NATIONAL FLOOD INSURANCE PROGRAM
FLOOD
INSURANCE
MANUAL
October 2021
Risk Rating 2.0: Equity in Action Edition
This page is intentionally left blank.
Message to National Flood Insurance Program
Agents and Insurers
Over the past several years, we at the Federal Emergency
Management Agency (FEMA) have emphasized our
commitment to our policyholders. This year, we are significantly
transforming the ways we manage the National Flood
Insurance Program (NFIP). This transformation will enable our
partners and stakeholders, Write Your Own (WYO) insurance
companies, the NFIP Direct, insurance company vendors,
and agents, as insurance professionals, to improve our
policyholders’ experience.
A key part of this transformation is Risk Rating 2.0: Equity in
Action, which will change the way FEMA fundamentally views
and evaluates flood risk. The current rating methodology
has not changed since the 1970s; since then, technology
has evolved and so has FEMA’s understanding of flood risk.
After three years and thousands of hours of staff time, we are delivering a 21st century system
capable of developing premiums that reflect a single property’s unique flood risk.
The goal of Risk Rating 2.0 is to deliver easy-to-understand premiums that are distributed
more equitably across all policyholders based on the replacement cost value of their home and
their property’s unique flood risk. By addressing the current inequities, Risk Rating 2.0 puts
the NFIP on the path towards sound financial footing by creating a more stable program that
is accountable to taxpayers, more accurately reflects flood risk to both policyholders and non-
policyholders, and helps disaster survivors recover faster after floods.
An added benefit of Risk Rating 2.0 is that it will make it easier for flood insurance agents to
sell policies and better communicate flood risk to current and prospective policyholders. We are
committed to making this transition to the new methodology as smooth as possible with the
creation of the Industry Transition Memo and the new Risk Rating 2.0: Equity in Action Flood
Insurance Manual, which will make rates and processes easier to understand from the agent,
insurer, and policyholder’s point of view. Our goal is to ensure the NFIP provides the information
and processes needed to support the policyholder, agent, and insurer.
One of FEMA’s strategic goals is to build a culture of preparedness by helping property owners
understand the proper amount of flood insurance coverage for each individual property’s level
of risk. Risk Rating 2.0 will better inform individuals and communities about flood risk, set
premiums to strongly signal those risks, and promote actions to mitigate against them.
As an insurance professional, you are the key to guiding policyholders through the entire NFIP
policy lifecycle — from completing the application to endorsing coverage as the property value
changes to helping them understand the new rates under Risk Rating 2.0.
Each of you represents the NFIP and our improved customer experience. Each agent will likely
be the first – and may be the only – NFIP representative policyholders engage with unless there
is a major flood event. FEMA depends on each agent’s expertise and continued commitment to
help policyholders protect their property and recover more quickly from potentially devastating
flood losses.
I would like to take a moment to acknowledge the hard work you do on our behalf, particularly
during this taxing year. We recognize your job is not easy. However, you can affect the flood
insurance policy experience positively for NFIP policyholders and help people prepare for the
Message to National Flood Insurance Program
Agents and Insurers
unknown. I appreciate that you go the extra mile to make sure we are treating our policyholders
with integrity and respect.
Risk Rating 2.0: Equity in Action will allow us to bring generational change to the NFIP as we
continue building a culture of preparedness, improving individual and community resilience, and
advancing our goal to reduce disaster suffering. Together we can help close the insurance gap
and build more resilient communities.
Sincerely,
David I. Maurstad
Deputy Associate Administrator
for Insurance and Mitigation
U.S. Department of Homeland Security
Washington, DC
20472
October 1, 2021
Dear N
ational Flood Insurance Program Flood Insurance Manual User:
FEMA is pleased to present this updated Risk Rating 2.0: Equity in Action (Risk Rating 2.0) edition
of the National Flood Insurance Program (NFIP) Flood Insurance Manual, which applies to all
new NFIP policies and to renewal policies (at the policyholder’s option) effective October 1, 2021
or later. The NFIP is on a multi-year, transformative journey to deliver excellent customer service,
support community resilience, and reduce disaster suffering for all NFIP policyholders. This edition
of the Flood Insurance Manual presents guidance for a new rating methodology that will provide an
improved customer experience for policyholders and streamline operations for industry partners.
