FEDERAL EMERGENCY MANAGEMENT AGENCY FIA-2/March 1992
Answers to Questions About The National Flood Insurance Project
This pamphlet is intended to acquaint the public with the National Flood Insurance Program (NFIP). Despite the highly technical nature of the Program, there has been a deliberate effort to minimize the use of technical terms, This publication is designed for readers who do not need a detailed history or refined technical or legal explanations, but do need a basic understanding of the program and the answers to some frequently asked questions. Readers who need legal definitions should refer to the Standard Flood Insurance Policy and to Federal regulations.
The information provided is as current as possible, but changes in the NFIP are made periodically. Readers can obtain the most up-to-date insurance information by using the telephone and address directory at the back of the pamphlet. Use of acronyms and initials has been limited, but some terms are used so often that acronyms and initials are practical and of assistance to the reader. The term will be spelled out at its first use in the text with the acronym or initials following in parentheses. For readers' convenience, following is a listing of acronyms and initials that appear in Answers to Questions About the National Flood Insurance Program: FEMA - Federal Emergency Management Agency FHBM - Flood Hazard Boundary Map FIA - Federal Insurance Administration FIRM - Flood Insurance Rate Map LOMA - Letter of Map Amendment LOMR - Letter of Map Revision NFIP - National Flood Insurance Program SFHA - Special Flood Hazard Area SFIP - Standard Flood Insurance Policy WYO - Write Your Own
Question/Number Introduction to the NFIP 1 "NFIP" Defined 2-3 "NFIP" History 4 "Flood" Defined 5 The Role of State Insurance Regulators 6 "Write Your Own" Defined 7 Benefits of NFIP 8 "Community" Defined 9 Community Participation 10 Voluntary Participation 11 "Emergency Program" Defined 12 "Regular Program" Defined 13-16 Probation 17 Suspension 18 Ramifications of Non-participation Flood Insurance Information for Prospective Buyers 19 Who May Purchase Flood Insurance 20 Determining Eligibility to Buy 21 Determining Whether a property Is in a Flood Area 22 Insurable Buildings 23 Uninsurable Properties 24 Coverage Restrictions for Insurable Buildings 25 How to Buy Flood Insurance 26 How Premiums Are Calculated 27 Mandatory Purchase Requirements 28 Need for Coverage in Communities with No Flood History 29 Number of Buildings Per Policy 30 Policy Term (number of years) 31 Minimum Policy Premium 32 Waiting Period 33 "Presentment of Payment" Defined 34 "WYO" Waiting Periods and Presentment of Payment 35 Rating Buildings in Coastal Areas 36 Cancellation of Policies 37 "Grace Periods" Coverage 38 Amounts of Coverage Available 39 Limitations on Certain Types of Items 40 Flood Losses Covered 41 Coverage in Basements and Enclosed Areas 42 "Basement" Defined 43 Water Seepage and Sewer Backup Damage 44 Deductibles 45 Costs of Preventive Measures 46 Replacement Cost Coverage 47 How does a policyholder file a claim for flood loss? Filing a Flood Insurance Claim 48 "Proof of Loss" Defined 49 "Loss in Progress" Defined 50 Lack of Coverage for a Loss in Progress 51 Maximum Amount Collectable The Community's Role in Floodplain Management 52 Role of the Community 53 Difference Between FHBM and FIRM 54 State Government Participation 55 Federal Requirements Versus States 56 "Floodplain Management Measures" Defined 57 Effect of Floodplain Management on Existing Structures 58 "Substantial Improvement" Defined 59 Construction Outside Special Flood Hazard Areas 60 Modifying the Basic Requirements Mapping 61 Community Input to Flood Hazard Assessment 62 Determining Flood Hazard Areas 63 "Flood Hazard Zones" Defined 64 "Floodway" Defined 65 Changing a FIRM 66 "Letter of Map Amendment" Defined 67 "Technical or Scientific Data" Defined 68 "Letter of Map Revision" Defined 69 "Conditional Map Revision" Defined 70 "Physical Map Revision" Defined 71 Contact to Initiate a LOMA, LOMR, or Physical Map Revision 72 Time Frames for Map Changes 73 Terminating Flood Insurance After a Map Change 74 Burden of Proof on Requestor 75 How to Obtain Technical Data Shown on Maps Flood Insurance Address and Telephone Directory NFIP FEMA Regional Offices State Coordinating Agencies for Flood Insurance Additional Reading Listing of Available Publications Introduction to the NFIP
1. What is the National Flood Insurance Program (NFIP)?
The NFIP is a federal program enabling property owners to purchase insurance protection against losses from flooding. This insurance is designed to provide an insurance alternative to disaster assistance to meet the escalating costs of repairing damage to buildings and their contents caused by floods. Until recently, such coverage was generally unavailable from private-sector insurance companies.
Participation in the NFIP is based on an agreement between local communities and the federal government which states that if a community will implement and enforce measures to reduce future flood risks to new construction in special flood hazard areas, the federal government will make flood insurance available within the community as a financial protection against flood losses which do occur.
2. Why was the NFIP established by Congress?
For decades, the national response to flood disasters was generally limited to constructing flood control works such as dams, levees, sea walls, and the like and providing disaster relief to flood victims. This approach did not reduce losses or discourage unwise development and, in some instances, may have actually encouraged additional development. To compound the problem, the public could not buy flood coverage from insurance companies, and building techniques to reduce flood damage were often overlooked.
