Policy Issuance - November 19, 1999
Subject: Endorsement for Closed Basin Lakes of the SFIP: Criteria for claim payment for buildings with basements
Background: On August 2, 1999, we published in the Federal Register an interim final rule that adds an endorsement for closed basin lakes to the three policy forms of the Standard Flood Insurance Policy (SFIP). The endorsement says that we pay for claims to buildings in an Area of Special Consideration that are subject to continuous lake flooding from a designated closed basin lake if "lake flood waters...damage or imminently threaten to damage your building..." The question has arisen whether water in a basement can constitute an imminent threat under the endorsement.
Policy Decision: This policy clarifies adjustment criteria for situations where water in a basement from closed basin lake flooding for an extended time poses a threat to the entire structure, and it is more cost-effective to initiate claim payment--less the salvage value of the building--so that the property owner may relocate the building.
We consider a building with a basement to be "imminently" threatened by damage from closed basin lake flooding when:
- the building is in such close proximity to the closed basin lake that it is probable that lake flooding is the cause of the basement flooding;
- the lake level is higher than the basement floor level; and
- either: (1) the owner is currently taking reasonable preventative measures to manage the flow of lake water into the building and has done so for at least the last 30 days or (2) lake water has been in the basement for the last 30 days.
The adjuster may base the evidence of both reasonable preventative measures and lake water flooding for the specified period any documented source.
Jo Ann Howard
Administrator
Mitigation Division
Last Modified: Tuesday, 23-May-2006 11:18:30 EDT