[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;
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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.
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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.
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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
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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.
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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.
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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
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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
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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.
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In either case, you must pay the pro rata premium for the increased
coverage limits within 30 days of the written notice. In no event 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.
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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.).
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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.
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(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:
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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).
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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
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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;
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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
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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]
| File Type | application/msword |
| File Title | [Code of Federal Regulations] |
| Author | FEMA Employee |
| Last Modified By | FEMA Employee |
| File Modified | 2008-12-16 |
| File Created | 2008-12-16 |