In the face of mounting flood losses and escalating costs to the general taxpayers of disaster relief, Congress created the NFIP. The intent was to mitigate future damage and provide protection for property owners against potential losses through an insurance mechanism that allows a premium to be paid for the protection by those most in need of this protection.
3. How was the NFIP established and who administers it?
Congress established the NFIP with the passage of the National Flood Insurance Act of 1968. The NFIP was broadened and modified with the passage of the Flood Disaster Protection Act of 1973 and other legislative measures. The NFIP is administered by the Federal Insurance Administration (FIA), a component of the Federal Emergency Management Agency (FEMA), an independent agency.
4. What is a flood?
"Flood" is defined in the Standard Flood Insurance Policy (SFIP), in part, as:
A general and temporary condition of partial or complete inundation of normally dry land areas from overflow of inland or tidal waters or from the unusual and rapid accumulation or runoff of surface waters from any source.
5. Do the state insurance regulators have any jurisdiction over the NFIP in their respective slates?
As established by Congress, the NFIP is subject to the rules and regulations of the Federal Insurance Administration. FIA has elected to have state-licensed insurance companies' agents and brokers sell flood insurance to consumers. State regulators hold the insurance companies' agents and brokers accountable for providing NFIP customers with the same standards and level of service that the states require of them in selling their other lines of insurance.
Private insurance companies participating in the Write Your Own (WYO) program must be licensed and regulated by states to engage in the business of property insurance in those states in which they wish to sell flood insurance.
6. What is the NFIP's "Write Your Own" (WYO) program?
In 1981, a strong effort was begun by the Federal Insurance Administrator to reinvolve the private-sector insurance companies in the NFIP. Representatives of major insurance companies and insurance trade associations met with FIA officials to determine the best way to achieve this reinvolvement, and the company representatives outlined conditions under which the voluntary sector would become involved in the WYO program. FIA obtained the necessary clearances from other federal agencies to meet these conditions.
Over the next several months, FIA, working with insurance company executives, addressed and resolved the financial control issues that prevented the development of a WYO program in the past. The goals of the WYO program are:
* Increase the NFIP policy base and the geographic distribution of policies
* Improve service to NFIP policyholders through the infusion of insurance industry knowledge
* Provide the insurance industry with direct operating experience with flood insurance.
In August 1983, the Administrator extended an invitation to all licensed property and casualty insurance companies to participate in the WYO, and as of October 1988, over 200 insurance companies had signed arrangements with FIA to sell and service flood insurance under their own names.
7. How does the NFIP benefit properly owners? Taxpayers? Communities?
Through the NFIP, property owners in participating communities are able to insure against flood losses. By employing wise floodplain management, a participating community can protect its citizens against much of the devastating financial loss resulting from future flood disasters. More careful local management of development in the floodplains results in construction practices that can reduce flood loss and the high costs associated with flood disasters to all levels of government.
8. What is the definition of a community?
A "community," as defined for NFIP's purposes, is any state, area, or political subdivision; any Indian tribe, authorized tribal organization, or Alaska native village, or authorized native organization which has the authority to adopt and enforce floodplain management ordinances for the area under its jurisdiction. In most cases, a community is an incorporated city, town, township, borough, or village or an unincorporated area of a county or parish. However, some states have statutory authorizes which vary from this description.
9. Why is participation in the NFIP on a community basis rather than on an individual basis?
The National Flood Insurance Act allows FIA to make flood insurance available only in those areas where the appropriate public body has adopted adequate floodplain management regulators for its flood-prone areas. Individual citizens cannot regulate building or establish construction priorities for communities. Without community oversight of building activities in the floodplain, the best efforts of some to reduce future flood losses could be undermined or nullified by the careless building of others. Unless the community as a whole is practicing adequate flood hazard mitigation, the potential for loss cannot be reduced sufficiently to affect disaster relief costs. Insurance rates also would reflect the probable higher losses that would result without local floodplain management enforcement activities.
10. Is community participation mandatory?
No. Community participation in the NFIP is voluntary (although some states require NFIP participation as part of their state floodplain management program). Each identified flood-prone community must assess its floodhazard and determine whether flood insurance and floodplain management would benefit the community's residents and economy. However, a community that chooses not to participate within one year after the flood hazard has been identified and a flood risk map has been provided is subject to the ramifications explained in the answer to Question #18.
Because a community's participation status can significantly affect current and future owners of property located in Special Flood Hazard Areas (SFHA)and the availability of federal financial assistance in the flood-prone areas of the community, the decision should be made with a full awareness of the consequence of each action.
11. What is the emergency program?
The emergency program is the initial phase of a community's participation in the NFIP and is designed to provide a limited amount of insurance at federally subsidized rates prior to the effective date of the community's initial Flood Insurance Rate Map (FIRM). A community participating in the emergency program is usually provided with a Flood Hazard Boundary Map (FHBM) and is required to adopt limited measures aimed at controlling future use of its floodplains. Relatively few of the 18,000 communities participating in the NFIP remain in the emergency program, and all of them will be converted to the regular program by the end of FY 1991. (For additional information on mapping, see Question #61.)
12. What is the regular program?
The regular program is the phase of a community's participation in the NFIP under which more comprehensive floodplain management requirements are imposed and higher amounts of insurance are available based on risk zones and elevations determined in the flood insurance study of the community. A FIRM is used in this phase of NFIP participation.
13. What is probation?
Probation is the formal notification by FEMA to a community that its floodplain management compliance program does not meet NFIP criteria. It is an action authorized under federal regulations.
