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Answers to Questions about the NFIP

Coverage

  1. How much flood insurance coverage is available?
  2. Are there limitations on the amount of insurance available for certain types of property?
  3. What flood losses are covered?
  4. What coverage is available in basements and enclosed areas beneath the lowest elevated floor of a building?
  5. What is a basement?
  6. Are losses from land subsidence, sewer backup, or seepage of water covered?
  7. Does the NFIP apply a deductible to losses?
  8. Are costs of preventive measures covered under the SFIP?
  9. Does insurance under the NFIP provide coverage at replacement cost?
  10. Does the flood insurance dwelling policy provide additional living expenses, if the insured dwelling is flood damaged and cannot be occupied while repairs are being made?
  11. What is Increased Cost of Compliance coverage?
  12. Is there a limit to the amount a policyholder can collect under ICC coverage?
  13. Is ICC coverage included in all Standard Flood Insurance Policies?

  1. How much flood insurance coverage is available?
    The following coverage limits are available under the Dwelling Form and the General Property Form of the Standard Flood Insurance Policy. Coverage limits under the Residential Condominium Building Association Policy are listed in the NFIP Flood Insurance Manual.
      Emergency Program Regular Program
    Building Coverage    
    Single-family dwelling* $ 35,000* $250,000
    Other residential* $35,000* $250,000
    Other residential $100,000* $250,000
    Non-residential $100,000* $500,000
    Contents Coverage
    Residential $ 10,000 $100,000
    Non-residential including Small Business $100,000 $500,000
    * Under the Emergency Program, higher limits of building coverage are available in Alaska, Hawaii, the U.S. Virgin Islands, and Guam.

  2. Are there limitations on the amount of insurance available for certain types of property?
    General coverage limitations are explained in the answers to     Questions 28 and 29. In addition, items such as artwork, photographs, collectibles, memorabilia, rare books, autographed items, jewelry, watches, gems, articles of gold, silver, or platinum and furs are limited to $2,500 coverage in the aggregate. This limitation does not apply to other items that are personal property or household contents usual or incidental to the occupancy of the building as a residence. For other limitations under the Standard Flood Insurance Policy, see the current policy or contact a property insurance agent or broker.

  3. What flood losses are covered?
    The Standard Flood Insurance Policy (SFIP) Forms contain complete definitions of the coverages they provide. Direct physical losses by "flood" are covered. Also covered are losses resulting from flood-related erosion caused by waves or currents of water activity exceeding anticipated cyclical levels, or caused by a severe storm, flash flood, abnormal tidal surge, or the like, which result in flooding, as defined. Damage caused by mudflows, as specifically defined in the policy forms, is covered.

  4. What coverage is available in basements and in enclosed areas beneath the lowest elevated floor of a elevated building?
    Coverage is provided for foundation elements, including posts, pilings, piers, or other support systems for elevated buildings. Coverage also is available for basement and enclosure utility connections, certain mechanical equipment necessary for the habitability of the building, such as furnaces, hot water heaters, clothes washers and dryers, food freezers, air conditioners, heat pumps, electrical junctions, and circuit breaker boxes. Finished structural elements such as paneling and linoleum, and contents items such as rugs and furniture are not covered. The SFIP has a complete list of covered elements and equipment.

  5. What is a basement?
    The NFIP's definition of "basement" includes any part of a building where all sides of the floor are located below ground level. Even though a room may have windows and constitute living quarters, it is still considered to be a basement if the floor is below ground level on all sides.

  6. Are losses from land subsidence, sewer backup, or seepage of water covered?
    We will pay for losses from land subsidence under certain circumstances. Subsidence of land along a lake shore or similar body of water which results from the erosion or undermining of the shoreline caused by waves or currents of water exceeding cyclical levels that result in a flood is covered. All other land subsidence is excluded.

    We do not insure for direct physical loss caused directly or indirectly by any of the following:

    • Back ups through swers or drains; or
    • Discharges or overflows from a sump, sump pump, or related equipment;
    • Seepage or leaks on or through the covered property;

    unless there is a general condition of flooding in the area and the flood is the proximate cause of the sewer or drain backup, sump pump dis-charge or overflow, or seepage of water.

  7. Does the NFIP apply a deductible to losses?
    A minimum deductible is applied separately to a building and its contents, although both may be damaged in the same flood. Higher deductibles are available, and an insurance agent can provide information on specific amounts of available deductibles. Optional high deductibles reduce policy premiums but will have to be approved by the mortgage lender.

  8. Are costs of preventive measures covered under the SFIP?
    Some are. When an insured building is in imminent danger of being flooded, the reasonable expenses incurred by the insured for removal of insured contents to a safe location and return will be reimbursed up to $1,000, and the purchase of sandbags and sand to fill them, plastic sheeting and lumber used in connection with them, pumps, fill for temporary levees, and wood will be reimbursed up to $1,000. No deductible is applied to this coverage.

  9. Does insurance under the NFIP provide coverage at replacement cost?
    Only for single-family dwellings and residential condominium buildings, if several criteria are met. Replacement cost coverage is available for a single-family dwelling, including a residential condominium unit that is the policyholder's principal residence and is insured for at least 80 percent of the unit's replacement cost at the time of the loss, up to the maximum amount of insurance available at the inception of the policy term. Replacement cost coverage does not apply to manufactured (i.e., mobile) homes smaller than certain dimensions specified in the policy. Losses are adjusted on a replacement cost basis for residential condominium buildings insured under the Residential Condominium Building Association Policy (RCBAP). The principal residence and the 80 percent insurance to value requirements for single-family dwellings do not apply to the RCBAP. However, coverage amounts less than 80 percent of the building's full replacement cost value at the time of loss will be subject to a co-insurance penalty.

    Contents losses are always adjusted on an actual cash value basis. If the replacement cost conditions are not met, the building loss is also adjusted on an actual cash value basis. Actual cash value means the replacement cost of an insured item of property at the time of loss, less the value of physical depreciation as to the item damaged.

  10. Does the flood insurance dwelling policy provide additional living expenses, if the insured dwelling is flood damaged and cannot be occupied while repairs are being made?
    No. The policy only covers direct physical flood damage to the dwelling and does not provide additional living expenses.

  11. What is Increased Cost of Compliance coverage?
    Increased Cost of Compliance (ICC) coverage under the Standard Flood Insurance Policy (SFIP) provides for the payment of a claim to help pay for the cost to comply with State or community floodplain management laws or ordinances from a flood event in which a building has been declared substantially damaged or repetitively damaged. When an insured building is damaged by a flood and the State or community declares the building to be substantially damaged or repetitively damaged, ICC coverage will help pay for the cost to elevate, floodproof, demolish, or relocate the building up to a maximum benefit of $30,000. This coverage is in addition to the building coverage for the repair of actual physical damages from flood under the SFIP.

  12. Is there a limit to the amount a policyholder can collect under ICC coverage?
    Yes. The maximum amount a policyholder may collect under ICC is $30,000. This amount is in addition to the amount the policyholder receives for physical damages by flood. The total amount the policyholder receives for combined physical structural damage from flood and ICC is always capped by the maximum limit of coverage established by Congress. The maximum amount collectible for both ICC and physical damage from flood for a single-family dwelling is $250,000.

  13. Is ICC coverage included in all Standard Flood Insurance Policies?
    No. Insureds under the Group Flood Insurance Policy and insureds with condominium unit owner's coverage are ineligible for ICC coverage. Policies issued or renewed in Emergency Program communities are not eligible for ICC coverage. All other policies include the coverage.

F-084 (5/06)

Last Modified: Thursday, 04-Jun-2009 12:05:28 EDT