property, directly caused by a flood. There must be evidence of physical

changes to the property.

13. Elevated Building. A building that has no basement and that has

its lowest elevated floor raised above ground level by foundation walls,

shear walls, posts, piers, pilings, or columns.

14. Emergency Program. The initial phase of a community's

participation in the National Flood Insurance Program. During this

phase, only limited amounts of insurance are available under the Act.

15. Expense Constant. A flat charge you must pay on each new or

renewal policy to defray the expenses of the Federal Government related

to flood insurance.

16. Federal Policy Fee. A flat charge you must pay on each new or

renewal policy to defray certain administrative expenses incurred in

carrying out the National Flood Insurance Program. This fee covers

expenses not covered by the expense constant.

17. Improvements. Fixtures, alterations, installations, or additions

comprising a part of the insured building.

18. Mudflow. A river of liquid and flowing mud on the surfaces of

normally dry land areas, as when earth is carried by a current of water.

Other earth movements, such as landslide, slope failure, or a saturated

soil mass moving by liquidity down a slope, are not mudflows.

19. National Flood Insurance Program (NFIP). 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.

20. Policy. The entire written contract between you and us. It

includes:

a. This printed form;

b. The application and Declarations Page;

c. Any endorsement(s) that may be issued; and,

d. Any renewal certificate indicating that coverage has been

instituted for a new policy and new policy term.

Only one building, which you specifically described in the

application, may be insured under this policy.

21. Pollutants. Substances that include, but that are not limited

to, any solid, liquid, gaseous or thermal irritant or contaminant,

including smoke, vapor, soot, fumes, acids, alkalis, chemicals, and

waste. ``Waste'' includes, but is not limited to, materials to be

recycled, reconditioned, or reclaimed.

22. Post-FIRM Building. A building for which construction or

substantial improvement occurred after December 31, 1974, or on or after

the effective date of an initial Flood Insurance Rate Map (FIRM),

whichever is later.

23. Probation Premium. A flat charge you must pay on each new or

renewal policy issued covering property in a community that has been

placed on probation under the provisions of 44 CFR 59.24.

24. Regular Program. The final phase of a community's participation

in the National Flood Insurance Program. In this phase, a Flood

Insurance Rate Map is in effect and


[[Page 274]]


full limits of coverage are available under the Act.

25. Residential Condominium Building. A building, owned and

administered as a condominium, containing one or more family units and

in which at least 75% of the floor area is residential.

26. Special Flood Hazard Area. An area having special flood or

mudflow, and/or flood-related erosion hazards, and shown on a Flood

Hazard Boundary Map or Flood Insurance Rate Map as Zone A, AO, A1-A30,

AE, A99, AH, AR, AR/A, AR/AE, AR/AH, AR/AO, AR/A1-A30, V1-V30, VE, V.

27. Stock means merchandise held in storage or for sale, raw

materials, and in-process or finished goods, including supplies used in

their packing or shipping.

Stock does not include any property not covered under Section IV.

Property Not

Covered, except the following:

a. Parts and equipment for self-propelled vehicles;

b. Furnishings and equipment for watercraft;

c. Spas and hot-tubs, including their equipment; and

d. Swimming pool equipment.

28. Unit. A unit in a condominium building.

29. Valued Policy. A policy in which the insured and the insurer

agree on the value of the property insured, that value being payable in

the event of a total loss. The Standard Flood Insurance Policy is not a

valued policy.


III. Property Covered


A. Coverage A--Building Property


We insure against direct physical loss by or from flood to:

1. The building described on the Declarations Page at the described

location. If the building is a condominium building and the named

insured is the condominium association, Coverage A includes all units

within the building and the improvements within the units, provided the

units are owned in common by all unit owners.

2. We also insure building property for a period of 45 days at

another location, as set forth in III.C.2.b., Property Removed to

Safety.

3. Additions and extensions attached to and in contact with the

building by means of a rigid exterior wall, a solid load-bearing

interior wall, a stairway, an elevated walkway, or a roof. At your

option, additions and extensions connected by any of these methods may

be separately insured. Additions and extensions attached to and in

contact with the building by means of a common interior wall that is not

a solid load-bearing wall are always considered part of the building and

cannot be separately insured.

4. The following fixtures, machinery, and equipment, which are

covered under Coverage A only:

a. Awnings and canopies;

b. Blinds;

c. Carpet permanently installed over unfinished flooring;

d. Central air conditioners;

e. Elevator equipment;

f. Fire extinguishing apparatus;

g. Fire sprinkler systems;

h. Walk-in freezers;

i. Furnaces;

j. Light fixtures;

k. Outdoor antennas and aerials attached to buildings;

l. Permanently installed cupboards, bookcases, paneling, and

wallpaper;

m. Pumps and machinery for operating pumps;

n. Ventilating equipment; and

o. Wall mirrors, permanently installed;

p. In the units within the building, installed:

(1) Built-in dishwashers;

(2) Built-in microwave ovens;

(3) Garbage disposal units;

(4) Hot water heaters, including solar water heaters;

(5) Kitchen cabinets;

(6) Plumbing fixtures;

(7) Radiators;

(8) Ranges;

(9) Refrigerators; and

(10) Stoves.

5. Materials and supplies to be used for construction, alteration,

or repair of the insured building while the materials and supplies are

stored in a fully enclosed building at the described location or on an

adjacent property.

6. A building under construction, alteration, or repair at the

described location.

a. If the structure is not yet walled or roofed as described in the

definition for building (see II. 6.a.), then coverage applies:

(1) Only while such work is in progress; or

(2) If such work is halted, only for a period of up to 90 continuous

days thereafter.

b. However, coverage does not apply until the building is walled and

roofed if the lowest floor, including the basement floor, of a non-

elevated building or the lowest elevated floor of an elevated building

is:

(1) Below the base flood elevation in Zones AH, AE, A1-A30, AR, AR/

AE, AR/AH, AR/A1-A30, AR/A, AR/AO; or

(2) Below the base flood elevation adjusted to include the effect of

wave action in Zones VE or V1-V30.

The lowest floor levels are based on the bottom of the lowest

horizontal structural member of the floor in Zones VE or V1-V30 and the

top of the floor in Zones AH, AE, A1-A30, AR, AR/AE, AR/AH, AR/A1-A30,

AR/A, AR/AO.


[[Page 275]]


7. A manufactured home or a travel trailer as described in the

Definitions

Section (see II.B.6.b.and II.B.6.c.).

If the manufactured home or travel trailer is in a special flood

hazard area, it must be anchored in the following manner at the time of

the loss:

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

b. In accordance with the manufacturer's specifications; or

c. In compliance with the community's floodplain management

requirements unless it has been continuously insured by the NFIP at the

same described location since September 30, 1982.

8. Items of property in a building enclosure below the lowest

elevated floor of an elevated post-FIRM building located in zones A1-

A30, AE, AH, AR, AR/A, AR/AE, AR/AH, AR/A1-A30, V1-V30, or VE, or in a

basement, regardless of the zone. Coverage is limited to the following:

a. Any of the following items, if installed in their functioning

locations and, if necessary for operation, connected to a power source:

(1) Central air conditioners;

(2) Cisterns and the water in them;

(3) Drywall for walls and ceilings in a basement and the cost of

labor to nail it, unfinished and unfloated and not taped, to the

framing;

(4) Electrical junction and circuit breaker boxes;

(5) Electrical outlets and switches;

(6) Elevators, dumbwaiters, and related equipment, except for

related equipment installed below the base flood elevation after

September 30, 1987;

(7) Fuel tanks and the fuel in them;

(8) Furnaces and hot water heaters;

(9) Heat pumps;

(10) Nonflammable insulation in a basement;

(11) Pumps and tanks used in solar energy systems;

(12) Stairways and staircases attached to the building, not

separated from it by elevated walkways;

(13) Sump pumps;

(14) Water softeners and the chemicals in them, water filters, and

faucets installed as an integral part of the plumbing system;

(15) Well water tanks and pumps;

(16) Required utility connections for any item in this list; and

(17) Footings, foundations, posts, pilings, piers, or other

foundation walls and anchorage systems required to support a building.

b. Clean-up.


B. Coverage B--Personal Property


1. If you have purchased personal property coverage, we insure,

subject to B. 2., 3., and 4. below, against direct physical loss by or

from flood to personal property inside the fully enclosed insured

building:

a. Owned solely by you, or in the case of a condominium, owned

solely by the condominium association and used exclusively in the

conduct of the business affairs of the condominium association; or

b. Owned in common by the unit owners of the condominium

association.

We also insure such personal property for 45 days while stored at a

temporary location, as set forth in III.C.2.b., Property Removed to

Safety.

2. When this policy covers personal property, coverage will be

either for household personal property or other than household personal

property, while within the insured building, but not both.

a. If this policy covers household personal property, it will insure

household personal property usual to a living quarters, that:

(1) Belongs to you, or a member of your household, or at your

option:

(a) Your domestic worker;

(b) Your guest; or

(2) You may be legally liable for.

b. If this policy covers other than household personal property, it

will insure your:

(1) Furniture and fixtures;

(2) Machinery and equipment;

(3) Stock; and

(4) Other personal property owned by you and used in your business,

subject to IV. Property Not Covered.

3. Coverage for personal property includes the following property,

subject to B.1.a. and B.1.b. above, which is covered under Coverage B.

only:

a. Air conditioning units installed in the building;

b. Carpet, not permanently installed, over unfinished flooring;

c. Carpets over finished flooring;

d. Clothes washers and dryers;

e. ``Cook-out'' grills;

f. Food freezers, other than walk-in, and the food in any freezer;

g. Outdoor equipment and furniture stored inside the insured

building;

h. Ovens and the like; and

i. Portable microwave ovens and portable dishwashers.

4. Items of property in a building enclosure below the lowest

elevated floor of an elevated post-FIRM building located in zones A1-

A30, AE, AH, AR, AR/A, AR/AE, AR/AH, AR/A1-A30, V1-V30, or VE, or in a

basement, regardless of the zone, is limited to the following items, if

installed in their functioning locations and, if necessary for

operation, connected to a power source:

a. Air conditioning units--portable or window type;

b. Clothes washers and dryers; and

c. Food freezers, other than walk-in, and food in any freezer.


[[Page 276]]


5. Special Limits. We will pay no more than $2,500 for any loss to

one or more of the following kinds of personal property:

a. Artwork, photographs, collectibles, or memorabilia, including but

not limited to, porcelain or other figures, and sports cards;

b. Rare books or autographed items;

c. Jewelry, watches, precious and semi-precious stones, articles of

gold, silver, or platinum;

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

value; or

6. We will pay only for the functional value of antiques.

7. If you are a tenant, you may apply up to 10% of the Coverage B

limit to improvements:

a. Made a part of the building you occupy; and

b. You acquired, or made at your expense, even though you cannot

legally remove.

This coverage does not increase the amount of insurance that applies

to insured personal property.

8. If you are a condominium unit owner, you may apply up to 10% of

the Coverage B limit to cover loss to interior:

a. walls,

b. floors, and

c. ceilings,

that are not covered under a policy issued to the condominium

association insuring the condominium building.

This coverage does not increase the amount of insurance that applies

to insured personal property.

9. If you are a tenant, personal property must be inside the fully

enclosed building.


C. Coverage C--Other Coverages


1. Debris Removal.

a. We will pay the expense to remove non-owned debris that is on or

in insured property and debris of insured property anywhere.

b. If you or a member of your household perform the removal work,

the value of your work will be based on the Federal minimum wage.

c. This coverage does not increase the Coverage A or Coverage B

limit of liability.

2. Loss Avoidance Measures.

a. Sandbags, Supplies, and Labor

(1) We will pay up to $1,000 for the costs you incur to protect the

insured building from a flood or imminent danger of flood, for the

following:

(a) Your reasonable expenses to buy:

(i) Sandbags, including sand to fill them;

(ii) Fill for temporary levees;

(iii) Pumps; and

(iv) Plastic sheeting and lumber used in connection with these

items; and

(b) The value of work, at the Federal minimum wage, that you

perform.