To underpin this effort, FEMA is introducing a new pricing paradigm in which the cost of flood
insurance more accurately reflects the associated risk. The NFIP is moving away from pricing based
primarily on a building’s elevation and its location inside or outside of a high-risk flood zone. The
legacy rating methodology, at times, created disparities at the edge of flood zones, giving neighboring
property owners markedly different flood insurance costs. FEMA’s new rating methodology leverages
catastrophe modeling, geospatial technology, and NFIP mapping data to estimate risk and determine
the cost of flood insurance for each individual building.
The new NFIP rating methodology, referred to as Risk Rating 2.0, produces flood insurance pricing
that is more equitable and easier to understand. So that each building’s flood insurance cost reflects its
unique flood risk, Risk Rating 2.0 considers additional types of flooding as well as property-specific
rating variables such as the distance to a flooding source and the cost to rebuild. Property-specific
pricing will clearly signal risk, helping policyholders and communities become more resilient and
make risk-informed decisions to mitigate the effects of flooding.
This Flood Insurance Manual Risk Rating 2.0 edition updates existing NFIP underwriting policies
and processes to enable effective and consistent program implementation within the Risk Rating 2.0
framework. It applies to new NFIP policies effective October 1, 2021 or later, and it also applies to
existing NFIP policies following their renewal under the new pricing methodology. The Risk Rating
2.0 Industry Transition Memo complements this Flood Insurance Manual edition. It explains the
transition from the legacy rating methodology to the new pricing methodology. More specifically, it
provides business, data, and information technology guidance for NFIP insurers and vendors on how
to transition existing policyholders, with renewals dates of October 1, 2021 through March 31, 2022,
who choose to renew under the new pricing methodology.
This Risk Rating 2.0 edition of the Flood Insurance Manual also reflects revisions to NFIP
regulations that become effective October 1, 2021. FEMA published the final rule (“Conforming
Changes To Reflect the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) and the
Homeowners Flood Insurance Affordability Act of 2014 (HFIAA), and Additional Clarifications for
Plain Language”) in the Federal Register in July 2020. 85 Fed. Reg. 43946. The rule codifies certain
www.fema.gov
October 2021 RR 2.0 edition of the National Flood Insurance Program Flood Insurance Manual
October 1, 2021
Page 2
provisions of previous NFIP legislation and makes additional substantive and non-substantive changes
to N
FIP regulations and the Standard Flood Insurance Policy forms. FEMA already implemented
most BW-12 and HFIAA legislative reforms in previous manuals and other NFIP guidance documents,
but this Flood Insurance Manual edition includes additional changes to a waiting period exception,
reformation procedures, deductible options, cancellation reason codes, and definitions.
While the basic structure of the Flood Insurance Manual remains the same, some material has been
reorganized, revised, expanded, or deleted to reflect the new rating paradigm and updated procedures.
For your reference and ease of use, the Change Record following this cover memo highlights
significant changes.
The table below summarizes aspects of the NFIP that are changing under Risk Rating 2.0 and
describes other aspects that are not.
What Is Not Changing What Is Changing
• Flood insurance coverage that
continues to align with the terms
and conditions of the Standard Flood
Insurance Policy.
• NFIP eligibility requirements.
• Statutory limits on annual premium
increases.
• Availability of statutory discounts,
including the Pre-FIRM and Newly
Mapped discounts.
• Availability of Community Rating
System discounts.
• Ability to transfer a policy and
applicable discounts to the buyer of
a property.
• Fundamentals of endorsements,
renewals, and cancellations.
• Use of Flood Insurance Rate Maps for
the mandatory purchase requirement
and floodplain management.
We are reducing complexity by:
• Eliminating the Elevation Certificate (EC)
requirement for rating purposes, while
allowing ECs optionally for all buildings.
• Simplifying guidance on premium discounts.
• Discontinuing the Preferred Risk Policy and
Mortgage Portfolio Protection Program.
• Minimizing the consideration of flood zones
in rating.
We are increasing investment in mitigation by:
• Expanding eligibility for mitigation discounts.
• Expanding applicability of Community Rating
System discounts.
We are addressing inequities by:
• Leveraging more information about building
characteristics and different types of flooding.
• Reflecting prior claims in premium costs,
while “forgiving” a single claim.