14. When can a community be placed on probation?
A community can be placed on probation 90 days after FEMA provides written notice to community officials of specific deficiencies. Probation generally is imposed only after FEMA has consulted with the community and has not been able to resolve deficiencies. The FEMA Regional Director has the authority to place communities on probation.
15. How long will probation last?
Probation may be continued for up to one year after the community corrects all program deficiencies and remedies all violations to the maximum extent possible.
16. What penalties are imposed when a community is placed on probation?
An additional $25 charge is added to the premium for each flood insurance policy sold or renewed in the community. The additional charge is effective for at least one year after the community's probation period begins. The surcharge is intended to focus the attention of policyholders on the community's non-compliance to help avoid suspension of the community which has serious adverse impacts on those policyholders. Probation does not affect the availability of flood insurance.
17. What is suspension?
Suspension of a participating community (usually after a period of probation) occurs when the community fails to solve its compliance problems. The community is provided written notice of the impending suspension and granted 30 days in which to show cause why it should not be suspended. Suspension is imposed by the Federal Insurance Administrator. If suspended, the community becomes non-participating and flood insurance policies cannot be written or renewed. Policies in force at the time of suspension continue in force for the policy term. Three-year policies, which are written only by Write Your Own (WYO) companies, remain in force until the next annual anniversary date of the policy.
18. What happens if a community does not participate in the NFIP?
Flood insurance under the NFIP or WYO program is not available within that community. (See Question #27 on mandatory purchase requirements.) If a Presidentially declared disaster due to flooding occurs in a non-participating community, no federal financial assistance can be provided for the permanent repair or reconstruction of insurable buildings in Special Flood Hazard Areas (SFHAs). Eligible applicants may receive those forms of disaster assistance that are not related to permanent repair and reconstruction of buildings.
Flood Insurance Information for Prospective Buyers
19. Who may purchase a flood insurance policy?
NFIP coverage is available to all owners and occupants of insurable property (a building and/or its contents) in a community participating in the NFIP. Owners and renters may insure their personal property against flood loss. Builders of buildings in the course of construction, condominium associations, and owners of residential condominium units in participating communities all may purchase flood insurance.
Condominium associations may purchase a condominium master policy that covers both the common elements of the building and the individual units owned by the members of the association. Residential condominium unit owners may purchase building and contents (personal property) flood insurance to supplement any insurance purchased by the condominium owners' association. Owners of non-residential condominium units may purchase only contents coverage in their own name. The non-residential condominium building must be insured in the name of the association.
20. How can I find out if I am eligible to purchase flood insurance?
NFIP coverage is available only in participating communities. Almost all of the nation's communities with serious flooding potential have joined the NFIP. To learn if a community is participating in the NFIP, contact a property insurance agent or broker or community officials.
21. How can a property owner determine if the property is in a Special Flood Hazard Area (SFHA)?
FEMA publishes maps indicating communities' flood hazard areas and the degree of risk in those areas. Flood insurance maps usually are on file in a local repository in the community such as the town hall or county building. A property owner may consult these maps to determine if the property is in a SFHA. A toll-free telephone number and mailing address for the Flood Map Distribution Center are listed in the Flood Insurance Address and Telephone Directory at the back of this publication (Page 33), and may be used to order maps. Delivery is usually within two to four weeks. There is a charge for maps for some users, so it is advisable to call for detailed information.
22. What types of property may be insured against flood loss?
Almost every type of walled and roofed building that is principally above ground and not entirely over water may be insured if it is in a participating community. In most cases, this includes manufactured (i.e., mobile) homes that are anchored to permanent foundations, but does not include travel trailers or converted buses or vans. Contents within insurable walled and roofed buildings also may be insured under separate coverage.
23. What kinds of property are not insurable under the NFIP?
Buildings over water or principally below ground, gas and liquid storage tanks, animals, birds, fish, aircraft, wharves, piers, bulkheads, growing crops, shrubbery, land, livestock, roads, machinery or equipment in the open, and motor vehicles are not insurable. Most contents and finishing materials located in a basement or in enclosures below the lowest elevated floor of an elevated Post-FIRM building are not covered. (See Question #41 for coverage limitations in basements and below lowest elevated floors.) Information on the insurability of any special property may be obtained by contacting a property insurance agent or a Write Your Own company agent.
24. Are there certain buildings that cannot be covered?
Flood insurance is not available for buildings which the Federal Insurance Administrator determines have been declared by a state or local zoning or other authorized authority to be in violation of state or local floodplain management regulations or ordinances. No new policies can be written to cover such buildings, nor can an existing policy be renewed.
Buildings constructed or substantially improved since October 1, 1983, and located in designated undeveloped coastal barrier portions or communities are not eligible for flood insurance. These areas are located in over 100 communities on the Atlantic and Gulf coasts and are delineated on the communities' flood maps.
25. How is flood insurance purchased?
After a community joins the NFIP, a policy may be purchased from any licensed property insurance agent or broker who is in good standing in the state in which the agent is licensed or through any agent representing a Write Your Own company (WYO) (see Question #6), including an employee of the company authorized to issue the coverage. The steps leading to the purchase of a flood insurance policy are:
* A property owner perceives a risk of flooding to an insurable building and elects to purchase flood insurance or a lender making a mortgage informs the builder or potential buyer that the building is in a Special Flood Hazard Area (SFHA) and that flood insurance must be purchased as required by the Flood Disaster Protection Act of 1973. The builder or borrower contacts an insurance agent or broker or Write Your Own (WYO) company.