(2) This coverage for Sandbags, Supplies, and Labor only applies if

damage to insured property by or from flood is imminent and the threat

of flood damage is apparent enough to lead a person of common prudence

to anticipate flood damage. One of the following must also occur:

(a) A general and temporary condition of flooding in the area near

the described location must occur, even if the flood does not reach the

insured building; or

(b) A legally authorized official must issue an evacuation order or

other civil order for the community in which the insured building is

located calling for measures to preserve life and property from the

peril of flood.

This coverage does not increase the Coverage A or Coverage B limit

of liability.

b. Property Removed to Safety

(1) We will pay up to $1,000 for the reasonable expenses you incur

to move insured property to a place other than the described location

that contains the property in order to protect it from flood or the

imminent danger of flood.

Reasonable expenses include the value of work, at the Federal

minimum wage, that you perform.

(2) If you move insured property to a place other than the described

location that contains the property, in order to protect it from flood

or the imminent danger of flood, we will cover such property while at

that location for a period of 45 consecutive days from the date you

begin to move it there. The personal property that is moved must be

placed in a fully enclosed building, or otherwise reasonably protected

from the elements.

Any property removed, including a moveable home described in II.6.b.

and c., must be placed above ground level or outside of the special

flood hazard area.

This coverage does not increase the Coverage A or Coverage B limit

of liability.

3. Pollution Damage.

We will pay for damage caused by pollutants to covered property if

the discharge, seepage, migration, release, or escape of the pollutants

is caused by or results from flood. The most we will pay under this

coverage is $10,000. This coverage does not increase the Coverage A or

Coverage B limits of liability. Any payment under this provision when

combined with all other payments for the same loss cannot exceed the

replacement cost or actual cash value, as appropriate, of the covered

property. This coverage does not include the testing for or monitoring

of pollutants unless required by law or ordinance.


D. Coverage D--Increased Cost of Compliance


1. General.

This policy pays you to comply with a State or local floodplain

management law or ordinance affecting repair or reconstruction of a

structure suffering flood damage. Compliance activities eligible for

payment are:


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elevation, floodproofing, relocation, or demolition (or any combination

of these activities) of your structure. Eligible floodproofing

activities are limited to:

a. Non-residential structures. b. Residential structures with

basements that satisfy FEMA's standards published in the Code of Federal

Regulations [44 CFR 60.6 (b) or (c)].

2. Limit of Liability.

We will pay you up to $30,000 under this Coverage D--Increased Cost

of Compliance, which only applies to policies with building coverage

(Coverage A). Our payment of claims under Coverage D is in addition to

the amount of coverage which you selected on the application and which

appears on the Declarations Page. But the maximum you can collect under

this policy for both Coverage A (Building Property) and Coverage D

(Increased Cost of Compliance) cannot exceed the maximum permitted under

the Act. We do NOT charge a separate deductible for a claim under

Coverage D.

3. Eligibility.

a. A structure covered under Coverage A--Building Property

sustaining a loss caused by a flood as defined by this policy must:

(1) Be a ``repetitive loss structure.'' A ``repetitive loss

structure'' is one that meets the following conditions:

(a) The structure is covered by a contract of flood insurance issued

under the NFIP.

(b) The structure has suffered flood damage on 2 occasions during a

10-year period which ends on the date of the second loss.

(c) The cost to repair the flood damage, on average, equaled or

exceeded 25% of the market value of the structure at the time of each

flood loss.

(d) In addition to the current claim, the NFIP must have paid the

previous qualifying claim, and the State or community must have a

cumulative, substantial damage provision or repetitive loss provision in

its floodplain management law or ordinance being enforced against the

structure; 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. The State or community must have a substantial damage

provision in its floodplain management law or ordinance being enforced

against the structure.

b. This Coverage D pays you to comply with State or local floodplain

management laws or ordinances that meet the minimum standards of the

National Flood Insurance Program found in the Code of Federal

Regulations at 44 CFR 60.3. We pay for compliance activities that exceed

those standards under these conditions:

(1) 3.a.(1) above.

(2) 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 flood-damaged 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 apply to situations in B, C, X, or D zones where the

community has derived its own elevations and is enforcing elevation or

floodproofing requirements for flood-damaged structures to elevations

derived solely by the community.

(3) 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.

c. 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 Coverage D.

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 D.5.g.

below.

e. 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 before the

present loss from the applicable floodplain management requirements.

4. Conditions.

a. When a structure covered under Coverage A--Building Property

sustains a loss caused by a flood, our payment for the loss under this

Coverage D will be for the increased cost to elevate, floodproof,

relocate, or demolish (or any combination of these activities) caused by

the enforcement of current State or local floodplain management

ordinances or laws. Our payment for eligible demolition activities will

be for the cost to demolish and clear the site of the building debris or

a portion thereof caused by the 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 proper abandonment of on-site

utilities.

b. 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.

5. Exclusions.


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Under this Coverage D--Increased Cost of Compliance, we will not pay

for:

a. The cost to comply with any floodplain management law or

ordinance in communities participating in the Emergency Program.

b. 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.

c. The loss in value to any insured building or other structure due

to the requirements of any ordinance or law.

d. 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.

e. Any Increased Cost of Compliance under this Coverage D:

(1) Until the building is elevated, floodproofed, demolished, or

relocated on the same or to another premises; and

(2) Unless the building is elevated, floodproofed, demolished, or

relocated as soon as reasonably possible after the loss, not to exceed

two years.

f. Any code upgrade requirements, e.g., plumbing or electrical

wiring, not specifically related to the State or local floodplain

management law or ordinance.

g. 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.

h. Loss due to any ordinance or law that you were required to comply

with before the current loss.

i. 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.

j. Increased Cost of Compliance for a garage or carport.

k. Any structure insured under an NFIP Group Flood Insurance Policy.

l. 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. Other Provisions.

All other conditions and provisions of the policy apply.


IV. Property Not Covered


A. We do not cover any of the following property:

1. Personal property not inside the fully enclosed building;

2. A building, and personal property in it, located entirely in, on,

or over water or seaward of mean high tide, if it was constructed or

substantially improved after September 30, 1982;

3. Open structures, including a building used as a boathouse or any

structure or building into which boats are floated, and personal

property located in, on, or over water;

4. Recreational vehicles other than travel trailers described in the

II.B.6.c., whether affixed to a permanent foundation or on wheels;

5. Self-propelled vehicles or machines, including their parts and

equipment. However, we do cover self-propelled vehicles or machines,

provided they are not licensed for use on public roads and are:

a. Used mainly to service the described location; or

b. Designed and used to assist handicapped persons, while the

vehicles or machines are inside a building at the described location;

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

or animals;

7. Accounts, bills, coins, currency, deeds, evidences of debt,

medals, money, scrip, stored value cards, postage stamps, securities,

bullion, manuscripts, or other valuable papers;

8. Underground structures and equipment, including wells, septic

tanks, and septic systems;

9. Those portions of walks, walkways, decks, driveways, patios, and

other surfaces, all whether protected by a roof or not, located outside

the perimeter, exterior walls of the insured building;

10. Containers including related equipment, such as, but not limited

to, tanks containing gases or liquids;

11. Buildings or units and all their contents if more than 49% of

the actual cash value of the building or unit is below ground, unless

the lowest level is at or above the base flood elevation and is below

ground by reason of earth having been used as insulation material in

conjunction with energy efficient building techniques;

12. Fences, retaining walls, seawalls, bulkheads, wharves, piers,

bridges, and docks;

13. Aircraft or watercraft, or their furnishings and equipment;

14. Hot tubs and spas that are not bathroom fixtures, and swimming

pools, and their equipment such as, but not limited to, heaters,

filters, pumps, and pipes, wherever located;

15. Property not eligible for flood insurance pursuant to the

provisions of the Coastal Barrier Resources Act and the Coastal Barrier

Improvement Act of 1990 and amendments to these Acts;


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16. Personal property owned by or in the care, custody or control of

a unit owner, except for property of the type and under the

circumstances set forth under III. Coverage B--Personal Property of this

policy;

17. A residential condominium building located in a Regular Program

community.


V. Exclusions


A. We only provide coverage for direct physical loss by or from

flood, which means that we do not pay you for:

1. Loss of revenue or profits;

2. Loss of access to the insured property or described location;

3. Loss of use of the insured property or described location;

4. Loss from interruption of business or production;

5. Any additional expenses incurred while the insured building is

being repaired or is unable to be occupied for any reason;

6. The cost of complying with any ordinance or law requiring or

regulating the construction, demolition, remodeling, renovation or

repair of property, including removal of any resulting debris. This

exclusion does not apply to any eligible activities that we describe in

Coverage D--Increased Cost of Compliance; or

7. Any other economic loss you suffer.

B. We do not insure a loss directly or indirectly caused by a flood

that is already in progress at the time and date:

1. The policy term begins; or

2. Coverage is added at your request.

C. We do not insure for loss to property caused directly by earth

movement even if the earth movement is caused by flood. Some examples of

earth movement that we do not cover are:

1. Earthquake;

2. Landslide;

3. Land subsidence;

4. Sinkholes;

5. Destabilization or movement of land that results from

accumulation of water in subsurface land areas; or

6. Gradual erosion.

We do, however, pay for losses from mudflow and land subsidence as a

result of erosion that are specifically covered under our definition of

flood (see A.1.c. and II.A.2.).

D. We do not insure for direct physical loss caused directly or

indirectly by:

1. The pressure or weight of ice;

2. Freezing or thawing;

3. Rain, snow, sleet, hail, or water spray;

4. Water, moisture, mildew, or mold damage that results primarily

from any condition:

a. Substantially confined to the insured building; or

b. That is within your control including, but not limited to:

(1) Design, structural, or mechanical defects;

(2) Failures, stoppages, or breakage of water or sewer lines,

drains, pumps, fixtures, or equipment; or

(3) Failure to inspect and maintain the property after a flood

recedes;

5. Water or water-borne material that:

a. Backs up through sewers or drains;

b. Discharges or overflows from a sump, sump pump, or related

equipment; or

c. Seeps or leaks on or through the covered property;

unless there is a flood in the area and the flood is the proximate cause

of the sewer or drain backup, sump pump discharge or overflow, or the

seepage of water;

6. The pressure or weight of water unless there is a flood in the

area and the flood is the proximate cause of the damage from the

pressure or weight of water;

7. Power, heating, or cooling failure unless the failure results

from direct physical loss by or from flood to power, heating, or cooling

equipment situated on the described location;

8. Theft, fire, explosion, wind, or windstorm;

9. Anything that you or your agents do or conspire to do to cause

loss by flood deliberately; or

10. Alteration of the insured property that significantly increases

the risk of flooding.

E. We do not insure for loss to any building or personal property

located on land leased from the Federal Government, arising from or

incident to the flooding of the land by the Federal Government, where

the lease expressly holds the Federal Government harmless under flood

insurance issued under any Federal Government program.


VI. Deductibles


A. When a loss is covered under this policy, we will pay only that

part of the loss that exceeds the applicable deductible amount, subject

to the limit of liability that applies. The deductible amount 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, your deductible amount will be two times the

deductible that would otherwise apply to a completed building.

B. In each loss from flood, separate deductibles apply to the

building and personal property insured by this policy.

C. No deductible applies to:

1. III.C.2. Loss Avoidance Measures; or

2. III.D. Increased Cost of Compliance.


VII. General Conditions


A. Pair and Set Clause


In case of loss to an article that is part of a pair or set, we will

have the option of paying you:


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1. An amount equal to the cost of replacing the lost, damaged, or

destroyed article, less depreciation, or

2. An amount which represents the fair proportion of the total value

of the pair or set that the lost, damaged, or destroyed article bears to

the pair or set.


B. Concealment or Fraud and Policy Voidance


1. With respect to all insureds under this policy, this policy:

a. Is void,

b. Has no legal force or effect,

c. Cannot be renewed, and

d. Cannot be replaced by a new NFIP policy, if, before or after a

loss, you or any other insured or your agent have at any time:

(1) Intentionally concealed or misrepresented any material fact or

circumstance,

(2) Engaged in fraudulent conduct, or

(3) Made false statements relating to this policy or any other NFIP

insurance.

2. This policy will be void as of the date wrongful acts described

in B.1. above were committed.

3. Fines, civil penalties, and imprisonment under applicable Federal

laws may also apply to the acts of fraud or concealment described above.