• Factoring in the cost to rebuild so that
policyholders with lower-valued homes no
longer pay more for their insurance coverage
than they should, nor policyholders with
higher-valued homes too little.
www.fema.gov
October 2021 RR 2.0 edition of the National Flood Insurance Program Flood Insurance Manual
October 1, 2021
Page 3
FEMA’s continued goal is to make NFIP products and processes easy to understand, enabling
insurance professionals to provide policyholders with an excellent customer experience. Thank you for
your continued support of the NFIP. Together we can make America more flood resilient and build a
culture of preparedness by closing the nation’s insurance gap.
Sincerely,
Jeffrey Jackson
Acting, Assistant Administrator for Federal Insurance
Federal Insurance and Mitigation Administration
www.fema.gov
This page is intentionally left blank.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 1
Change Record
October 1, 2021 Risk Rating 2.0 NFIP Flood Insurance Manual Edition
This change record presents significant highlights of the Risk Rating 2.0 Flood Insurance Manual (FIM)
sections and appendices. It also describes some changes from the April 1, 2021 FIM.
Section Changes
Section 1:
Introduction
• Provides an overview of the NFIP Flood Insurance Manual’s purpose
and contents.
• Describes the NFIP’s current operating model.
• Describes the contents of each section and appendix in the manual.
• Updates references and access information for NFIP resources.
Section 2:
Before You Start
• Explains the availability and use of the three Standard Flood
Insurance Policy (SFIP) forms.
• Clarifies guidance on insurable interest, tenant coverage, and
duplicate policies.
• Adds detailed guidance on multiple separate buildings located at a
single address.
• Describes distinctions between a Group Flood Insurance Policy
and an SFIP.
• Introduces a program change clarifying the flood-in-progress
coverage exclusion.
• Moves discussion of Increased Cost of Compliance (ICC) coverage to
Section 3: How to Write.
• Expands the effective date guidance to cover endorsements and
introduces program changes clarifying the loan exception and post-
wildfire exception.
• Clarifies guidance for policy assignments and transfers including the
specified timeframe for submitting the endorsement.
• Revises guidance for policy reformation due to insufficient premium
or insufficient rating information.
Section 3:
How to Write
• Revises much of the section to implement the Risk Rating 2.0
rating methodology.
• Summarizes the Risk Rating 2.0 rating methodology and the process
for writing new business.
• Provides guidance throughout for completing the Flood Insurance
Application Form as revised to reflect the new rating methodology.
• Presents general rating information divided into multiple
subsections: Policyholder and Mortgagee Information; Geographic
Location Variables; Structural Variables; Coverages and Deductibles;
Statutory Discounts; and Assessments, Fees, and Surcharges.
• Updates guidance on flood zones since zones no longer drive
NFIP rating.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2
October 2021 RR 2.0 Change Record
Section Changes
Section 3:
How to Write
continued
• Incorporates Community Rating System (CRS) guidance under
Geographic Location Variables, expanding the applicability of CRS
discounts to all flood zones.
• Expands and revises the lists of Building Occupancies and
Building Descriptions.
• Provides new guidance on Construction Type, Foundation Type, and
Floor of Unit.
• Introduces guidance on determining First Floor Height, eliminating
the EC requirement for rating purposes while allowing ECs with
accompanying photos optionally for all buildings.
• Provides detailed guidance on measures to earn mitigation discounts.
• Provides guidance on the new Building Replacement Cost Value and
Prior NFIP Claims rating factors.
• Revises deductible options and Federal Policy Fee amounts.
• Aligns tables for maximum coverage limits, deductibles, surcharges,
and fees, as applicable, with the revised Building Occupancies.
• Introduces and provides guidance on the application of statutory
discounts including the Pre-FIRM, Newly Mapped, and Emergency
Program discounts.
• Provides new guidance on a new policy after a real estate
transaction.
• Revises the Condominium Rating Information guidance to reflect the
revised Building Occupancies.
• Provides guidance on the revised concept of provisional rating,
addressing situations when FEMA’s system is unavailable to provide
premium quotes.
• Replaces rating examples with application scenarios in new
Appendix J: Sample Scenarios.
• Discontinues the Preferred Risk Policy and Mortgage Portfolio
Protection Program.
Section 4:
How to Endorse
• Revises much of the section to implement the Risk Rating 2.0
rating methodology.
• Provides guidance throughout for completing the revised General
Change Endorsement Form in conjunction with an updated version of
the Application Form to identify policy changes.