* The insurance agent completes the necessary forms for the builder or buyer. In the case of a building constructed in a SFHA after the issuance of a Flood Insurance Rate Map (FIRM) (see Question #53), the builder or buyer must obtain an elevation certificate completed by a licensed engineer, architect, surveyor, or appropriate community official.
* The insurance agent submits the application, necessary elevation certification, and full premium to the NFIP or to a participating WYO company.
* The property owner may choose to purchase a flood insurance policy through a company that sells property insurance (e.g., homeowners) if that company is participating in the WYO program. In this case, the company's agent goes through the same process as an agent in obtaining coverage directly with the NFIP, except the property owner must submit the full premium to the company, not the NFIP. The policy is then serviced by the company under its customary business practices.
26. How are flood insurance premiums calculated?
A number of factors determine the premium rates for flood insurance coverage. They include the amount of coverage purchased, location, age of the building, building occupancy, the design of the building, and, for buildings in SFHAs, the elevation. The only buildings in Zones B, C, and X which are eligible for preferred risk coverage at a pre-determined, reduced premium rate are single-family and 1-4 family dwellings. For these exceptions, there are certain loss limitations depending on the amount of insurance purchased.
27. Is the purchase of flood insurance mandatory?
The Flood Disaster Protection Act of 1973 as amended mandates the purchase of flood insurance as a condition of receipt of federal or federally related financial assistance for acquisition and/or construction of buildings in SFHAs of any community. The purchase of flood insurance on a voluntary basis is frequently prudent even outside of SFHAs.
The Act prohibits federal agencies, such as FHA, VA and SBA, from making or guaranteeing a loan secured by a building in a SFHA unless flood insurance has been purchased. The prohibition applies in all communities which FEMA has identified as having SFHAs, including those communities that are not participating in the NFIP. Flood insurance cannot be purchased for buildings in non-participating communities.
The prohibition of the Act applies to federal regulatory instrumentalities, such as Office of Comptroller of the Currency, Federal Deposit Insurance Corporation, Federal Savings and Loan Institution, and Federal Home Loan Bank Board Lending institutions regulated, or whose deposits are insured, by a Federal instrumentality, must require the purchase of flood insurance according to the regulations of the federal instrumentality.
The purchase of flood insurance does not apply for conventional loans from federally regulated lenders when the community in which the building is located is not participating in the NFIP. In these cases, the lending institution is required to notify the borrower that, in the event of a flood-related Presidentially declared disaster, Federal disaster assistance will not be available for the permanent repair or restoration of the building. Federally regulated or insured lending institutions are required in all cases to notify the borrower when the building being used to secure a loan is in a SFHA.
The amount of flood insurance required by a lending institution cannot exceed the amount of coverage which the Congress has made available and should not exceed the insurable value of the building, whichever is less. A lending institution is not required by statute to make the borrower purchase flood insurance for more than the amount of the loan or for more than twice the amount of insurance available under the Emergency Program ($35,000 times 2 = $70,000), whichever is less. A lending institution may, however, as part of its lending policy, require the borrower to purchase flood insurance in a greater amount than required by statute, and for buildings outside SFHAs.
28. Why is there a requirement to purchase flood insurance in communities which have not suffered flooding in many years or ever?
A major purpose of the NFIP is to alert communities to the danger of flooding and to assist them in reducing potential property losses before a flood occurs, not when it is too late. Therefore, FEMA determines flood risk through the use of all available information for each community. Historical flood data are only one element used in determining flood risk. More critical conclusions can be made by evaluating the community's rainfall and river-flow data, topography, wind velocity, tidal surge, flood control measures, development (existing and planned), community maps, and other data.
29. How many buildings or locations (and their contents) may be insured on each policy?
Normally, only one building and its contents can be insured on each policy. The Dwelling Form of the Standard Flood Insurance Policy does provide coverage for up to 10 percent of policy amount for appurtenant garages and carports, but not for tool and storage sheds and the like. In addition, up to buildings and/or their contents may be insured on one policy on a scheduled building basis, if the application to schedule buildings under one policy is presented on a form or in a format approved by the Federal Insurance Administrator.
30. What is the flood insurance policy term?
Flood insurance coverage written directly with the NFIP is available only on a one-year, prepaid basis. Write Your Own companies may offer three-year policies at their discretion.
31. Is them a minimum premium for a flood insurance policy?
There is a minimum premium for all flood insurance policies. Property insurance agents who write flood insurance coverage should know the current minimum premium.
32. Is there a waiting period for flood insurance to become effective?
There is normally a five-day waiting period. During the 30-day period following a community's initial entry into the emergency program or following the community's conversion to the regular program, the effective date and time of any new or added amount of flood insurance coverage is 12:01 a.m. of the day following the application date and the presentment of payment of premium. When title to a property is conveyed, any new or added flood insurance coverage on the property is effective when the title is transferred.
33. What is "presentment of payment?"
"Presentment of payment" is the receipt of premium and is considered to be the time that payment is actually received by the NFIP. Delivery to an insurance agent or broker or mailing a premium by ordinary mail with placement of a postmark does not constitute presentment to the NFIP.
A premium mailed in a timely manner by certified mail and received by the NFIP is considered to have been delivered to and received by the NFIP as of the date of the certification by the post office. If time is shod and coverage is needed, the certified mail transmittal of payment should be considered.
34. Is there any difference in the wailing period and presentment of payment for policies written with a Write Your Own (WYO) company?
