1 A Welcome to Federal Flood Insurance &. Commercial property Exposures A discussion of what is different and unique 1. Section 1 How the NFIP Works Section 2 Main Street Properties Here's our Section 3 NFIP Coverage Forms AGENDA Section 4 Key NFIP Terms and Tools Section 5 Comm'l property & the NFIP. Section 6 Coverages, Limitations &. Exclusions Section 7 Condominiums in the NFIP. Section 8 Miscellaneous Issues Section 9 Flood Insurance Resources Federal Flood Insurance &. Commercial property Exposures 3. 1. NFIP Flood Insurance Manual Access the NFIP Flood Insurance Manual: Online at the Flood Insurance Library: 4. Section 1. HOW THE NFIP WORKS. 5. 2. Training Agenda Things Agents Need to Know 1. 2. 11. 10 3. 9 4. 8 5. 7 6. 6. Section 2. MAIN STREET PROPERTIES.
2 CASE STUDY. 7. 3. Case Study Facts Your client is Main Street Properties, Inc., owner of a Main Street Properties variety of Commercial properties, consisting of the Case Study following retail, habitational, office and mixed use buildings: About the properties 6-story, 52 unit apartment building (Zone AE). 4-unit apartment building (Zone AE). 10-story office building (Zone X). 1-story retail building (Zone X). 12-story boutique hotel (Zone AE). 4-story mixed-use building (Zone AE). Mixed-Use Building Restaurant first floor 52-unit Apartment Building Apartments 2 thru 4 floors nd th 4-unit Apartment 10-story Office Building 1-story Retail Building 12-story Boutique Hotel 8. Section 3. NFIP COVERAGE FORMS. 10. 4. Standard Flood Insurance Policy (SFIP).
3 What's the purpose of the structure? 11. Provides building and/or personal Dwelling Form property coverage for: Non-condominium 1-to-4 family dwellings Dwelling unit in a residential condominium building Residential townhouse/rowhouse Mobile Homes/Travel Trailers as dwellings 4-unit Apartment 12. 5. Provides building and/or personal General property coverage for: property Form Non-condominium Residential Buildings with 5 or more units Apartment building Co-operative building Dormitory Assisted living facility Non-residential Buildings Office building School, Church Factory, Warehouse 101 -- story story Office Retail Building Agricultural building Building Restaurant, etc. 12 -Mixed-use Building story Boutique Hotel 52-unit Apartment Building 13.
4 Residential Provides building and, if purchased, Condominium Building contents coverage (commonly owned): Association Policy Condominium buildings with 75% or more of total floor area for residential use Issued to a residential condominium association On behalf of association and unit owners 14. 6. Preferred Risk Policy (PRP). Description & Eligibility Requirements 10-story Office Building 1-story Retail Building Lower-cost Standard Flood Not Eligible for PRP, if: Insurance Policy (SFIP). Any of following exist:**. 2 Flood claim payments for separate Uses Dwelling or General losses, each > $1,000. property Forms 3 or more Flood claim payments for separate losses, regardless of $. RCBAP not eligible 2 Federal Flood disaster relief payments for separate occurrences, each >.
5 Buildings in B, C, X, A99 and $1,000. AR zones 3 Federal Flood disaster relief payments for separate occurrences, regardless of In regular program amount communities 1 Flood claim payment and 1 Federal disaster relief payment, each for Must meet eligibility separate losses and each > $1,000. requirements **During any 10-year period, regardless of change of ownership of the building 15. Section 4. KEY NFIP TERMS & TOOLS. 17. 7. Defining Pre-FIRM and Post-FIRM. Pre-FIRM Post-FIRM. On or After the initial FIRM or Built before initial FIRM After 12/31/1974 .. or whichever is LATER. On or before 12/31/1974. 18. 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.
6 Premium reflects the risk Determined with limited assumed by the program underwriting information and all administrative expenses. Discounted rates that have traditionally been available for Pre-FIRM buildings in A. Subsidized Takes into account the full or V zones. range of possible Flood losses. 19. 8. Regular vs. Emergency Program Intitial participation phase Limited amount of coverage Flood Hazard Boundary Map Emergency (FHBM). Program Regular Program Final phase of participation Full limits of coverage Flood Insurance Rate Map (FIRM). 20. Base Flood Elevations (BFEs). BFE = 1% Chance Flood 21. 9. Section 5. Commercial property &. THE NFIP. 23. Building Classifications Personal Commercial Residential Non-Residential 10. Examples of Other Residential Other Residential Apartment building Buildings Residential Cooperative Dormitory Assisted living facility Mixed-use building Non-residential use limited < 25% of total floor area Hotels, motels, tourist homes and rooming houses with: 5 or more units Normal guest occupancy is 6 months or more Non-condominium residential buildings with 5 or more units 25.
7 Examples of Non-Residential Buildings Non-Residential Business Definition/Examples Retail shop Non-Residential Business Restaurant Commercial enterprise primarily Mercantile building carried out to generate income Factory and coverage is for: Warehouse A building designed as a non- Nursing home habitational building Industrial buildings A building designed for use as Office buildings office, retail, wholesale, hospitality Hotels/Motels (< 6 months) space or for similar uses Licensed bed & breakfast Mixed use building: Commercial garage 50% or less of total floor area is devoted to residential use in a single family dwelling Commercial agricultural building 75% or less of total floor area is devoted to residential use for all other residential properties 26.
8 11. Examples of Non-Residential Buildings Other Non-Residential Definition/Examples House of worship Other Non-Residential Non-profit building Subcategory of non-residential School buildings State & local government building A non-habitational building that does not qualify as a business or Non- Commercial farm building residential building Silo A small business cannot use this Grain bin category Tools/storage shed Garages See examples listed Pool house Recreational building 27. Mixed-Use Bottom floor retail Building Two floors above are residential Is it a residential or non- residential building? Non-residential business or Other non-residential? 28. 12. Mixed-Use Bottom floor restaurant Building Three floors above are residential Is it a residential or non- residential building?
9 Non-residential business or Other non-residential? Mixed-Use Building First Floor Restaurant Floors 2 thru 4 - Apartments 29. 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. 52-unit Apartment Building 4-unit Apartment 30. 13. Coverage Limit Maximums Small vs. Large Commercial NFIP targets residential and small Commercial Max limits meet lender compliance minimums Large Commercial Use as first layer Deductible buyout Check private sector Higher primary limits Excess limits 31.
10 Loss Settlement Provisions Loss Settlement and the SFIP. SFIP Loss Settlement Approaches: Replacement Cost Value Actual Cash Value Special Loss Settlement 32. 14. Loss Settlement Provisions Replacement Cost under Dwelling Form Replacement Cost Loss Settlement applies to: Single Family Dwelling Building only Contents (ACV). Must be principal residence Insured-to-Value: 80% of replacement cost at time of loss, or Maximum under NFIP. 33. Loss Settlement Provisions Actual Cash Value Actual Cash Value loss settlement applies to: 2-to 4 family dwellings Single family that are not eligible for RCV. Other Residential buildings Non-residential buildings Detached garages Personal property Mobile homes under 16 ft. wide and under 600 sq. ft 34. 15. Replacement Cost Value (RCV).