4. This policy is also void for reasons other than fraud,

misrepresentation, or wrongful act. This policy is void from its

inception and has no legal force under the following conditions:

a. If the property is located in a community that was not

participating in the NFIP on the policy's inception date and did not

join or re-enter the program during the policy term and before the loss

occurred; or

b. If the property listed on the application is otherwise not

eligible for coverage under the NFIP.


C. Other Insurance


1. If a loss covered by this policy is also covered by other

insurance that includes flood coverage not issued under the Act, we will

not pay more than the amount of insurance that you are entitled to for

lost, damaged, or destroyed property insured under this policy subject

to the following:

a. We will pay only the proportion of the loss that the amount of

insurance that applies under this policy bears to the total amount of

insurance covering the loss, unless C.1.b. or c. below applies.

b. If the other policy has a provision stating that it is excess

insurance, this policy will be primary.

c. This policy will be primary (but subject to its own deductible)

up to the deductible in the other flood policy (except another policy as

described in C.1.b. above). When the other deductible amount is reached,

this policy will participate in the same proportion that the amount of

insurance under this policy bears to the total amount of both policies,

for the remainder of the loss.

2. Where this policy covers a condominium association and there is a

flood insurance policy in the name of a unit owner that covers the same

loss as this policy, then this policy will be primary.


D. Amendments, Waivers, Assignment


This policy cannot be changed nor can any of its provisions be

waived without the express written consent of the Federal Insurance

Administrator. No action that we take under the terms of this policy can

constitute a waiver of any of our rights. You may assign this policy in

writing when you transfer title of your property to someone else except

under these conditions:

1. When this policy covers only personal property; or

2. When this policy covers a structure during the course of

construction.


E. Cancellation of Policy by You


1. You may cancel this policy in accordance with the applicable

rules and regulations of the NFIP.

2. If you cancel this policy, you may be entitled to a full or

partial refund of premium also under the applicable rules and

regulations of the NFIP.


F. Non-Renewal of the Policy by Us


Your policy will not be renewed:

1. If the community where your covered property is located stops

participating in the NFIP; or

2. If your building has been declared ineligible under section 1316

of the Act.


G. Reduction and Reformation of Coverage


1. If the premium we received from you was not enough to buy the

kind and amount of coverage that you requested, we will provide only the

amount of coverage that can be purchased for the premium payment we

received.

2. The policy can be reformed to increase the amount of coverage

resulting from the reduction described in G.1. above to the amount you

requested as follows:

a. Discovery of Insufficient Premium or Incomplete Rating

Information Before a Loss.

(1) If we discover before you have a flood loss that your premium

payment was not enough to buy the requested amount of coverage, we will

send you and any mortgagee or trustee known to us a bill for the

required additional premium for the current policy term (or that portion

of the current policy term following any endorsement changing the amount

of coverage). If you or the mortgagee or trustee pay the additional

premium within 30 days from the date of our bill, we will reform the

policy to increase the


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amount of coverage to the originally requested amount effective to the

beginning of the current policy term (or subsequent date of any

endorsement changing the amount of coverage).

(2) If we determine before you have a flood loss that the rating

information we have is incomplete and prevents us from calculating the

additional premium, we will ask you to send the required information.

You must submit the information within 60 days of our request. Once we

determine the amount of additional premium for the current policy term,

we will follow the procedure in G.2.a.(1) above.

(3) If we do not receive the additional premium (or additional

information) by the date it is due, the amount of coverage can only be

increased by endorsement subject to any appropriate waiting period.

b. Discovery of Insufficient Premium or Incomplete Rating

Information After a Loss.

(1) If we discover after you have a flood loss that your premium

payment was not enough to buy the requested amount of coverage, we will

send you and any mortgagee or trustee known to us a bill for the

required additional premium for the current and the prior policy terms.

If you or the mortgagee or trustee pay the additional premium within 30

days of the date of our bill, we will reform the policy to increase the

amount of coverage to the originally requested amount effective to the

beginning of the prior policy term.

(2) If we discover after you have a flood loss that the rating

information we have is incomplete and prevents us from calculating the

additional premium, we will ask you to send the required information.

You must submit the information before your claim can be paid. Once we

determine the amount of additional premium for the current and prior

policy terms, we will follow the procedure in G.2.b.(1) above.

(3) If we do not receive the additional premium by the date it is

due, your flood insurance claim will be settled based on the reduced

amount of coverage. The amount of coverage can only be increased by

endorsement subject to any appropriate waiting period.

3. However, if we find that you or your agent intentionally did not

tell us, or falsified, any important fact or circumstance or did

anything fraudulent relating to this insurance, the provisions of

Condition B. above apply.


H. Policy Renewal


1. This policy will expire at 12:01 a.m. on the last day of the

policy term.

2. We must receive the payment of the appropriate renewal premium

within 30 days of the expiration date.

3. If we find, however, that we did not place your renewal notice

into the U.S. Postal Service, or if we did mail it, we made a mistake,

e.g., we used an incorrect, incomplete, or illegible address, which

delayed its delivery to you before the due date for the renewal premium,

then we will follow these procedures:

a. If you or your agent notified us, not later than one year after

the date on which the payment of the renewal premium was due, of

nonreceipt of a renewal notice before the due date for the renewal

premium, and we determine that the circumstances in the preceding

paragraph apply, we will mail a second bill providing a revised due

date, which will be 30 days after the date on which the bill is mailed.

b. If we do not receive the premium requested in the second bill by

the revised due date, then we will not renew the policy. In that case,

the policy will remain as an expired policy as of the expiration date

shown on the Declarations Page.

4. In connection with the renewal of this policy, we may ask you

during the policy term to re-certify, on a Recertification Questionnaire

that we will provide to you, the rating information used to rate your

most recent application for or renewal of insurance.


I. Conditions Suspending or Restricting Insurance


We are not liable for loss that occurs while there is a hazard that

is increased by any means within your control or knowledge.


J. Requirements in Case of Loss


In case of a flood loss to insured property, you must:

1. Give prompt written notice to us;

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;

3. Prepare an inventory of damaged property showing the quantity,

description, actual cash value, and amount of loss. Attach all bills,

receipts, and related documents;

4. Within 60 days after the loss, send us a proof of loss, which is

your statement of the amount you are claiming under the policy signed

and sworn to by you, and which furnishes us with the following

information:

a. The date and time of loss;

b. A brief explanation of how the loss happened;

c. Your interest (for example, ``owner'') and the interest, if any,

of others in the damaged property;

d. Details of any other insurance that may cover the loss;

e. Changes in title or occupancy of the insured property during the

term of the policy;

f. Specifications of damaged buildings and detailed repair

estimates;


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g. Names of mortgagees or anyone else having a lien, charge, or

claim against the insured property;

h. Details about who occupied any insured building at the time of

loss and for what purpose; and

i. The inventory of damaged property described in J.3. above.

5. In completing the proof of loss, you must use your own judgment

concerning the amount of loss and justify that amount.

6. You must cooperate with the adjuster or representative in the

investigation of the claim.

7. 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

complete it. However, this is a matter of courtesy only, and you must

still send us a proof of loss within sixty days after the loss even if

the adjuster does not furnish the form or help you complete it.

8. We have not authorized the adjuster to approve or disapprove

claims or to tell you whether we will approve your claim.

9. At our option, we may accept the adjuster's report of the loss

instead of your proof of loss. The adjuster's report will include

information about your loss and the damages you sustained. You must sign

the adjuster's report. At our option, we may require you to swear to the

report.


K. Our Options After a Loss


Options we may, in our sole discretion, exercise after loss include

the following:

1. At such reasonable times and places that we may designate, you

must:

a. Show us or our representative the damaged property;

b. Submit to examination under oath, while not in the presence of

another insured, and sign the same; and

c. Permit us to examine and make extracts and copies of:

(1) Any policies of property insurance insuring you against loss and

the deed establishing your ownership of the insured real property;

(2) Condominium association documents including the Declarations of

the condominium, its Articles of Association or Incorporation, Bylaws,

and rules and regulations; and

(3) All books of accounts, bills, invoices, and other vouchers, or

certified copies pertaining to the damaged property if the originals are

lost.

2. We may request, in writing, that you furnish us with a complete

inventory of the lost, damaged, or destroyed property, including:

a. Quantities and costs;

b. Actual cash values;

c. Amounts of loss claimed;

d. Any written plans and specifications for repair of the damaged

property that you can reasonably make available to us; and

e. Evidence that prior flood damage has been repaired.

3. If we give you written notice within 30 days after we receive

your signed, sworn proof of loss, we may:

a. Repair, rebuild, or replace any part of the lost, damaged, or

destroyed property with material or property of like kind and quality or

its functional equivalent; and

b. Take all or any part of the damaged property at the value that we

agree upon or its appraised value.


L. No Benefit to Bailee


No person or organization, other than you, having custody of covered

property will benefit from this insurance.


M. Loss Payment


1. We will adjust all losses with you. We will pay you unless some

other person or entity is named in the policy or is legally entitled to

receive payment. Loss will be payable 60 days after we receive 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:

a. We reach an agreement with you;

b. There is an entry of a final judgment; or

c. There is a filing of an appraisal award with us, as provided in

VII. P.

2. If we reject your proof of loss in whole or in part you may:

a. Accept such denial of your claim;

b. Exercise your rights under this policy; or

c. File an amended proof of loss as long as it is filed within 60

days of the date of the loss.


N. Abandonment


You may not abandon damaged or undamaged insured property to us.


O. Salvage


We may permit you to keep damaged insured property 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.


P. Appraisal


If you and we fail to agree on the actual cash value of the damaged

property so as to determine the amount of loss, either may demand an

appraisal of the loss. In this event, you and we will each choose a

competent and impartial appraiser within 20 days after receiving a

written request from the other. The two appraisers will choose an

umpire. If they cannot agree upon an umpire within 15 days, you or we

may request that the choice be made by a judge of a court of record in

the


[[Page 283]]


state where the insured property is located. The appraisers will

separately state the actual cash value and the amount of loss to each

item. If the appraisers submit a written report of an agreement to us,

the amount agreed upon will be the amount of loss. If they fail to

agree, they will submit their differences to the umpire. A decision

agreed to by any two will set the amount of actual cash value and loss.

Each party will:

1. Pay its own appraiser; and

2. Bear the other expenses of the appraisal and umpire equally.


Q. Mortgage Clause


The word ``mortgagee'' includes trustee.

Any loss payable under Coverage A--Building Property will be paid to

any mortgagee of whom we have actual notice, as well as any other

mortgagee or loss payee determined to exist at the time of loss, and

you, as interests appear. If more than one mortgagee is named, the order

of payment will be the same as the order of precedence of the mortgages.

If we deny your claim, that denial will not apply to a valid claim of

the mortgagee, if the mortgagee:

1. Notifies us of any change in the ownership or occupancy, or

substantial change in risk of which the mortgagee is aware;

2. Pays any premium due under this policy on demand if you have

neglected to pay the premium; and

3. Submits a signed, sworn proof of loss within 60 days after

receiving notice from us of your failure to do so.

All terms of this policy apply to the mortgagee.

The mortgagee has the right to receive loss payment even if the

mortgagee has started foreclosure or similar action on the building.

If we decide to cancel or not renew this policy, it will continue in

effect for the benefit of the mortgagee only for 30 days after we notify

the mortgagee of the cancellation or non-renewal.

If we pay the mortgagee for any loss and deny payment to you, we are

subrogated to all the rights of the mortgagee granted under the mortgage

on the property. Subrogation will not impair the right of the mortgagee

to recover the full amount of the mortgagee's claim.


R. Suit Against Us


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 one year of the date of the written

denial of all or part of the 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. This requirement applies to

any claim that you may have under this policy and to any dispute that

you may have arising out of the handling of any claim under the policy.


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 that 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.


T. Continuous Lake Flooding


1. If an insured building has been flooded by rising lake waters

continuously for 90 days or more and it appears reasonably certain that

a continuation of this flooding will result in a covered loss to the

insured building equal to or greater than the building policy limits

plus the deductible 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:

a. To make no further claim under this policy;

b. Not to seek renewal of this policy;

c. Not to apply for any flood insurance under the Act for property

at the described location; and

d. Not to seek a premium refund for current or prior terms.

If the policy term ends before the insured building has been flooded

continuously for 90 days, the provisions of this paragraph T.1. will

apply when as the insured building suffers a covered loss before the

policy term ends.