The waiting period for policies written with WYO companies is the same as detailed in Question #32. The presentment of payment is determined from the time the agent or authorized employee of the WYO company received the application and premium, or from the time the application and premium are received in a central office or processing facility. Property owners should check with individual WYO company agents for details about specific companies.
35. Is there a special rating procedure applicable to V zones (coastal high hazard areas)?
In calculating the applicable rates for buildings which were constructed or substantially improved in V zones after October 1, 1981, the actuarial formula takes into account the ability of the building to withstand the impact of wave action. The agent must follow the special instructions in the Flood Insurance Manual in preparing an application for coverage for buildings located in any V zone. (See Question #63 for a further explanation of V zones.)
36. Can flood insurance be cancelled at the request of the insured with a refund of premium?
Yes, but only in certain circumstances, since all of the premium is fully earned on the first day of the policy term. Premium will be refunded on a pro-rata basis when the policyholder no longer owns or has an insurable interest in the insured property, provided that no claim has been paid or is pending. There are other limited cancellation provisions for the refunding of premium. Policyholders wishing to cancel a policy should contact the insurance agent who wrote the policy to discuss cancellation criteria. Additional information on cancellations may be obtained by calling the appropriate toll-free number shown in the "Flood Insurance Address and Telephone Directory" section.
37. Is there a "grace period" for an insured under the NFIP policy conditions?
All policies expire at 12:01 a.m. on the last day of the effective term. (For the ease and convenience of insurance agents and brokers, lenders, and policyholders, NFIP rules allow for "renewal" of expiring policies and no new application is required.) Coverage remains in force for 30 days after the expiration of the policy, and claims for losses that occur in that period will be honored providing that full renewal premium is received by the end of the 30-day period. A coverage "grace period" also remains in force for 30 days after written notice to the mortgagee of the expiration of a policy for any mortgagee named in the policy.
Coverage
38. How much flood insurance coverage is available? Emergency Program Regular Program Building Coverage Single-family dwelling *$ 35,000 $185,000 Other residential* 100,000 250,000 Non-residential 100,000 200,000 Small business 100,000 250,000 Contents Coverage (per unit) Residential $ 10,000 $ 60,000 Non-residential 100,000 200,000 Small Business 100,000 300,000 * Higher limits of basic coverage are available under the emergency program in Hawaii, Alaska, U.S. Virgin Islands, and Guam.
39. Are there limitations on the amount of insurance available for certain types of properly?
General coverage limitations are explained in the answer to Question #38 above. In addition, items such as paintings, etchings, pictures, tapestries, other works of art, jewelry, articles of gold, silver or platinum, and furs are limited to $250 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.
40. What flood losses are covered?
The Standard Flood Insurance Policy (SFIP) contains a complete definition of the coverage it provides. 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 and accompanied by a severe storm, flash flood, abnormal tidal surge, or the like, which result in flooding, as defined. Damages caused by mudslides (i.e., mudflows), as specifically defined in the policy, are covered.
In certain cases, NFIP will pay claims on insured buildings that are subject to imminent collapse or subsidence as a result of erosion so the building can be demolished or relocated before the damage occurs. Specific requirements must be met for such claims to be paid, and the amounts of payment are defined by statute.
41. What coverage is available in basements and enclosed areas beneath the lowest elevated floor?
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, 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.
42. 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.
43. Are losses from water seepage, sewer backup, or hydrostatic pressure covered?
These losses are covered only when they occur in conjunction with a general condition of flooding in which the insured property has been, at the same time, physically damaged by surface floodwaters.
44. 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 detail the range of specific amounts of available deductibles. Optional higher deductibles reduce policy premiums but will have to be approved by the any lienholder.
45. 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 and the purchase of sandbags, sand to fill them, plastic sheeting and lumber used in connection with them, the cost of pumps, fill for temporary levees, and wood will be reimbursed up to the amount of the minimum standard deductible ($500). No deductible is applied to this coverage.
46. Does insurance under the SFIP provide coverage at replacement cost?
Only for one type of building, and if several criteria are met. Replacement cost coverage is available for a single-family dwelling that is the policyholder's principal residence and is insured for at least 80 percent of the building's replacement cost at the time of the loss up to the maximum amount of insurance available at the inception of the policy term (see #38 and #39 for coverage limitations). Replacement cost coverage does not apply to manufactured (i.e. mobile) homes smaller than certain dimensions specified in the policy or to condominium units not contiguous to the ground.
Contents losses are always adjusted on an actual cash value basis. If the replacement cost conditions are not met, the building loss also is adjusted on an actual cash value basis.
Filing a Flood Insurance Claim
47. How does a policyholder file a claim for flood loss?
A flood insurance policyholder should immediately report any flood loss to the insurance agent who wrote the policy. A claims adjuster will be assigned the loss, and the policyholder must file a "proof of loss" within 60 days of the date of loss. A policyholder whose policy is with a Write Your Own (WYO) company must follow the company's claim procedures. The 60-day time limit for filing a proof of loss remains the same. When the anticipated number of claims exceeds a predetermined number after widespread flooding, an Integrated Flood Insurance Claims Office is established at the site to assist insurance agents and adjusters in providing prompt service to policyholders.
48. What is a "proof of loss?"
A proof of loss -- the policyholder's valuation of claimed damages -- is a sworn statement made by the policyholder that substantiates the insurance claim and is required to be submitted to the NFIP or WYO company within 60 days of the loss. A printed form usually is available from the adjuster assigned to the claim.
49. What is a "loss in progress?"
A loss in progress occurs when actual flood damage to a building or its contents started before the inception of the policy.