• Summarizes the process for premium-bearing changes.
• Expands the guidance on insufficient premium when processing
premium-bearing changes.
• Streamlines guidance on endorsement effective dates, referencing
details in Section 2: Before You Start.
• Expands discussion of premium-bearing changes during the renewal
cycle, adding new instructions on reducing coverage on a future
renewal date.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3
October 2021 RR 2.0 Change Record
Section Changes
Section 4:
How to Endorse
continued
• Clarifies the difference between rating adjustments and
rating corrections.
• Clarifies types of endorsements that are exempt from the annual
increase cap discount.
• Provides guidance on adding an EC to determine a building’s First
Floor Height.
• Incorporates guidance on endorsing (or canceling and rewriting)
policies to the correct policy form and property address.
• Provides guidance on endorsing a policy from a provisional rate to a
rating engine rate.
• Adds a new table with examples of premium-bearing changes.
• Updates guidance on policy assignment.
• Discontinues Alternative Rating.
Section 5:
How to Renew
• Reorganizes information on starting the renewal process.
• Updates guidance on invalid payments and insufficient payments.
• Revises the guidance for determining the renewal effective date,
introducing a program change around policy lapses.
• Expands guidance on renewal by Application Form or Recertification
Questionnaire and revises guidance on nonrenewal.
• Removes previous guidance related to the Newly Mapped discount.
• Expands discussion of premium-bearing changes during the renewal
cycle, adding new instructions on reducing coverage on a future
renewal effective date.
• Streamlines guidance on transfers of business at renewal,
referencing details in Section 2: Before You Start.
Section 6:
How to Cancel
• Updates overall guidance on cancellation requests under the
General Information heading.
• Groups cancellation reason codes by topic.
• Removes the following reason codes:
– Reason Code 18 “Mortgage Paid Off on an MPPP Policy”
– Reason Code 24 “Cancel/Rewrite Due to a Map Revision,
LOMA, or LOMR”
– Reason Code 25 “HFIAA Section 28”
• Adds the following reason codes:
– Reason Code 27 “Building Becomes Ineligible During the
Policy Term”
– Reason Code 28 “No Longer Required by Lender,” consolidating
all reason codes for situations when flood insurance is no longer
required by the lender because the building is no longer in a
SFHA or the mortgage has been paid off (Reason Codes 08, 09,
12, 15, 19)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 4
October 2021 RR 2.0 Change Record
Section Changes
Section 6:
How to Cancel
continued
– Reason Code 29 “Building Physically Altered and No Longer
Eligible for NFIP Coverage”
– Reason Code 30 “Insufficient Premium to Retain Coverage”
• Changed certain receipt date requirements.
• Updated refund rules in accordance with the July 2020 Final Rule.
Appendix A: Policy
• Updates the SFIP forms to reflect the July 2020 Final Rule. See the
Flood Insurance Manual cover memo for additional information.
Appendix B: Forms
• Incorporates new versions of the NFIP Flood Insurance Application,
General Change Endorsement, and Cancellation/Nullification
Request forms. Includes links to the current approved versions of
these forms on FEMA.gov.
• Incorporates the proposed version of the NFIP Residential Basement
Floodproofing Form (no changes to the form).
Appendix C: Quick
Start Guide
• A new appendix containing quick reference instructions for
completing the Flood Insurance Application Form when writing a
new policy.
Appendix D:
Flood Maps
• New lettering designation for this appendix.
• Revises and reorganizes the entire appendix.
Appendix E: Coastal
Barrier Resources
System
• New lettering designation for this appendix.
• Updates links to external references.
• Expands guidance on locating a property in the CBRS Buffer Zone.
Appendix G: Leased
Federal Properties
• Removes references to “full-risk rating,” clarifying that Leased
Federal Properties are ineligible for statutory discounts.
• Removes the “Settling a Claim” topic.
Appendix F: Severe
Repetitive Loss
Properties
• New lettering designation for this appendix.
• Updates the links to external references.
Appendix H: Claims
• New lettering designation for this appendix.
• Updates links to external references.
Appendix I:
Policyholder
Communications
• A new appendix that provides samples and requirements for
documents used to communicate with policyholders and other
interested parties.
• Consolidates in this appendix all the sample letters that used to
appear in various FIM sections.