2. If your insured building is subject to continuous lake flooding

from a closed basin lake, you may elect to file a claim under either

paragraph T.1. above or this paragraph T.2. (A ``closed basin lake'' is

a natural lake from which water leaves primarily through evaporation and

whose surface area now exceeds or has exceeded one square mile at any

time in the recorded past. Most of the nation's closed basin lakes are

in the western half of the United States, where annual evaporation

exceeds annual precipitation and where lake levels and surface areas are

subject to considerable fluctuation due to wide variations in the

climate. These lakes may overtop their basins on rare occasions.) Under

this paragraph T.2 we will pay your


[[Page 284]]


claim as if the building is a total loss even though it has not been

continuously inundated for 90 days, subject to the following conditions:

a. Lake flood waters must damage or imminently threaten to damage

your building.

b. Before approval of your claim, you must:

(1) Agree to a claim payment that reflects your buying back the

salvage on a negotiated basis; and

(2) Grant the conservation easement described in FEMA's ``Policy

Guidance for Closed Basin Lakes,'' to be recorded in the office of the

local recorder of deeds. FEMA, in consultation with the community in

which the property is located, will identify on a map an area or areas

of special consideration (ASC) in which there is a potential for flood

damage from continuous lake flooding. FEMA will give the community the

agreed-upon map showing the ASC. This easement will only apply to that

portion of the property in the ASC. It will allow certain agricultural

and recreational uses of the land. The only structures that it will

allow on any portion of the property within the ASC are certain, simple

agricultural and recreational structures. If any of these allowable

structures are insurable buildings under the NFIP and are insured under

the NFIP, they will not be eligible for the benefits of this paragraph

T.2. If a U.S. Army Corps of Engineers certified flood control project

or otherwise certified flood control project later protects the

property, FEMA will, upon request, amend the ASC to remove areas

protected by those projects. The restrictions of the easement will then

no longer apply to any portion of the property removed from the ASC; and

(3) Comply with paragraphs T.1.a. through T.1.d. above.

c. Within 90 days of approval of your claim, you must move your

building to a new location outside the ASC. FEMA will give you an

additional 30 days to move if you show that there is sufficient reason

to extend the time.

d. Before the final payment of your claim, you must acquire an

elevation certificate and a floodplain development permit from the local

floodplain administrator for the new location of your building.

e. Before the approval of your claim, the community having

jurisdiction over your building must:

(1) Adopt a permanent land use ordinance, or a temporary moratorium

for a period not to exceed 6 months to be followed immediately by a

permanent land use ordinance, that is consistent with the provisions

specified in the easement required in paragraph T.2.b. above.

(2) Agree to declare and report any violations of this ordinance to

FEMA so that under Sec. 1316 of the National Flood Insurance Act of

1968, as amended, flood insurance to the building can be denied; and

(3) Agree to maintain as deed-restricted, for purposes compatible

with open space or agricultural or recreational use only, any affected

property the community acquires an interest in. These deed restrictions

must be consistent with the provisions of paragraph T.2.b. above except

that even if a certified project protects the property, the land use

restrictions continue to apply if the property was acquired under the

Hazard Mitigation Grant Program or the Flood Mitigation Assistance

Program. If a non-profit land trust organization receives the property

as a donation, that organization must maintain the property as deed-

restricted, consistent with the provisions of paragraph T.2.b. above.

f. Before the approval of your claim, the affected State must take

all action set forth in FEMA's ``Policy Guidance for Closed Basin

Lakes.''

g. You must have NFIP flood insurance coverage continuously in

effect from a date established by FEMA until you file a claim under this

paragraph T.2. If a subsequent owner buys NFIP insurance that goes into

effect within 60 days of the date of transfer of title, any gap in

coverage during that 60-day period will not be a violation of this

continuous coverage requirement. For the purpose of honoring a claim

under this paragraph T.2, we will not consider to be in effect any

increased coverage that became effective after the date established by

FEMA. The exception to this is any increased coverage in the amount

suggested by your insurer as an inflation adjustment.

h. This paragraph T.2. will be in effect for a community when the

FEMA Regional Director for the affected region provides to the

community, in writing, the following:

(1) Confirmation that the community and the State are in compliance

with the conditions in paragraphs T.2.e. and T.2.f. above, and

(2) The date by which you must have flood insurance in effect.


U. Duplicate Policies Not Allowed


1. Property may not be insured under more than one NFIP policy.

If we find that the duplication was not knowingly created, we will

give you written notice. The notice will advise you that you may choose

one of several options under the following procedures:

a. If you choose to keep in effect the policy with the earlier

effective date, you may also choose to add the coverage limits of the

later policy to the limits of the earlier policy. The change will become

effective as of the effective date of the later policy.

b. If you choose to keep in effect the policy with the later

effective date, you may also choose to add the coverage limits of the

earlier policy to the limits of the later policy. The change will be

effective as of the effective date of the later policy.


[[Page 285]]


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 will

the resulting coverage limits exceed the permissible limits of coverage

under the Act or your insurable interest, whichever is less. We will

make a refund to you, according to applicable NFIP rules, of the premium

for the policy not being kept in effect.

2. Your option under this Condition U. Duplicate Policies Not

Allowed to elect which NFIP policy to keep in effect does not apply when

duplicates have been knowingly created. Losses occurring under such

circumstances will be adjusted according to the terms and conditions of

the earlier policy. The policy with the later effective date must be

canceled.


V. Loss Settlement


We will pay the least of the following amounts after application of

the deductible:

1. The applicable amount of insurance under this policy;

2. The actual cash value; or

3. 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.


VIII. Liberalization Clause


If we make a change that broadens your coverage under this edition

of our policy, but does not require any additional premium, then that

change will automatically apply to your insurance as of the date we

implement the change, provided that this implementation date falls

within 60 days before or during the policy term stated on the

Declarations Page.


IX. What Law Governs


This policy and all disputes arising from the handling of any claim

under the policy are governed exclusively 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.

In Witness Whereof, we have signed this policy below and hereby

enter into this Insurance Agreement.

Jo Ann Howard,

Administrator, Federal Insurance Administration.


[65 FR 60778, Oct. 12, 2000, as amended at 68 FR 9897, Mar. 3, 2003]


Appendix A(3) to Part 61


Federal Emergency Management Agency Federal Insurance Administration


Standard Flood Insurance Policy


RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY


I. Agreement


Please read the policy carefully. The flood insurance provided is

subject to limitations, restrictions, and exclusions.

This policy covers only a residential condominium building in a

regular program community. If the community reverts to emergency program

status during the policy term and remains as an emergency program

community at time of renewal, this policy cannot be renewed.

The Federal Emergency Management Agency (FEMA) provides flood

insurance under the terms of the National Flood Insurance Act of 1968

and its Amendments, and Title 44 of the Code of Federal Regulations.

We will pay you for direct physical loss by or from flood to your

insured property if you:

1. Have paid the correct premium;

2. Comply with all terms and conditions of this policy; and

3. Have furnished accurate information and statements.

We have the right to review the information you give us at any time

and to revise your policy based on our review.


II. Definitions


A. In this policy, ``you'' and ``your'' refer to the insured(s)

shown on the Declarations Page of this policy. Insured(s) includes: 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 loss in the order of precedence. ``We,'' ``us,'' and ``our''

refer to the insurer.

Some definitions are complex because they are provided as they

appear in the law or regulations, or result from court cases. The

precise definitions are intended to protect you.

``Flood'', as used in this flood insurance policy, means:

1. A general and temporary condition of partial or complete

inundation of two or more acres of normally dry land area or of two or

more properties (one of which is your property) from:

a. Overflow of inland or tidal waters;

b. Unusual and rapid accumulation or runoff of surface waters from

any source;

c. Mudflow.

2. Collapse or subsidence of land along the shore of a lake or

similar body of water as a result of erosion or undermining caused by


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waves or currents of water exceeding anticipated cyclical levels which

result in a flood as defined in A.1.a above.

B. The following are the other key definitions we use in this

policy:

1. Act. The National Flood Insurance Act of 1968 and any amendments

to it.

2. Actual Cash Value. The cost to replace an insured item of

property at the time of loss, less the value of its physical

depreciation.

3. Application. The statement made and signed by you or your agent

in applying for this policy. The application gives information we use to

determine the eligibility of the risk, the kind of policy to be issued,

and the correct premium payment. The application is part of this flood

insurance policy. For us to issue you a policy, the correct premium

payment must accompany the application.

4. Base Flood. A flood having a one percent chance of being equaled

or exceeded in any given year.

5. Basement. Any area of the building, including any sunken room or

sunken portion of a room, having its floor below ground level (subgrade)

on all sides.

6. Building.

a. A structure with two or more outside rigid walls and a fully

secured roof, that is affixed to a permanent site;

b. A manufactured home (``a manufactured home,'' also known as a

mobile home, is a structure: built on a permanent chassis, transported

to its site in one or more sections, and affixed to a permanent

foundation); or

c. A travel trailer without wheels, built on a chassis and affixed

to a permanent foundation, that is regulated under the community's

floodplain management and building ordinances or laws.

Building does not mean a gas or liquid storage tank or a

recreational vehicle, park trailer or other similar vehicle, except as

described in B.6.c., above.

7. Cancellation. The ending of the insurance coverage provided by

this policy before the expiration date.

8. Condominium. That form of ownership of real property in which

each unit owner has an undivided interest in common elements.

9. Condominium Association. The entity, formed by the unit owners,

responsible for the maintenance and operation of:

a. Common elements owned in undivided shares by unit owners; and

b. Other real property in which the unit owners have use rights;

where membership in the entity is a required condition of unit

ownership.

10. Declarations Page. A computer-generated summary of information

you provided 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.

11. Described Location. The location where the insured building or

personal property is found. The described location is shown on the

Declarations Page.

12. Direct Physical Loss By or From Flood. Loss or damage to insured

property, directly caused by a flood. There must be evidence of physical

changes to the property.

13. Elevated Building. A building that has no basement and that has

its lowest elevated floor raised above ground level by foundation walls,

shear walls, posts, piers, pilings, or columns.

14. Emergency Program. The initial phase of a community's

participation in the National Flood Insurance Program. During this

phase, only limited amounts of insurance are available under the Act.

15. Expense Constant. A flat charge you must pay on each new or

renewal policy to defray the expenses of the Federal Government related

to flood insurance.

16. Federal Policy Fee. A flat charge you must pay on each new or

renewal policy to defray certain administrative expenses incurred in

carrying out the National Flood Insurance Program. This fee covers

expenses not covered by the expense constant.

17. Improvements. Fixtures, alterations, installations, or additions

comprising a part of the residential condominium building, including

improvements in the units.

18. Mudflow. A river of liquid and flowing mud on the surfaces of

normally dry land areas, as when earth is carried by a current of water.

Other earth movements, such as landslide, slope failure, or a saturated

soil mass moving by liquidity down a slope, are not mudflows.

19. National Flood Insurance Program (NFIP). 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.

20. Policy. The entire written contract between you and us. It

includes:

a. This printed form;

b. The application and Declarations Page;

c. Any endorsement(s) that may be issued; and

d. Any renewal certificate indicating that coverage has been

instituted for a new policy and new policy term.

Only one building, which you specifically described in the

application, may be insured under this policy.

21. Pollutants. Substances that include, but are not limited to, any

solid, liquid, gaseous, or thermal irritant or contaminant, including

smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste. Waste

includes, but is not limited to, materials to be recycled,

reconditioned, or reclaimed.


[[Page 287]]


22. Post-FIRM Building. A building for which construction or

substantial improvement occurred after December 31, 1974, or on or after

the effective date of an initial Flood Insurance Rate Map (FIRM),

whichever is later.

23. Probation Premium. A flat charge you must pay on each new or

renewal policy issued covering property in a community that the NFIP has

placed on probation under the provisions of 44 CFR 59.24.

24. Regular Program. The final phase of a community's participation

in the National Flood Insurance Program. In this phase, a Flood

Insurance Rate Map is in effect and full limits of coverage are

available under the Act.

25. Residential Condominium Building. A building, owned and

administered as a condominium, containing one or more family units and

in which at least 75% of the floor area is residential.