50. Is a loss in progress covered?
The Standard Flood Insurance Policy does not cover damage caused by a loss in progress.
51. What is the maximum that can be collected for a loss under the NFIP policy?
An insured will never be paid more than the value of the covered loss, less deductible, up to the amounts of insurance purchased, so purchasing insurance to value is an important consideration. The amount of insurance a property owner needs should be discussed with an insurance agent or broker.
The Community's Role in Floodplain Management
52. What is the role of the community in NFIP participation?
When the community chooses to join the NFIP, it then must adopt and enforce minimum floodplain management standards for participation. FEMA works closely with states and local communities to identify flood hazard areas and flooding risks. The floodplain management requirements within the SFHA are designed to prevent new development from increasing the flood threat and to protect new and existing buildings from anticipated flood events.
When a community chooses to join the NFIP, it then must require permits for all development in the SFHA and ensure that construction materials and methods used will minimize future flood damage. Permit files must contain documentation to substantiate how buildings were actually constructed. In return, the federal government makes flood insurance available for almost every building and its contents within the community.
Communities must ensure that their adopted floodplain management regulations and enforcement procedures meet program requirements. Local regulations must be updated when additional data are provided by FEMA or when federal or state standards are revised.
53. What is the difference between a FHBM and a FIRM?
A FHBM is based on approximate data and identifies, in general, the SFHAs within a community. It is used in the emergency program of the NFIP for conversion to the regular program. If a detailed Flood Insurance Study has been performed, the FIRM will show base flood elevations and insurance risk zones in addition to floodplain boundaries. The FIRM may also show a delineation of the floodway. (See Question #64 for a description of "floodway.") After the effective data of the FIRM, the community's floodplain management ordinances must be in compliance with appropriate regular program requirements. Actuarial rates, based on the risk zone designations shown on the FIRM, are then applied for newly constructed and substantially improved buildings.
54. Do state governments assist in implementing the NFIP?
At the request of the Federal Insurance Administrator, each governor has designated an agency of state or territorial government to coordinate that state's or territory's NFIP activities. These agencies often assist communities in developing and adopting necessary floodplain management measures. Some states require more stringent measures than those of the NFIP. A list of state coordinating agencies and their telephone numbers is provided starting on page 35 of this booklet.
55. Do federal requirements take precedence over state requirements?
The regulatory requirements set forth by FIA are the minimum measures acceptable for NFIP participation. More stringent requirements adopted by the local community or state would take precedence over the minimum regulatory requirements established for flood insurance availability.
56. What is meant when FEMA uses the phrase, "floodplain management measures"?
The phrase, "floodplain management measures," refers to an overall community program of corrective and preventive measures for reducing future flood damage. These measures take a variety of forms and generally include zoning, subdivision, or building requirements, and special-purpose floodplain ordinances.
57. Do the floodplain management measures required by the NFIP affect existing buildings?
They affect existing buildings only when an existing building is substantially improved.
58. What constitutes "substantial improvement" or "substantial damage?"
"Substantial improvement" means any rehabilitation, addition, or other improvement of a building when the cost of the improvement equals or exceeds 50 percent of the market value of the building before start of construction of the improvement. The term includes buildings which have incurred "substantial damage," or damage of any origin sustained by a building when the cost of restoring the building to its pre-damaged condition would equal or exceed 50 percent of the market value of the building before the damage occurred. Substantial damage is determined regardless of the actual repair work performed.
Substantial improvement or damage does not, however, include any project for improvement of a building to correct existing violations of state or local health, sanitary, or safety code specifications which have been identified by the local code enforcement official and which are the minimum necessary to assure safe living conditions. Also excluded from the substantial improvement requirement are alterations to historic structures as defined by the NFIP.
59. Do FEMA requirements apply to construction taking place outside the Specific Flood Hazard Areas (SFHA) within the community?
No. The local floodplain management regulations required by the NFIP apply only in the SFHAs.
60. Can modifications be made to the basic floodplain management requirements?
In developing their floodplain management ordinances, participating communities must meet at least the minimum regulatory standards issued by FEMA. NFIP standards and policies are reviewed periodically and revised whenever appropriate.
MAPPING
61. What is the role of the local community in its flood hazard assessment?
Before the flood hazard assessment is initiated, FEMA considers all available existing information for use in the study. Public meetings may be conducted at which interested parties may present relevant facts to help ensure accurate results. FEMA also works closely with each community's officials before and during the study to describe the technical procedures and to obtain community input before publication of the Flood Insurance Study (FIS) and Flood Insurance Rate Map (FIRM). Before the FIS is initiated, community officials, FEMA representatives, and the study contractor meet to discuss the areas that need to be studied. This is called the time and cost estimate meeting.
62. How are flood hazard areas and flood levels determined?
Flood hazard areas are determined using statistical analyses of records of river flow, storm tides, and rainfall; information obtained through consultation with the community; floodplain topographic surveys; and hydrologic and hydraulic analysis. The detailed FIS covers those areas that are subject to flooding from rivers and streams, along coastal areas and lake shores, or in shallow flooding areas, but do not include areas of less than one square mile.
63. What are flood hazard zones and what do they mean?
The Flood Insurance Rate Map (FIRM) shows areas within the 100-year flood boundary, which are termed "Special Flood Hazard Areas (SFHAs)." A "100-year flood" does not refer to a flood that occurs once every 100 years, but refers to a flood level with a 1 percent or greater chance of being equalled or exceeded in any given year. The SFHAs may be further subdivided into insurance risk rate zones (see below). Areas between the 100-year and 500-year flood boundaries are termed "moderate flood hazard areas." The remaining areas are above the 500-year flood level and are termed "minimal flood hazard areas."