Appendix J: Sample
Scenarios
• A new appendix that provides Flood Insurance Application
sample scenarios.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 5
October 2021 RR 2.0 Change Record
Section Changes
Appendix K:
Definitions and
Acronyms
• New lettering designation for this appendix.
• Adds new definitions, deletes old definitions, and revises existing
definitions as appropriate.
• Updates the list of acronyms.
Former Appendix C:
Lowest Floor Guide
• Removes this appendix because it is largely obsolete under the new
rating methodology. See the new Foundation Type and First Floor
Height guidance in Section 3: How to Write.
Former Appendix F:
Community Rating
System
• Removes this appendix because the revised CRS guidance is now
included in Section 3: How to Write.
• A list of all current CRS eligible communities and their status can be
found at: https://www.fema.gov/floodplain-management/community-
rating-system.
Former Appendix J:
Rate Tables
• Removes this appendix because the new rating methodology does
not use rate tables; instead FEMA’s system uses the submitted
policy information to generate a premium quote. Other topics that
remain relevant like ICC coverage; deductible options; statutory
discounts; assessments, fees, and surcharges; condominium rating;
and provisional rating now appear in Section 3: How to Write.
Former Appendix
K: Residential
Basement
Floodproofing
Premium Discount
• Removes this appendix because the floodproofing guidance in
Section 3: How to Write now links directly to the list of communities
approved for the residential basement floodproofing premium
discount.
This page is intentionally left blank.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL TOC • i
Table of Contents
Message to National Flood Insurance Program Agents and Insurers
Cover Memo
Change Record
1. Introduction
I.
Purpose and Audience .................................................................................................................. 1-1
II.
NFIP Program and Operational Model ........................................................................................ 1-1
A. Program Overview ................................................................................................. 1-1
B. NFIP Operational Model ......................................................................................... 1-1
C. Legislative Reforms ............................................................................................... 1-2
III.
Organization of the Document ..................................................................................................... 1-3
IV.
NFIP Resources .............................................................................................................................. 1-6
A. Policy-Specic Inquiries ......................................................................................... 1-6
B. General Assistance and Inquiries ........................................................................... 1-6
C. NFIP Topics and Contact Information ...................................................................... 1-6
2. Before You Start
I.
Policy Forms ....................................................................................................................................2-1
A. General Information .............................................................................................. 2-1
B. Insurable Interest .................................................................................................. 2-2
C. Duplicate Policies .................................................................................................. 2-3
D. Group Flood Insurance Policy ................................................................................. 2-4
II.
Eligibility for NFIP Coverage ..........................................................................................................2-4
A. Eligibility of Property Locations ............................................................................... 2-5
1. Where the NFIP Offers Insurance ....................................................................... 2-5
2. Where the NFIP Does Not Offer Insurance .......................................................... 2-5
B. Building Eligibility .................................................................................................. 2-6
1. General Information .......................................................................................... 2-6
2. Single and Multiple Buildings ............................................................................. 2-7
3. Eligible Types of Buildings ................................................................................. 2-7
4. Ineligible Types of Buildings ............................................................................... 2-10
C. Contents Eligibility ................................................................................................. 2-11
D. NFIP Coverage Exclusions and Limitations .............................................................. 2-12
III.
Effective Dates for New Policies and Endorsements ................................................................2-13
A. Standard 30-day Waiting Period ............................................................................. 2-14
1. General Information .......................................................................................... 2-14
2. Insufcient Payment ......................................................................................... 2-15
3. Invalid Payment ................................................................................................ 2-15
B. Map Revision Exception (1-Day Waiting Period) ........................................................ 2-15
C. Loan Exception (No Waiting Period) ........................................................................ 2-16
D. Post-Wildre Exception (1-Day Waiting Period) ......................................................... 2-18
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL TOC • ii
Table of Contents
2. Before You Start continued
IV.
Administrative Topics .....................................................................................................................2-18
A. Electronic Signatures............................................................................................. 2-18
B. Delivery of the Policy ............................................................................................. 2-19
C. Evidence of Insurance ........................................................................................... 2-19
V.
Assignment and Transfer of Business .........................................................................................2-19
A. Assignment of a Policy to a New Building Owner ...................................................... 2-19
B. Transfer of Any or All of a Policyholder’s or Agent’s Business to Another Insurer ........ 2-20
C. Transfer of an Insurer’s Entire Book to Another Insurer ............................................ 2-20
VI.