26. Special Flood Hazard Area. An area having special flood or

mudflow, and/or flood-related erosion hazards, and shown on a Flood

Hazard Boundary Map or Flood Insurance Rate Map as Zone A, AO, A1-A30,

AE, A99, AH, AR, AR/A, AR/AE, AR/AH, AR/AO, AR/A1-A30, V1-V30, VE, or V.

27. Unit. A single-family unit in a residential condominium

building.

28. Valued Policy. A policy in which the insured and the insurer

agree on the value of the property insured, that value being payable in

the event of a total loss. The Standard Flood Insurance Policy is not a

valued policy.


III. Property Covered


A. Coverage A--Building Property


We insure against direct physical loss by or from flood to:

1. The residential condominium building described on the

Declarations Page at the described location, including all units within

the building and the improvements within the units.

2. We also insure such building property for a period of 45 days at

another location, as set forth in III.C.2.b., Property Removed to

Safety.

3. Additions and extensions attached to and in contact with the

building by means of a rigid exterior wall, a solid load-bearing

interior wall, a stairway, an elevated walkway, or a roof. At your

option, additions and extensions connected by any of these methods may

be separately insured. Additions and extensions attached to and in

contact with the building by means of a common interior wall that is not

a solid load-bearing wall are always considered part of the building and

cannot be separately insured.

4. The following fixtures, machinery and equipment, including its

units, which are covered under Coverage A only:

a. Awnings and canopies;

b. Blinds;

c. Carpet permanently installed over unfinished flooring;

d. Central air conditioners;

e. Elevator equipment;

f. Fire extinguishing apparatus;

g. Fire sprinkler systems;

h. Walk-in freezers;

i. Furnaces;

j. Light fixtures;

k. Outdoor antennas and aerials fastened to buildings;

l. Permanently installed cupboards, bookcases, paneling, and

wallpaper;

m. Pumps and machinery for operating pumps;

n. Ventilating equipment;

o. Wall mirrors, permanently installed; and

p. In the units within the building, installed:

(1) Built-in dishwashers;

(2) Built-in microwave ovens;

(3) Garbage disposal units;

(4) Hot water heaters, including solar water heaters;

(5) Kitchen cabinets;

(6) Plumbing fixtures;

(7) Radiators;

(8) Ranges;

(9) Refrigerators; and

(10) Stoves.

5. Materials and supplies to be used for construction, alteration or

repair of the insured building while the materials and supplies are

stored in a fully enclosed building at the described location or on an

adjacent property.

6. A building under construction, alteration or repair at the

described location.

a. If the structure is not yet walled or roofed as described in the

definition for building (see II.B.6.a.), then coverage applies:

(1) Only while such work is in progress; or

(2) If such work is halted, only for a period of up to 90 continuous

days thereafter.

b. However, coverage does not apply until the building is walled and

roofed if the lowest floor, including the basement floor, of a non-

elevated building or the lowest elevated floor of an elevated building

is:

(1) Below the base flood elevation in Zones AH, AE, A1-30, AR, AR/

AE, AR/AH, AR/A1-30, AR/A, AR/AO; or

(2) 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-V30 and the

top of the floor in Zones AH, AE, A1-A30, AR, AR/AE, AR/AH, AR/A1-A30,

AR/A, AR/AO.

7. A manufactured home or a travel trailer as described in the

Definitions Section (See II.B.b. and c.).


[[Page 288]]


If the manufactured home is in a special flood hazard area, it must

be anchored in the following manner at the time of the loss:

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

b. In accordance with the manufacturer's specifications; or

c. In compliance with the community's floodplain management

requirements unless it has been continuously insured by the NFIP at the

same described location since September 30, 1982.

8. Items of property in a building enclosure below the lowest

elevated floor of an elevated post-FIRM building located in zones A1-

A30, AE, AH, AR, AR/A, AR/AE, AR/AH, AR/A1-A30, V1-V30, or VE, or in a

basement, regardless of the zone. Coverage is limited to the following:

a. Any of the following items, if installed in their functioning

locations and, if necessary for operation, connected to a power source:

(1) Central air conditioners;

(2) Cisterns and the water in them;

(3) Drywall for walls and ceilings in a basement and the cost of

labor to nail it, unfinished and unfloated and not taped, to the

framing;

(4) Electrical junction and circuit breaker boxes;

(5) Electrical outlets and switches;

(6) Elevators, dumbwaiters, and related equipment, except for

related equipment installed below the base flood elevation after

September 30, 1987;

(7) Fuel tanks and the fuel in them;

(8) Furnaces and hot water heaters;

(9) Heat pumps;

(10) Nonflammable insulation in a basement;

(11) Pumps and tanks used in solar energy systems;

(12) Stairways and staircases attached to the building, not

separated from it by elevated walkways;

(13) Sump pumps;

(14) Water softeners and the chemicals in them, water filters and

faucets installed as an integral part of the plumbing system;

(15) Well water tanks and pumps;

(16) Required utility connections for any item in this list; and

(17) Footings, foundations, posts, pilings, piers, or other

foundation walls and anchorage systems required to support a building.

b. Clean-up.


B. Coverage B--Personal Property


1. If you have purchased personal property coverage, we insure,

subject to B.2. and B.3. below, against direct physical loss by or from

flood to personal property that is inside the fully enclosed insured

building and is:

a. Owned by the unit owners of the condominium association in

common, meaning property in which each unit owner has an undivided

ownership interest; or

b. Owned solely by the condominium association and used exclusively

in the conduct of the business affairs of the condominium association.

We also insure such personal property for 45 days while stored at a

temporary location, as set forth in III.C.2.b., Property Removed to

Safety.

2. Coverage for personal property includes the following property,

subject to B.1. above, which is covered under Coverage B only:

a. Air conditioning units--portable or window type;

b. Carpet, not permanently installed, over unfinished flooring;

c. Carpets over finished flooring;

d. Clothes washers and dryers;

e. ``Cook-out'' grills;

f. Food freezers, other than walk-in, and the food in any freezer;

g. Outdoor equipment and furniture stored inside the insured

building;

h. Ovens and the like; and

i. Portable microwave ovens and portable dishwashers.

3. Coverage for items of property in a building enclosure below the

lowest elevated floor of an elevated post-FIRM building located in zones

A1-A30, AE, AH, AR, AR/A, AR/AE, AR/AH, AR/A1-A30, V1-V30, or VE, or in

a basement, regardless of the zone, is limited to the following items,

if installed in their functioning locations and, if necessary for

operation, connected to a power source:

a. Air conditioning units--portable or window type;

b. Clothes washers and dryers; and

c. Food freezers, other than walk-in, and food in any freezer.

4. Special Limits. We will pay no more than $2,500 for any one loss

to one or more of the following kinds of personal property:

a. Artwork, photographs, collectibles, or memorabilia, including but

not limited to, porcelain or other figures, and sports cards;

b. Rare books or autographed items;

c. Jewelry, watches, precious and semi-precious stones, or articles

of gold, silver, or platinum;

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

value.

5. We will pay only for the functional value of antiques.


C. Coverage C--Other Coverages


1. Debris Removal

a. We will pay the expense to remove non-owned debris that is on or

in insured property and debris of insured property anywhere.

b. If you or a member of your household perform the removal work,

the value of your work will be based on the Federal minimum wage.


[[Page 289]]


c. This coverage does not increase the Coverage A or Coverage B

limit of liability.

2. Loss Avoidance Measures

a. Sandbags, Supplies, and Labor

(1) We will pay up to $1,000 for the costs you incur to protect the

insured building from a flood or imminent danger of flood, for the

following:

(a) Your reasonable expenses to buy:

(i) Sandbags, including sand to fill them;

(ii) Fill for temporary levees;

(iii) Pumps; and

(iv) Plastic sheeting and lumber used in connection with these

items; and

(b) The value of work, at the Federal minimum wage, that you

perform.

(2) This coverage for Sandbags, Supplies, and Labor applies only if

damage to insured property by or from flood is imminent and the threat

of flood damage is apparent enough to lead a person of common prudence

to anticipate flood damage. One of the following must also occur:

(a) A general and temporary condition of flooding in the area near

the described location must occur, even if the flood does not reach the

insured building; or

(b) A legally authorized official must issue an evacuation order or

other civil order for the community in which the insured building is

located calling for measures to preserve life and property from the

peril of flood. This coverage does not increase the Coverage A or

Coverage B limit of liability.

b. Property Removed to Safety

(1) We will pay up to $1,000 for the reasonable expenses you incur

to move insured property to a place other than the described location

that contains the property in order to protect it from flood or the

imminent danger of flood.

Reasonable expenses include the value of work, at the Federal

minimum wage, that you perform.

(2) If you move insured property to a location other than the

described location that contains the property, in order to protect it

from flood or the imminent danger of flood, we will cover such property

while at that location for a period of 45 consecutive days from the date

you begin to move it there. The personal property that is moved must be

placed in a fully enclosed building, or otherwise reasonably protected

from the elements.

Any property removed, including a moveable home described in II.6.b.

and c., must be placed above ground level or outside of the special

flood hazard area.

This coverage does not increase the Coverage A or Coverage B limit

of liability.


D. Coverage D--Increased Cost of Compliance


1. General.

This policy pays you to comply with a State or local floodplain

management law or ordinance affecting repair or reconstruction of a

structure suffering flood damage. Compliance activities eligible for

payment are: elevation, floodproofing, relocation, or demolition (or any

combination of these activities) of your structure. Eligible

floodproofing activities are limited to:

a. Non-residential structures.

b. Residential structures with basements that satisfy FEMA's

standards published in the Code of Federal Regulations [44 CFR 60.6 (b)

or (c)].

2. Limit of Liability.

We will pay you up to $30,000 under this Coverage D--Increased Cost

of Compliance, which only applies to policies with building coverage

(Coverage A). Our payment of claims under Coverage D is in addition to

the amount of coverage which you selected on the application and which

appears on the Declarations Page. But the maximum you can collect under

this policy for both Coverage A--Building Property and Coverage D--

Increased Cost of Compliance cannot exceed the maximum permitted under

the Act. We do not charge a separate deductible for a claim under

Coverage D.

3. Eligibility.

a. A structure covered under Coverage A--Building Property

sustaining a loss caused by a flood as defined by this policy must:

(1) Be a ``repetitive loss structure.'' A ``repetitive loss

structure'' is one that meets the following conditions:

(a) The structure is covered by a contract of flood insurance issued

under the NFIP.

(b) The structure has suffered flood damage on 2 occasions during a

10-year period which ends on the date of the second loss.

(c) The cost to repair the flood damage, on average, equaled or

exceeded 25% of the market value of the structure at the time of each

flood loss.

(d) In addition to the current claim, the NFIP must have paid the

previous qualifying claim, and the State or community must have a

cumulative, substantial damage provision or repetitive loss provision in

its floodplain management law or ordinance being enforced against the

structure; 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. The State or community must have a substantial damage

provision in its floodplain management law or ordinance being enforced

against the structure.

b. This Coverage D pays you to comply with State or local floodplain

management laws or ordinances that meet the minimum standards of the

National Flood Insurance Program found in the Code of Federal

Regulations at 44 CFR 60.3. We pay for compliance activities that exceed

those standards under these conditions:

(1) 3.a.(1) above.


[[Page 290]]


(2) 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 flood-damaged 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 apply to situations in B, C, X, or D zones where the

community has derived its own elevations and is enforcing elevation or

floodproofing requirements for flood-damaged structures to elevations

derived solely by the community.

(3) 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.

c. 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 Coverage D.

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

D.5.g.below relating to improvements.

e. 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 before the

present loss from the applicable floodplain management requirements.

4. Conditions.

a. When a structure covered under Coverage A--Building Property

sustains a loss caused by a flood, our payment for the loss under this

Coverage D will be for the increased cost to elevate, floodproof,

relocate, or demolish (or any combination of these activities) caused by

the enforcement of current State or local floodplain management

ordinances or laws. Our payment for eligible demolition activities will

be for the cost to demolish and clear the site of the building debris or

a portion thereof caused by the 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 proper abandonment of on-site

utilities.

b. 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.