Historically, about one-third of claims paid by the NFIP are for flood damage tin areas identified as having only "moderate" and "minimal" risk of flood. Flooding in these often is the result of inadequate local drainage 25 systems, and such flooding sources with small drainage areas are generally not identified on FIRMS. The SFHAs are subdivided into flood hazard zones (insurance risk rate zones) according to the following criteria:
Zone V: SFHAs along coasts subject to inundation by the 100-year flood with the additional hazards associated with storm waves. Because detailed hydraulic analyses have not been performed, no base flood elevations or depths are shown. Mandatory flood insurance purchase requirements apply.
Zones VE and V1-30: SFHAs along coasts subject to inundation by the 100-year flood with additional hazards due to velocity (wave action). Base flood elevations derived from detailed hydraulic analyses are shown within these zones. Mandatory flood insurance purchase requirements apply. (Zone VE is used on new and revised maps in place of Zones V1-30.)
Zone A: SFHAs subject to inundation by the 100-year flood. Because detailed hydraulic analyses have not been performed, no base flood elevation or depths are shown. Mandatory flood insurance purchase requirements apply.
Zones AE and A1-30: SFHAs subject to inundation by the 100-year flood determined in a Flood Insurance Study by detailed methods. Base flood elevations are shown within these zones. Mandatory flood insurance purchase requirements apply. (Zone AE is used on new and revised maps in place of Zones A1-30.)
Zone AH: SFHAs subject to inundation by 100-year shallow flooding (usually areas of ponding) where average depths are between one and three feet. Base flood elevations derived from detailed hydraulic analyses are shown in this zone. Mandatory flood insurance purchase requirements apply.
Zone AO: SFHAs subject to inundation by 100-year shallow flooding(usually sheet flow on sloping terrain) where average depths are between one and three feet. Average flood depths derived from detailed hydraulic analyses are shown within this zone. Mandatory flood insurance purchase requirements apply.
Zone A99: SFHAs subject to inundation by the 100-year flood which will be protected by a federal flood protection system when construction has reached specified statutory progress toward completion. No base flood elevations or depths are shown. Mandatory flood insurance purchase requirements apply.
Zones B, C, and X: These areas have been identified in the community flood insurance study as areas of moderate or minimal hazard from the principal source of flood in the area. However, buildings in these zones could be flooded by severe, concentrated rainfall coupled with inadequate local creates areas of high flood risk within these rate zones. Flood insurance is available in participating communities but is not required by regulation in these zones. (Zone X is used on new and revised maps in place of Zones B and C.)
Zone D: Unstudied areas where flood hazards are undetermined but flooding is possible. No mandatory flood insurance purchase requirements apply, but coverage is available in participating communities.
64. What is a floodway and who designates it?
The floodway includes the channel of a river and the adjacent floodplain that state standards specify smaller allowable increases. FEMA requires the community to designate a floodway to avoid the possibility of significantly additional rise in base flood elevations.
65. If a FIRM is believed to be incorrect, what can be done to change it?
Three procedures have been established for changing or correcting a flood map. They are: Letter of Map Amendment (LOMA), Letter of Map Revision (LOMR), and physical map revision.
66. What is a LOMA?
A LOMA is the result of an administrative procedure in which the Federal Insurance Administrator reviews scientific or technical data submitted by the owner or lessee of property who believes the property has incorrectly been included in a designated SFHA. A LOMA amends the currently effective FEMA map and establishes that a property is not located in a SFHA.
Although FEMA may issue a LOMA, it is the lending institution'$ prerogative to require flood insurance as a condition of its own beyond the provisions of the Flood Disaster Protection Act of 1973 before granting a loan or mortgage. Those seeking a LOMA should first confer with the affected lending institution to determine whether the institution will waive the requirement for flood insurance if a LOMA is issued. If so, the policyholder may cancel flood insurance coverage and obtain a premium refund.
67. What comprises technical or scientific data?
In general, the scientific or technical data needed to effect a map amendment include certified topographic data and/or hydrologic and hydraulic analyses to support the request for amendment or revision.
68. What is a LOMR?
A LOMR is an official revision to the currently effective FEMA map. It is used to change flood zones, floodplain and floodway delineations, flood elevations, and planimetric features. All requests for LOMRs must be made to FEMA through the chief executive officer of the community, since it is the community that must adopt any changes and revisions to the map. A LOMR is usually followed by a physical map revision.
69. What is a conditional map revision?
Communities, developers, and property owners often undertake improvement projects intended to reduce the flood hazard in their communities and usually want FEMA maps to recognize the effects of these projects. Similarly, property owners and developers who intend to place structures in the 100-year floodplain usually must demonstrate to lending institutions and local officials that these structures will be above base flood elevation.
Those who are planning such actions may submit design plans and other engineering data to FEMA and request that FEMA evaluate them. The response to such requests describe the changes that may eventually be made to the effective flood map and are called "conditional letters of map revision."
FIA charges a fee to defray the costs associated with the evaluation of proposed projects. Information on these fees may be obtained from the appropriate FEMA Regional Office (see pp. 35-37).
70. What is a physical map revision?
A physical map revision is an official republication of a map to effect changes to flood insurance zones, floodplain delineations, flood elevations, floodways, and planimetric features. These changes typically occur as a flood insurance risk zones.
