Policy Endorsement #3

Closed Basin Lakes

This endorsement changes the policy. Please read carefully.

Federal Emergency Management Agency
Mitigation Division
National Flood Insurance Program

Standard Flood Insurance Policy
Endorsement Number Three

This Endorsement Supplements Article 9.T of the Dwelling Policy, Article 8.V of the General Property Policy, and Article 10.V of the Residential Condominium Building Association Policy.

Under 44 CFR 61.13 (d), we are establishing this endorsement for closed basin lakes, which supplements Article 9.T of the Dwelling Policy, Article 8.V of the General Property Policy, and Article 10.V of the Residential Condominium Building Association Policy. (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.) If your insured building is subject to continuous lake flooding from a closed basin lake, 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:

  1. Lake flood waters must damage or imminently threaten to damage your building.
  2. Prior to 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 the Federal Emergency Management Agency's (FEMA) "Policy Guidance for Closed Basin Lakes," to be recorded on the deed of the property. 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 National Flood Insurance Program (NFIP) and are insured under the NFIP, they will not be eligible for the benefits of this endorsement. If a U.S. Army Corps of Engineers (USACE) 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.
  1. 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 there is sufficient reason to extend the time.
  2. Prior to the final payment of your claim, you must acquire an elevation certificate and a floodplain management permit from the local floodplain administrator for the new location of your building.
  3. Prior to 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 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, it can deny flood insurance to the building; 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 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 2.b. above.
  1. Prior to the approval of your claim, the affected State must take all action set forth in FEMA's "Policy Guidance for Closed Basin Lakes."
  2. You must have NFIP flood insurance coverage continuously in effect from a date established by FEMA until you file a claim under this endorsement. 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.
  3. This endorsement will be in effect for a community when the FEMA Regional Director for the affected region gives the community, in writing, the following:
  1. Confirmation that the community and the State are in compliance with the conditions in numbers 5 and 6 above, and,
  2. The date by which you must have flood insurance in effect.

Jo Ann Howard
Administrator
Mitigation Division

Last Modified: Thursday, 25-May-2006 14:38:34 EDT