5. Exclusions.

Under this Coverage D--Increased Cost of Compliance, we will not pay

for:

a. The cost to comply with any floodplain management law or

ordinance in communities participating in the Emergency Program.

b. 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.

c. The loss in value to any insured building or other structure due

to the requirements of any ordinance or law.

d. 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.

e. Any Increased Cost of Compliance under this Coverage D:

(1) Until the building is elevated, floodproofed, demolished, or

relocated on the same or to another premises; and

(2) Unless the building is elevated, floodproofed, demolished, or

relocated as soon as reasonably possible after the loss, not to exceed

two years.

f. Any code upgrade requirements, e.g., plumbing or electrical

wiring, not specifically related to the State or local floodplain

management law or ordinance.

g. 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.

h. Loss due to any ordinance or law that you were required to comply

with before the current loss.

i. 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.

j. Increased Cost of Compliance for a garage or carport.

k. Any structure insured under an NFIP Group Flood Insurance Policy.

l. 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. Other Provisions.


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a. Increased Cost of Compliance coverage will not be included in the

calculation to determine whether coverage meets the coinsurance

requirement for replacement cost coverage under VIII. General

Conditions, V. Loss Settlement.

b. All other conditions and provisions of this policy apply.


IV. Property Not Covered


We do not cover any of the following:

1. Personal property not inside the fully enclosed building;

2. A building, and personal property in it, located entirely in, on,

or over water or seaward of mean high tide, if constructed or

substantially improved after September 30, 1982;

3. Open structures, including a building used as a boathouse or any

structure or building into which boats are floated, and personal

property located in, on, or over water;

4. Recreational vehicles other than travel trailers described in the

Definitions Section (see II.B.6.c.) whether affixed to a permanent

foundation or on wheels;

5. Self-propelled vehicles or machines, including their parts and

equipment.

However, we do cover self-propelled vehicles or machines, provided

they are not licensed for use on public roads and are:

a. Used mainly to service the described location, or

b. Designed and used to assist handicapped persons, while the

vehicles or machines are inside a building at the described location;

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

or animals;

7. Accounts, bills, coins, currency, deeds, evidences of debt,

medals, money, scrip, stored value cards, postage stamps, securities,

bullion, manuscripts, or other valuable papers;

8. Underground structures and equipment, including wells, septic

tanks, and septic systems;

9. Those portions of walks, walkways, decks, driveways, patios, and

other surfaces, all whether protected by a roof or not, located outside

the perimeter, exterior walls of the insured building;

10. Containers, including related equipment, such as, but not

limited to, tanks containing gases or liquids;

11. Buildings and all their contents if more than 49% of the actual

cash value of the building is below ground, unless the lowest level is

at or above the base flood elevation and is below ground by reason of

earth having been used as insulation material in conjunction with energy

efficient building techniques;

12. Fences, retaining walls, seawalls, bulkheads, wharves, piers,

bridges, and docks;

13. Aircraft or watercraft, or their furnishings and equipment;

14. Hot tubs and spas that are not bathroom fixtures, and swimming

pools, and their equipment such as, but not limited to, heaters,

filters, pumps, and pipes, wherever located;

15. Property not eligible for flood insurance pursuant to the

provisions of the Coastal Barrier Resources Act and the Coastal Barrier

Improvements Act of 1990 and amendments to these Acts;

16. Personal property used in connection with any incidental

commercial occupancy or use of the building.


V. Exclusions


A. We only pay for direct physical loss by or from flood, which

means that we do not pay you for:

1. Loss of revenue or profits;

2. Loss of access to the insured property or described location;

3. Loss of use of the insured property or described location;

4. Loss from interruption of business or production;

5. Any additional living expenses incurred while the insured

building is being repaired or is unable to be occupied for any reason;

6. The cost of complying with any ordinance or law requiring or

regulating the construction, demolition, remodeling, renovation, or

repair of property, including removal of any resulting debris. This

exclusion does not apply to any eligible activities that we describe in

Coverage D--Increased Cost of Compliance; or

7. Any other economic loss.

B. We do not insure a loss directly or indirectly caused by a flood

that is already in progress at the time and date:

1. The policy term begins; or

2. Coverage is added at your request.

C. We do not insure for loss to property caused directly by earth

movement even if the earth movement is caused by flood. Some examples of

earth movement that we do not cover are:

1. Earthquake;

2. Landslide;

3. Land subsidence;

4. Sinkholes;

5. Destabilization or movement of land that results from

accumulation of water in subsurface land areas; or

6. Gradual erosion.

We do, however, pay for losses from mudflow and land subsidence as a

result of erosion that are specifically covered under our definition of

flood (see II.A.1.c. and II.A.2.).

D. We do not insure for direct physical loss caused directly or

indirectly by:

1. The pressure or weight of ice;

2. Freezing or thawing;

3. Rain, snow, sleet, hail, or water spray;

4. Water, moisture, mildew, or mold damage that results primarily

from any condition:


[[Page 292]]


a. Substantially confined to the insured building; or

b. That is within your control including, but not limited to:

(1) Design, structural, or mechanical defects;

(2) Failures, stoppages, or breakage of water or sewer lines,

drains, pumps, fixtures, or equipment; or

(3) Failure to inspect and maintain the property after a flood

recedes;

5. Water or water-borne material that:

a. Backs up through sewers or drains;

b. Discharges or overflows from a sump, sump pump, or related

equipment; or

c. Seeps or leaks on or through insured property;

unless there is a flood in the area and the flood is the proximate cause

of the sewer, drain, or sump pump discharge or overflow, or the seepage

of water;

6. The pressure or weight of water unless there is a flood in the

area and the flood is the proximate cause of the damage from the

pressure or weight of water.

7. Power, heating, or cooling failure unless the failure results

from direct physical loss by or from flood to power, heating or cooling

equipment situated on the described location;

8. Theft, fire, explosion, wind, or windstorm;

9. Anything you or your agents do or conspire to do to cause loss by

flood deliberately; or

10. Alteration of the insured property that significantly increases

the risk of flooding.

E. We do not insure for loss to any building or personal property

located on land leased from the Federal Government, arising from or

incident to the flooding of the land by the Federal Government, where

the lease expressly holds the Federal Government harmless under flood

insurance issued under any Federal Government program.

F. We do not pay for the testing for or monitoring of pollutants

unless required by law or ordinance.


VI. Deductibles


A. When a loss is covered under this policy, we will pay only that

part of the loss that exceeds the applicable deductible amount, subject

to the limit of insurance that applies. The deductible amount 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, your deductible amount will be two times the

deductible that would otherwise apply to a completed building.

B. In each loss from flood, separate deductibles apply to the

building and personal property insured by this policy.

C. No deductible applies to:

1. III.C.2. Loss Avoidance Measures; or

2. III.D. Increased Cost of Compliance.


VII. Coinsurance


A. This Coinsurance Section applies only to coverage on the

building.

B. We will impose a penalty on loss payment unless the amount of

insurance applicable to the damaged building is:

1. At least 80% of its replacement cost; or

2. The maximum amount of insurance available for that building under

the NFIP, whichever is less.

C. If the actual amount of insurance on the building is less than

the required amount in accordance with the terms of VII. B. above, then

loss payment is determined as follows (subject to all other relevant

conditions in this policy, including those pertaining to valuation,

adjustment, settlement, and payment of loss):

1. Divide the actual amount of insurance carried on the building by

the required amount of insurance.

2. Multiply the amount of loss, before application of the

deductible, by the figure determined in C.1. above.

3. Subtract the deductible from the figure determined in C.2. above.

We will pay the amount determined in C.3. above, or the amount of

insurance carried, whichever is less. The amount of insurance carried,

if in excess of the applicable maximum amount of insurance available

under the NFIP, is reduced accordingly.


Examples


Example 1 (Inadequate Insurance)


Replacement value of the building--$250,000

Required amount of insurance--$200,000

(80% of replacement value of $250,000)

Actual amount of insurance carried--$180,000

Amount of the loss--$150,000

Deductible--$500

Step 1:180,000 / 200,000 = .90

(90% of what should be carried.)

Step 2: 150,000 x .90 = 135,000

Step 3: 135,000 - 500 = 134,500


We will pay no more than $134,500. The remaining $15,500 is not

covered due to the coinsurance penalty ($15,000) and application of the

deductible ($500).


Example 2 (Adequate Insurance)


Replacement value of the building--$500,000

Required amount of insurance--$400,000

(80% of replacement value of $500,000)

Actual amount of insurance carried--$400,000

Amount of the loss--$200,000

Deductible--$500


In this example there is no coinsurance penalty, because the actual

amount of insurance carried meets the required amount. We will pay no

more than $199,500 ($200,000 amount of loss minus the $500 deductible).


[[Page 293]]


D. In calculating the full replacement cost of a building:

1. The replacement cost value of any covered building property will

be included;

2. The replacement cost value of any building property not covered

under this policy will not be included; and

3. Only the replacement cost value of improvements installed by the

condominium association will be included.


VIII. General Conditions


A. Pair and Set Clause.

In case of loss to an article that is part of a pair or set, we will

have the option of paying you:

1. An amount equal to the cost of replacing the lost, damaged, or

destroyed article, less depreciation; or

2. An amount which represents the fair proportion of the total value

of the pair or set that the lost, damaged, or destroyed article bears to

the pair or set.

B. Concealment or Fraud and Policy Voidance.

1. With respect to all insureds under this policy, this policy:

a. Is void,

b. Has no legal force or effect,

c. Cannot be renewed, and

d. Cannot be replaced by a new NFIP policy, if, before or after a

loss, you or any other insured or your agent have at any time:

(1) Intentionally concealed or misrepresented any material fact or

circumstance,

(2) Engaged in fraudulent conduct, or

(3) Made false statements,

relating to this policy or any other NFIP insurance.

2. This policy will be void as of the date the wrongful acts

described in B.1. above were committed.

3. Fines, civil penalties, and imprisonment under applicable Federal

laws may also apply to the acts of fraud or concealment described above.

4. This policy is also void for reasons other than fraud,

misrepresentation, or wrongful act. This policy is void from its

inception and has no legal force under the following conditions:

a. If the property is located in a community that was not

participating in the NFIP on the policy's inception date and did not

join or re-enter the program during the policy term and before the loss

occurred; or

b. If the property listed on the application is not otherwise

eligible for coverage under the NFIP.

C. Other Insurance.

1. If a loss covered by this policy is also covered by other

insurance that includes flood coverage not issued under the Act, we will

not pay more than the amount of insurance that you are entitled to for

lost, damaged or destroyed property insured under this policy subject to

the following:

a. We will pay only the proportion of the loss that the amount of

insurance that applies under this policy bears to the total amount of

insurance covering the loss, unless C.1.b. or c. immediately below

applies.

b. If the other policy has a provision stating that it is excess

insurance, this policy will be primary.

c. This policy will be primary (but subject to its own deductible)

up to the deductible in the other flood policy (except another policy as

described in C.1.b. above). When the other deductible amount is reached,

this policy will participate in the same proportion that the amount of

insurance under this policy bears to the total amount of both policies,

for the remainder of the loss.

2. If there is a flood insurance policy in the name of a unit owner

that covers the same loss as this policy, then this policy will be

primary.

D. Amendments, Waivers, Assignment.

This policy cannot be changed nor can any of its provisions be

waived without the express written consent of the Federal Insurance

Administrator. No action that we take under the terms of this policy

constitutes a waiver of any of our rights. You may assign this policy in

writing when you transfer title of your property to someone else except

under these conditions:

1. When this policy covers only personal property; or

2. When this policy covers a structure during the course of

construction.

E. Cancellation of Policy by You.

1. You may cancel this policy in accordance with the applicable

rules and regulations of the NFIP.

2. If you cancel this policy, you may be entitled to a full or

partial refund of premium also under the applicable rules and

regulations of the NFIP.

F. Non-Renewal of the Policy by Us.

Your policy will not be renewed:

1. If the community where your covered property is located stops

participating in the NFIP, or

2. Your building has been declared ineligible under section 1316 of

the Act.

G. Reduction and Reformation of Coverage.

1. If the premium we received from you was not enough to buy the

kind and amount of coverage you requested, we will provide only the

amount of coverage that can be purchased for the premium payment we

received.

2. The policy can be reformed to increase the amount of coverage

resulting from the reduction described in G.1. above the amount that you

requested as follows:

a. Discovery of Insufficient Premium or Incomplete Rating

Information Before a Loss.