The community's chief executive officer can submit scientific and technical data to FEMA to support the request for a map revision. The data will be analyzed, and the map will be revised if warranted. The executive officer is afforded a review period. When base flood elevations are changed, a 90-day appeal period is provided, followed by a period for formal approval.
71. Who should be contacted in FEMA to initiate a LOMA, LOMR, or physical map revision?
Requests for multiple-lot or multiple-building determinations that do not involve changes to base flood elevations or floodways should be addressed to FIA's Office of Risk Assessment at the address given in the Flood Insurance Address and Telephone Directory (Page 33).
All other requests should be sent to the appropriate FEMA Regional Office (see pp. 35-37).
72. How long does it take to obtain a LOMA, LOMR, or physical map revision?
For single-building or single-lot determinations that do not involve changes to base flood elevations or floodways, a LOMA or LOMR generally can be issued within four weeks. LOMAs and LOMRs involving multiple lots or multiple buildings require up to eight weeks to process. Times are specified from the date of receipt of all technical, scientific, or legal documentation. LOMRs involving decreases in Base Flood Elevations (BFEs) or floodways take approximately 90 days for processing. If changes in flooding conditions are extensive or if BFEs increase, a physical map revision will be required, which may take 12 months or longer.
73. If a LOMA or LOMR is granted and the lender waives the requirement for flood insurance, how can a flood insurance policy be cancelled?
To effect a cancellation of a flood insurance policy, the policyholder must supply a copy of the LOMA or LOMR and a waiver for the flood insurance purchase requirement from the lending institution to the insurance agent or broker who services the policy. A completed a cancellation form with the LOMA or LOMR and the waiver must be submitted by the agent to the NFIP or the appropriate Write Your Own company. When a LOMA or LOMR is issued and cancellation requested, the policyholder may be eligible for a refund of the premium paid for the current policy year only if no claim is pending and no claim has been paid during the current policy year.
74. Why is the burden of proof on the person requesting a map change?
Government agencies and private engineering firms are contracted at considerable cost to perform analyses of flood risks and prepare flood maps for the community. The analysis and Flood Insurance Study findings are then reviewed by FEMA and community officials. FEMA has no justification for changing a study determination without sufficient evidence that a change is appropriate.
75. How can the technical data that is the basis for the flood hazard information shown on the published FEMA maps be obtained?
By writing to the address shown in the Flood Insurance Address and Telephone Directory (page 33) for the EDSP Repository and requesting the technical data. Requesters' letters should give the name of the community for which the data are sought, provide specific information as to the portion of the community and type of data needed, and should give the requester's name and telephone number. Before the request is serviced, the repository staff will call to discuss the request. If a charge will be necessary for the service, the extent of the service and the costs will be discussed during the call.
Flood Insurance Address and Telephone Directory
For general program information or inquiries about the laws, regulations, or administrative policies related to the NFIP, write: Federal Emergency Management Agency Federal Insurance Administration 500 C Street, S.W. Washington, DC 20472
For insurance questions, call local property insurance agents or brokers or call toll-free, 1-(800) 638-6620*. * In Maryland, call 1-(800) 492-6605. In Alaska, Guam, and Hawaii, call 1-(800) 638-6831.
To order Flood Hazard Boundary Maps, Flood Insurance Rate Maps, and for information on Flood Insurance Studies, call the Flood Map Distribution Center's toll-free number, 1-800-333-1363, or mail a Flood Insurance Map Order Form (obtained by calling the same number), to: Federal Emergency Management Agency Flood Map Distribution Center 6930 (A-4) San Tomas Road Baltimore, MD 21227-6227
For information pertaining to hazard identification mapping and floodplain management, contact the appropriate FEMA Regional Office listed on the following pages or the FEMA/FIA address shown above.
For requests for multiple-lot or multiple-building LOMA, LOMR, or physical map revision determinations, write: Federal Emergency Management Agency Federal Insurance Administration Office of Risk Assessment Technical Operations Division Washington, DC 20472
For technical data that is the basis for flood hazard identification write: EDSP Repository 7500 Greenway Center Drive Suite 700 Greenbelt, MD 20770
FEMA Regional Offices
REGION I
(Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont)
J. W. McCormack Post Office and Courthouse Building
Room 462
Boston, MA 02109
(617) 223-9561
REGION II
(New Jersey, New York, Puerto Rico, and Virgin Islands)
26 Federal Plaza
Room 1337
New York, NY 10278
(212) 225-7203
REGION III
(Delaware, District of Columbia, Maryland, Pennsylvania, Virginia, and West Virginia)
Liberty Square Building (Second floor)
105 South Seventh Street
Philadelphia, PA 19106
(215) 931-5750
REGION IV
(Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee)
1371 Peachtree Street, N.E
. Suite 700
Atlanta, GA 30309
(404) 853-4400
REGION V
(Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin)
175 West Jackson Boulevard (Fourth floor)
Chicago, IL 60604-2698
(312) 408-5500
REGION VI
(Arkansas, Louisiana, New Mexico, Oklahoma, and Texas)
Federal Regional Center
800 North Loop 288
Denton, TX 76201-3698
(817) 898-5134
REGION VII
(Iowa, Kansas, Missouri, and Nebraska)
Federal Office Building
911 Walnut Street
Room 200
Kansas City, MO 64106
(816) 283-7002
REGION VIII
(Colorado, Montana, North Dakota, South Dakota, Utah, and Wyoming)
Denver Federal Center Building 710
P.O. Box 25267
Denver, CO 80225-0267
(303) 235-4830
REGION IX
(Arizona, Cal | 