Reformation Due to Insufcient Premium or Rating Information ...........................................2-20
A. General Information .............................................................................................. 2-20
B. General Reformation Procedures ............................................................................ 2-21
C. Exception When Reforming a Policy Due to an Incorrect Geolocation
or Flood Zone ....................................................................................................... 2-24
3. How to Write
I.
Introduction ..................................................................................................................................... 3-1
A. Snapshot of the Risk Rating 2.0 Methodology: Equity in Action ................................ 3-1
B. Process for Writing New Business .......................................................................... 3-3
II.
General Rating Information ..........................................................................................................3-4
A. Policyholder and Mortgagee Information ................................................................. 3-4
1. Policyholder Information .................................................................................... 3-4
2. Mortgagee Information ..................................................................................... 3-4
B. Geographic Location Variables ............................................................................... 3-4
1. Building Location .............................................................................................. 3-4
a. Property Address ........................................................................................ 3-5
b. Geolocation ................................................................................................ 3-5
c. Multiple Buildings at the Same Address .......................................................3-6
2. Community Map Information and Flood Zone ...................................................... 3-6
3. Community Rating System (CRS) Discount ......................................................... 3-7
a. General Information ....................................................................................3-7
b. Policies Ineligible for CRS Discounts ............................................................ 3-7
c. CRS Classes and Discounts ........................................................................3-8
d. CRS Community Status Information ............................................................. 3-8
C. Structural Variables ............................................................................................... 3-9
1. Building Occupancy & Description ...................................................................... 3-9
a. Building Occupancy .....................................................................................3-9
b. Building Description .................................................................................... 3-12
c. Manufactured/Mobile Homes ...................................................................... 3-14
2. Construction Type ............................................................................................. 3-14
3. Foundation Type ............................................................................................... 3-15
a. Non-Elevated Building .................................................................................3-15
b. Elevated Building ........................................................................................3-17
c. Elevated Building with an Enclosure .............................................................3-19
i. Denition of an Enclosure ....................................................................... 3-19
ii. Enclosure Wall Types .............................................................................. 3-19
d. Crawlspace – Elevated and Non-Elevated .....................................................3-20
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL TOC • iii
Table of Contents
3. How to Write continued
4. First Floor Height .............................................................................................. 3-21
a. General Information ....................................................................................3-21
b. FEMA Determined First Floor Height .............................................................3-23
c. Elevation Certicate/Land Survey ................................................................3-23
d. Additional Information on Elevation Certicates or Land Surveys ....................3-25
i. Documentation required .........................................................................3-25
ii. Other Elevation Information ....................................................................3-26
iii. Troubleshooting .....................................................................................3-26
e. First Floor Height Used................................................................................3-26
5. Mitigation Discounts ......................................................................................... 3-27
a. Machinery and Equipment Above First Floor ..................................................3-27
b. Proper Flood Openings ................................................................................ 3-28
i. Proper Flood Openings Discount Requirements ........................................3-28
ii. Engineered Openings Certied by a Design Professional ........................... 3-29
iii. Engineered Openings Certied by the International Code Council
Evaluation Service ..................................................................................3-30
6. Floodproong ................................................................................................... 3-30
a. General Information ....................................................................................3-30
b. Application Form .........................................................................................3-30
c. Documentation Requirements for Non-Residential Floodproong ....................3-31
7. Replacement Cost Value ................................................................................... 3-32
a. Square Footage .......................................................................................... 3-32
b. Building Replacement Cost Value.................................................................3-33
i. Occupancy Type: Single-Family Home, Residential Manufactured/
Mobile Home, Residential Unit, and Two-to-Four Family Building ................3-33
ii. Occupancy Type: Other Residential Building, Residential Condominium
Building, Non-Residential Building, Non-Residential Manufactured/
Mobile Building, Non-Residential Unit ......................................................3-33
8. Claims History .................................................................................................. 3-34
a. Prior NFIP Claims ........................................................................................ 3-34
i. General Information ...............................................................................3-34
ii. Correcting or Updating NFIP Claims History .............................................. 3-35
b. Severe Repetitive Loss Property ..................................................................3-35
9. Other Building Factors ....................................................................................... 3-36
a. Date of Construction ................................................................................... 3-36
i. General Information ...............................................................................3-36
ii. