INTRODUCTION AND GENERAL RULES - H2O Partners

1 A Welcome to The NFIP's Basic Agent Tutorial: Key Fundamentals of Flood Insurance Focused on flood insurance basics for insurance professionals 1. Section 1. INTRODUCTION AND. GENERAL RULES . 2. 1. Section 1 INTRODUCTION and GENERAL RULES Here's our Section 2 - Policy Rating, AGENDA Elevations, Premiums and More Section 3- Coverage, limitations and Exclusions in the SFIP. Section 4- Loss Settlement Provisions Section 5- Flood Insurance Resources 3. NFIP Flood Insurance Manual Access the NFIP Flood Insurance Manual: Online at the Flood Insurance Library: 4.

2 2. What is a flood? NFIP definition of flood . 6. What is a flood? NFIP definition of flood . 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. 7. 3. What is a flood? 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 Not Mudflows: Landslide Slope failure Saturated soil mass 8.

3 What is a flood? Flood Related Erosion Collapse or subsidence of land along the shore of a lake or similar body of water Caused by waves or currents of water exceeding cyclical levels Results in flooding 9. 4. Who has flood risk? All Property Owners All zones 10. Special flood hazard Areas SFHAs and (SFHAs). Non-SFHAs High Risk zones AE (replaces A1-A30). A, AH, AO, A99, AR. VE (replaces V1-V30), V, VO. Non-Special flood hazard Areas (non-SFHAs). Low to Moderate Risk zones B, C, X. D (undetermined). 100-year floodplain = 1% annual chance flood 11.

4 Over 30-year mortgage likelihood grows from 1% to at least 26%. 5. Flood Insurance Rate Map (FIRM). Training Agenda SFHAs appear as dark shading on a Flood Insurance Rate Map (FIRM). 12. 12. Digital Flood Insurance Rate Map (DFIRM). 13. 6. FEMA Map Service Center Locating flood maps: 14. How is NFIP flood insurance purchased? How does the NFIP Work? 15. 7. Who can buy NFIP. flood insurance? Community Participation All zones 16. Participating Communities FEMA COMMUNITY. agrees to make agrees to adopt flood insurance and enforce available floodplain management regulations 17.

5 8. Community Status Book Report 18. Ability to write NFIP policies may Coastal Barrier be restricted in some: Resources System Coastal Barrier Resources System (CBRS) units Otherwise Protected Areas (OPA). Coastal Barrier Resources Act and Coastal Barrier Improvement Act enacted: October 18, 1982. November 16, 1990. Fish & Wildlife Service's online CBRS Mapper Tool Buildings may be ineligible for coverage in participating communities, 19. If constructed on or after identification date. 9. How is NFIP flood insurance purchased? Write Your Own Company NFIP Direct Servicing Agent Licensed Property and Casualty Agent 20.

6 Who MUST buy flood insurance? A or V zones 21. 10. Who MUST buy flood insurance? Used as security for a loan 22. Who MUST buy flood insurance? Designated Loan 23. 11. What is a designated loan? . A loan secured by a building or mobile home that is located or to be located in a Special flood hazard Area in which flood insurance is available under the Act Please note: Emphasis on a building or mobile home as collateral 24. Who SHOULD buy flood insurance? Flood Insurance vs. Disaster Assistance 25. 12. Flood Insurance vs. Disaster Assistance 26.

7 How much NFIP. flood insurance can be purchased? NFIP maximums vary by building type and program limits 27. 13. How much flood insurance coverage is available? Emergency Program Regular Program Residential (1-4 family). Building $35,000 $250,000. Contents $10,000 $100,000. Other Residential Building $100,000 $500,000. Contents $ 10,000 $100,000. Non-Residential Business/Other Non-Residential Building $100,000 $500,000. Contents $100,000 $500,000. 28. When does an NFIP. policy become effective? 30-day waiting period Exceptions 29. 14. When does an NFIP.

8 Policy become effective? Insurance in connection with a loan transaction. There is a 30 day (MIRE). waiting period before new or modified flood insurance policies go Insurance purchased into effect. Wildfire within 13. exception months of a Exceptions are provided map revision for: (1-day wait). For detailed information, please see the Before You Start section of the Flood Insurance Manual 30. KEY NFIP TERMS, TOOLS, AND RULES . To use and to live by . 31. 15. Defining Pre-FIRM and Post-FIRM. Pre-FIRM Post-FIRM. On or After the initial FIRM or Built before initial FIRM.

9 After 12/31/1974 .. or whichever is LATER. On or before 12/31/1974. 32. Full-Risk Rates vs. Subsidized Rates Full Risk Rates Represent the building's Do not represent the true flood risk. building's true flood risk. Premium reflects the risk assumed by the Determined with program and all limited underwriting administrative information expenses. Discounted rates that Takes into account the have traditionally been Subsidized full range of possible available for Pre-FIRM. flood losses. buildings in A or V. zones . 33. 16. Regular vs. Emergency Program Initial participation phase Limited amount of coverage flood hazard Boundary Map Emergency (FHBM).

10 Program Regular Final phase of participation Program Full limits of coverage Flood Insurance Rate Map (FIRM). 34. Base Flood Elevations (BFEs). BFE = 1% Chance Flood 35. 17. Preferred Risk Policy Lower Cost Preferred B,C,X, Dwelling Form Risk A99, AR. Policy zones GENERAL Property Form 36. Miscellaneous NFIP RULES Evidence of Insurance Flood insurance application & premium NFIP Policy Term payment Community Participation 1 year annual term Copy of dec page All policies Probation No binders NFIP Direct Suspension Write-Your-Own RULES 37.