(1) If we discover before you have a flood loss that your premium

payment was not


[[Page 294]]


enough to buy the requested amount of coverage, we will send you and any

mortgagee or trustee known to us a bill for the required additional

premium for the current policy term (or that portion of the current

policy term following any endorsement changing the amount of coverage).

If you or the mortgagee or trustee pay the additional premium within 30

days from the date of our bill, we will reform the policy to increase

the amount of coverage to the originally requested amount effective to

the beginning of the current policy term (or subsequent date of any

endorsement changing the amount of coverage).

(2) If we determine before you have a flood loss that the rating

information we have is incomplete and prevents us from calculating the

additional premium, we will ask you to send the required information.

You must submit the information within 60 days of our request. Once we

determine the amount of additional premium for the current policy term,

we will follow the procedure in G.2.a.(1) above.

(3) If we do not receive the additional premium (or additional

information) by the date it is due, the amount of coverage can only be

increased by endorsement subject to any appropriate waiting period.

b. Discovery of Insufficient Premium or Incomplete Rating

Information After a Loss.

(1) If we discover after you have a flood loss that your premium

payment was not enough to buy the requested amount of coverage, we will

send you and any mortgagee or trustee known to us a bill for the

required additional premium for the current and the prior policy terms.

If you or the mortgagee or trustee pay the additional premium within 30

days of the date of our bill, we will reform the policy to increase the

amount of coverage to the originally requested amount effective to the

beginning of the prior policy term.

(2) If we discover after you have a flood loss that the rating

information we have is incomplete and prevents us from calculating the

additional premium, we will ask you to send the required information.

You must submit the information before your claim can be paid. Once we

determine the amount of additional premium for the current and prior

policy terms, we will follow the procedure in G.2.b.(1) above.

(3) If we do not receive the additional premium by the date it is

due, your flood insurance claim will be settled based on the reduced

amount of coverage. The amount of coverage can only be increased by

endorsement subject to any appropriate waiting period.

3. However, if we find that you or your agent intentionally did not

tell us, or falsified, any important fact or circumstance or did

anything fraudulent relating to this insurance, the provisions of

Condition B. Concealment or Fraud and Policy Voidance above apply.

H. Policy Renewal.

1. This policy will expire at 12:01 a.m. on the last day of the

policy term.

2. We must receive the payment of the appropriate renewal premium

within 30 days of the expiration date.

3. If we find, however, that we did not place your renewal notice

into the U.S. Postal Service, or if we did mail it, we made a mistake,

e.g., we used an incorrect, incomplete, or illegible address, which

delayed its delivery to you before the due date for the renewal premium,

then we will follow these procedures:

a. If you or your agent notified us, not later than one year after

the date on which the payment of the renewal premium was due, of

nonreceipt of a renewal notice before the due date for the renewal

premium, and we determine that the circumstances in the preceding

paragraph apply, we will mail a second bill providing a revised due

date, which will be 30 days after the date on which the bill is mailed.

b. If we do not receive the premium requested in the second bill by

the revised due date, then we will not renew the policy. In that case,

the policy will remain as an expired policy as of the expiration date

shown on the Declarations Page.

4. In connection with the renewal of this policy, we may ask you

during the policy term to re-certify, on a Recertification Questionnaire

that we will provide you, the rating information used to rate your most

recent application for or renewal of insurance.

I. Conditions Suspending or Restricting Insurance.

We are not liable for loss that occurs while there is a hazard that

is increased by any means within your control or knowledge.

J. Requirements in Case of Loss.

In case of a flood loss to insured property, you must:

1. Give prompt written notice to us;

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;

3. Prepare an inventory of damaged personal property showing the

quantity, description, actual cash value, and amount of loss. Attach all

bills, receipts and related documents;

4. Within 60 days after the loss, send us a proof of loss, which is

your statement of the amount you are claiming under the policy signed

and sworn to by you, and which furnishes us with the following

information:

a. The date and time of loss;

b. A brief explanation of how the loss happened;

c. Your interest (for example, ``owner'') and the interest, if any,

of others in the damaged property;


[[Page 295]]


d. Details of any other insurance that may cover the loss;

e. Changes in title or occupancy of the insured property during the

term of the policy;

f. Specifications of damaged insured buildings and detailed repair

estimates;

g. Names of mortgagees or anyone else having a lien, charge, or

claim against the insured property;

h. Details about who occupied any insured building at the time of

loss and for what purpose; and

i. The inventory of damaged personal property described in J.3.

above.

5. In completing the proof of loss, you must use your own judgment

concerning the amount of loss and justify that amount.

6. You must cooperate with the adjuster or representative in the

investigation of the claim.

7. 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

complete it. However, this is a matter of courtesy only, and you must

still send us a proof of loss within sixty days after the loss even if

the adjuster does not furnish the form or help you complete it.

8. We have not authorized the adjuster to approve or disapprove

claims or to tell you whether we will approve your claim.

9. At our option, we may accept the adjuster's report of the loss

instead of your proof of loss. The adjuster's report will include

information about your loss and the damages you sustained. You must sign

the adjuster's report. At our option, we may require you to swear to the

report.

K. Our Options After a Loss.

Options that we may, in our sole discretion, exercise after loss

include the following:

1. At such reasonable times and places that we may designate, you

must:

a. Show us or our representative the damaged property;

b. Submit to examination under oath, while not in the presence of

another insured, and sign the same; and

c. Permit us to examine and make extracts and copies of:

(1) Any policies of property insurance insuring you against loss and

the deed establishing your ownership of the insured real property;

(2) Condominium association documents including the Declarations of

the condominium, its Articles of Association or Incorporation, Bylaws,

and rules and regulations; and

(3) All books of accounts, bills, invoices and other vouchers, or

certified copies pertaining to the damaged property if the originals are

lost.

2. We may request, in writing, that you furnish us with a complete

inventory of the lost, damaged, or destroyed property, including:

a. Quantities and costs;

b. Actual cash values or replacement cost (whichever is

appropriate);

c. Amounts of loss claimed;

d. Any written plans and specifications for repair of the damaged

property that you can make reasonably available to us; and

e. Evidence that prior flood damage has been repaired.

3. If we give you written notice within 30 days after we receive

your signed, sworn proof of loss, we may:

a. Repair, rebuild, or replace any part of the lost, damaged, or

destroyed property with material or property of like kind and quality or

its functional equivalent; and

b. Take all or any part of the damaged property at the value we

agree upon or its appraised value.

L. No Benefit to Bailee.

No person or organization, other than you, having custody of covered

property will benefit from this insurance.

M. Loss Payment.

1. We will adjust all losses with you. We will pay you unless some

other person or entity is named in the policy or is legally entitled to

receive payment. Loss will be payable 60 days after we receive 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:

a. We reach an agreement with you;

b. There is an entry of a final judgment; or

c. There is a filing of an appraisal award with us, as provided in

VIII. P.

2. If we reject your proof of loss in whole or in part you may:

a. Accept such denial of your claim;

b. Exercise your rights under this policy; or

c. File an amended proof of loss as long as it is filed within 60

days of the date of the loss.

N. Abandonment.

You may not abandon damaged or undamaged insured property to us.

O. Salvage.

We may permit you to keep damaged insured property 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.

P. Appraisal.

If you and we fail to agree on the actual cash value or, if

applicable, replacement cost of the damaged property so as to determine

the amount of loss, then either may demand an appraisal of the loss. In

this event, you and we will each choose a competent and impartial

appraiser within 20 days after receiving a written request from the

other. The two appraisers will choose an umpire. If they cannot agree

upon an umpire within 15 days, you or we may request that the choice be


[[Page 296]]


made by a judge of a court of record in the state where the insured

property is located. The appraisers will separately state the actual

cash value, the replacement cost, and the amount of loss to each item.

If the appraisers submit a written report of an agreement to us, the

amount agreed upon will be the amount of loss. If they fail to agree,

they will submit their differences to the umpire. A decision agreed to

by any two will set the amount of actual cash value and loss, or if it

applies, the replacement cost and loss.

Each party will:

1. Pay its own appraiser; and

2. Bear the other expenses of the appraisal and umpire equally.

Q. Mortgage Clause.

The word ``mortgagee'' includes trustee.

Any loss payable under Coverage A--Building will be paid to any

mortgagee of whom we have actual notice, as well as any other mortgagee

or loss payee determined to exist at the time of loss, and you, as

interests appear. If more than one mortgagee is named, the order of

payment will be the same as the order of precedence of the mortgages.

If we deny your claim, that denial will not apply to a valid claim

of the mortgagee, if the mortgagee:

1. Notifies us of any change in the ownership or occupancy, or

substantial change in risk, of which the mortgagee is aware;

2. Pays any premium due under this policy on demand if you have

neglected to pay the premium; and

3. Submits a signed, sworn proof of loss within 60 days after

receiving notice from us of your failure to do so.

All of the terms of this policy apply to the mortgagee.

The mortgagee has the right to receive loss payment even if the

mortgagee has started foreclosure or similar action on the building.

If we decide to cancel or not renew this policy, it will continue in

effect for the benefit of the mortgagee only for 30 days after we notify

the mortgagee of the cancellation or non-renewal.

If we pay the mortgagee for any loss and deny payment to you, we are

subrogated to all the rights of the mortgagee granted under the mortgage

on the property. Subrogation will not impair the right of the mortgagee

to recover the full amount of the mortgagee's claim.

R. Suit Against Us.

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 one year of the date of the written

denial of all or part of the 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. This requirement applies to

any claim that you may have under this policy and to any dispute that

you may have arising out of the handling of any claim under the policy.

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 that 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.

T. Continuous Lake Flooding.

1. If an insured building has been flooded by rising lake waters

continuously for 90 days or more and it appears reasonably certain that

a continuation of this flooding will result in a covered loss to the

insured building equal to or greater than the building policy limits

plus the deductible 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:

a. To make no further claim under this policy;

b. Not to seek renewal of this policy;

c. Not to apply for any flood insurance under the Act for property

at the described location; and

d. Not to seek a premium refund for current or prior terms.

If the policy term ends before the insured building has been flooded

continuously for 90 days, the provisions of this paragraph T.1. will

apply as long as the insured building suffers a covered loss before the

policy term ends.

2. If your insured building is subject to continuous lake flooding

from a closed basin lake, you may elect to file a claim under either

paragraph T.1. above or this paragraph T.2. (A ``closed basin lake'' is

a natural lake from which water leaves primarily through evaporation and

whose surface area now exceeds or has exceeded one square mile at any

time in the recorded past. Most of the nation's closed basin lakes are

in the western half of the United States where annual evaporation

exceeds annual precipitation and where lake levels and surface areas are

subject to considerable fluctuation due to wide variations in the

climate. These lakes may overtop their basins on rare occasions.) Under

this paragraph T.2, we will pay your claim as if the building is a total

loss even though it has not been continuously inundated for 90 days,

subject to the following conditions:


[[Page 297]]


a. Lake flood waters must damage or imminently threaten to damage

your building.

b. Before approval of your claim, you must:

(1) Agree to a claim payment that reflects your buying back the

salvage on a negotiated basis; and

(2) Grant the conservation easement contained in FEMA's ``Policy

Guidance for Closed Basin Lakes,'' to be recorded in the office of the

local recorder of deeds. FEMA, in consultation with the community in

which the property is located, will identify on a map an area or areas

of special consideration (ASC) in which there is a potential for flood

damage from continuous lake flooding. FEMA will give the community the

agreed-upon map showing the ASC. This easement will only apply to that

portion of the property in the ASC. It will allow certain agricultural

and recreational uses of the land. The only structures that it will

allow on any portion of the property within the ASC are certain simple

agricultural and recreational structures. If any of these allowable

structures are insurable buildings under the NFIP and are insured under

the NFIP, they will not be eligible for the benefits of this paragraph

T.2. If a U.S. Army Corps of Engineers certified flood control project

or otherwise certified flood control project later protects the

property, FEMA will, upon request, amend the ASC to remove areas

protected by those projects. The restrictions of the easement will then

no longer apply to any portion of the property removed from the ASC; and

(3) Comply with paragraphs T.1.a. through T.1.d. above.

c. Within 90 days of approval of your claim, you must move your

building to a new location outside the ASC. FEMA will give you an

additional 30 days to move if you show there is sufficient reason to

extend the time.

d. Before the final payment of your claim, you must acquire an

elevation certificate and a floodplain development permit from the local

floodplain administrator for the new location of your building.

e. Before the approval of your claim, the community having

jurisdiction over your building must:

(1) Adopt a permanent land use ordinance, or a temporary moratorium

for a period not to exceed 6 months to be followed immediately by a

permanent land use ordinance, that is consistent with the provisions

specified in the easement required in paragraph T.2.b. above;

(2) Agree to declare and report any violations of this ordinance to

FEMA so that under Sec. 1316 of the National Flood Insurance Act of

1968, as amended, flood insurance to the building can be denied; and

(3) Agree to maintain as deed-restricted, for purposes compatible

with open space or agricultural or recreational use only, any affected

property the community acquires an interest in. These deed restrictions

must be consistent with the provisions of paragraph T.2.b. above, except

that even if a certified project protects the property, the land use

restrictions continue to apply if the property was acquired under the

Hazard Mitigation Grant Program or the Flood Mitigation Assistance

Program. If a non-profit land trust organization receives the property

as a donation, that organization must maintain the property as deed-

restricted, consistent with the provisions of paragraph T.2.b. above.

f. Before the approval of your claim, the affected State must take

all action set forth in FEMA's ``Policy Guidance for Closed Basin

Lakes.''

g. You must have NFIP flood insurance coverage continuously in

effect from a date established by FEMA until you file a claim under this

paragraph T.2. If a subsequent owner buys NFIP insurance that goes into

effect within 60 days of the date of transfer of title, any gap in

coverage during that 60-day period will not be a violation of this

continuous coverage requirement. For the purpose of honoring a claim

under this paragraph T.2., we will not consider to be in effect any

increased coverage that became effective after the date established by

FEMA. The exception to this is any increased coverage in the amount

suggested by your insurer as an inflation adjustment.

h. This paragraph T.2. will be in effect for a community when the

FEMA Regional Director for the affected region provides to the

community, in writing, the following:

(1) Confirmation that the community and the State are in compliance

with the conditions in paragraphs T.2.e. and T.2.f. above, and

(2) The date by which you must have flood insurance in effect.

U. Duplicate Policies Not Allowed.

1. We will not insure your property under more than one NFIP policy.

If we find that the duplication was not knowingly created, we will

give you written notice. The notice will advise you that you may choose

one of several options under the following procedures:

a. If you choose to keep in effect the policy with the earlier

effective date, you may also choose to add the coverage limits of the

later policy to the limits of the earlier policy. The change will become

effective as of the effective date of the later policy.

b. If you choose to keep in effect the policy with the later

effective date, you may also choose to add the coverage limits of the

earlier policy to the limits of the later policy. The change will be

effective as of the effective date of the later policy.

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 will

the resulting coverage limits exceed the permissible limits of coverage

under


[[Page 298]]


the Act or your insurable interest, whichever is less. We will make a

refund to you, according to applicable NFIP rules, of the premium for

the policy not being kept in effect.

2. The insured's option under this condition U. Duplicate Policies

Not Allowed to elect which NFIP policy to keep in effect does not apply

when duplicates have been knowingly created. Losses occurring under such

circumstances will be adjusted according to the terms and conditions of

the earlier policy. The policy with the later effective date must be

canceled.

V. Loss Settlement.


1. Introduction


This policy provides three methods of settling losses: Replacement

Cost, Special Loss Settlement, and Actual Cash Value. Each method is

used for a different type of property, as explained in a.-c. below.

a. Replacement Cost Loss Settlement described in V.2. below applies

to buildings other than manufactured homes or travel trailers.

b. Special Loss Settlement described in V.3. below applies to a

residential condominium building that is a travel trailer or a

manufactured home.

c. Actual Cash Value loss settlement applies to all other property

covered under this policy, as outlined in V.4. below.


2. Replacement Cost Loss Settlement


a. We will pay to repair or replace a damaged or destroyed building,

after application of the deductible and without deduction for

depreciation, but not more than the least of the following amounts:

(1) The amount of insurance in this policy that applies to the

building;

(2) The replacement cost of that part of the building damaged, with

materials of like kind and quality, and for like occupancy and use; or

(3) The necessary amount actually spent to repair or replace the

damaged part of the building for like occupancy and use.

b. We will not be liable for any loss on a Replacement Cost Coverage

basis unless and until actual repair or replacement of the damaged

building or parts thereof, is completed.

c. If a building is rebuilt at a location other than the described

location, we will pay no more than it would have cost to repair or

rebuild at the described location, subject to all other terms of

Replacement Cost Loss Settlement.


3. Special Loss Settlement


a. The following loss settlement conditions apply to a residential

condominium building that is: (1) a manufactured home or travel trailer,

as defined in II.B.6.b. and c., and (2) at least 16 feet wide when fully

assembled and has at least 600 square feet within its perimeter walls

when fully assembled.

b. If such a building is totally destroyed or damaged to such an

extent that, in our judgment, it is not economically feasible to repair,

at least to its pre-damaged condition, we will, at our discretion, pay

the least of the following amounts:

(1) The lesser of the replacement cost of the manufactured home or

travel trailer or 1.5 times the actual cash value; or

(2) The Building Limit of liability shown on your Declarations Page.

c. If such a manufactured home or travel trailer is partially

damaged and, in our judgment, it is economically feasible to repair it

to its pre-damaged condition, we will settle the loss according to the

Replacement Cost Loss Settlement conditions in V.2. above.


4. Actual Cash Value Loss Settlement


a. The types of property noted below are subject to actual cash

value loss settlement:

(1) Personal property;

(2) Insured property abandoned after a loss and that remains as

debris at the described location;

(3) Outside antennas and aerials, awning, and other outdoor

equipment;

(4) Carpeting and pads;

(5) Appliances; and

(6) A manufactured home or mobile home or a travel trailer as

defined in II.B.6.b. or c. that does not meet the conditions for special

loss settlement in V.3. above.

b. We will pay the least of the following amounts:

(1) The applicable amount of insurance under this policy;

(2) The actual cash value (as defined in II.B.2.); or

(3) 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.


IX. Liberalization Clause


If we make a change that broadens your coverage under this edition

of our policy, but does not require any additional premium, then that

change will automatically apply to your insurance as of the date we

implement the change, provided that this implementation date falls

within 60 days before or during the policy term stated on the

Declarations Page.


X. What Law Governs


This policy and all disputes arising from the handling of any claim

under the policy are governed exclusively 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.


[[Page 299]]


In Witness Whereof, we have signed this policy below and hereby

enter into this Insurance Agreement.

Jo Ann Howard,

Administrator, Federal Insurance Administration.


[65 FR 60785, Oct. 12, 2000, as amended at 68 FR 9897, Mar. 3, 2003]


Appendix A(4) to Part 61


Federal Emergency Management Agency, Federal Insurance Administration


Standard Flood Insurance Policy Endorsement to Dwelling Form


This endorsement replaces the provisions of VII.B.4 and VII.H.2, and

also adds a new paragraph, VII.H.5. This endorsement applies in Monroe

County and the Village of Islamorada, Florida, This endorsement also

applies to communities within Monroe County, Florida that incorporate on

or after January 1, 1999, agree to participate in the inspection

procedure, and become eligible for the sale of flood insurance.

VII.B.4. This policy is also void for reasons other than fraud,

misrepresentation, or wrongful act. This policy is void from its

inception and has no legal force under the following conditions:

a. If the property is located in a community that was not

participating in the NFIP on the policy's inception date and did not

join or re-enter the program during the policy term and before the loss

occurred.

b. If you have not submitted a community inspection report, referred

to in ``H. Policy Renewal'' below, that was required in a notice sent to

you in conjunction with the community inspection procedure established

under 44 CFR 59.30.

c. If the property listed on the application is not otherwise

eligible for coverage under the NFIP

VII.H.2. We must receive the payment of the appropriate renewal

premium and when applicable, the community inspection report referred to

in H.5 below within 30 days of the expiration date.

VII.H.5. Your community has been approved by the Federal Emergency

Management Agency to participate in an inspection procedure set forth in

National Flood Insurance Program Regulations (44 CFR 59.30). During the

several years that this inspection procedure will be in place, you may

be required to obtain and submit an inspection report from your

community certifying whether or not your insured property is in

compliance with the community's floodplain management ordinance before

you can renew your policy. You will be notified in writing of this

requirement approximately 6 months before a renewal date and again at

the time your renewal bill is sent.


[65 FR 60793, Oct. 12, 2000, as amended at 67 FR 10634, Mar. 8, 2002]


Appendix A(5) to Part 61


Federal Emergency Management Agency, Federal Insurance Administration


Standard Flood Insurance Policy Endorsement to General Property Form


This endorsement replaces the provisions of VII.B.4 and VII.H.2, and

also adds a new paragraph, VII.H.5. This endorsement applies in Monroe

County and the Village of Islamorada, Florida. This endorsement also

applies to communities within Monroe County, Florida that incorporate on

or after January 1, 1999, agree to participate in the inspection

procedure, and become eligible for the sale of flood insurance.

VII.B.4. This policy is also void for reasons other than fraud,

misrepresentation, or wrongful act. This policy is void from its

inception and has no legal force under the following conditions:

a. If the property is located in a community that was not

participating in the NFIP on the policy's inception date and did not

join or re-enter the program during the policy term and before the loss

occurred.

b. If you have not submitted a community inspection report, referred

to in ``H. Policy Renewal'' below, that was required in a notice sent to

you in conjunction with the community inspection procedure established

under 44 CFR 59.30.

c. If the property listed on the application is not otherwise

eligible for coverage under the NFIP

VII.H.2. We must receive the payment of the appropriate renewal

premium and when applicable, the community inspection report referred to

in H.5 below within 30 days of the expiration date.

VII.H.5. Your community has been approved by the Federal Emergency

Management Agency to participate in an inspection procedure set forth in

National Flood Insurance Program Regulations (44 CFR 59.30). During the

several years that this inspection procedure will be in place, you may

be required to obtain and submit an inspection report from your

community certifying whether or not your insured property is in

compliance with the community's floodplain management ordinance before

you can renew your policy. You will be notified in writing of this

requirement approximately 6 months before a renewal date and again at

the time your renewal bill is sent.


[65 FR 60793, Oct. 12, 2000, as amended at 67 FR 10634, Mar. 8, 2002]


[[Page 300]]


Appendix A(6) to Part 61


Federal Emergency Management Agency, Federal Insurance Administration


Standard Flood Insurance Policy Endorsement to Residential Condominium

Building Association Policy


This endorsement replaces the provisions of VIII.B.4 and VIII.H.2,

and also adds a new paragraph, VIII.H.5. This endorsement applies in

Monroe County and the Village of Islamorada, Florida. This endorsement

also applies to communities within Monroe County, Florida and

incorporate on or after January 1, 1999, agree to participate in the

inspection procedure, and become eligible for the sale of flood

insurance.

VIII.B.4. This policy is also void for reasons other than fraud,

misrepresentation, or wrongful act. This policy is void from its

inception and has no legal force under the following conditions:

a. If the property is located in a community that was not

participating in the NFIP on the policy's inception date and did not

join or re-enter the program during the policy term and before the loss

occurred.

b. If you have not submitted a community inspection report, referred

to in ``H. Policy Renewal'' below, that was required in a notice sent to

you in conjunction with the community inspection procedure established

under 44 CFR 59.30.

c. If the property listed on the application is not otherwise

eligible for coverage under the NFIP

VIII.H.2. We must receive the payment of the appropriate renewal

premium and when applicable, the community inspection report referred to

in H.5 below within 30 days of the expiration date.

VIII.H.5. Your community has been approved by the Federal Emergency

Management Agency to participate in an inspection procedure set forth in

National Flood Insurance Program Regulations (44 CFR 59.30). During the

several years that this inspection procedure will be in place, you may

be required to obtain and submit an inspection report from your

community certifying whether or not your insured property is in

compliance with the community's floodplain management ordinance before

you can renew your policy. You will be notified in writing of this

requirement approximately 6 months before a renewal date and again at

the time your renewal bill is sent.


[65 FR 60794, Oct. 12, 2000, as amended at 67 FR 10634, Mar. 8, 2002]






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File Title[Code of Federal Regulations]
AuthorFEMA Employee
Last Modified ByFEMA Employee
File Modified2008-12-16
File Created2008-12-16

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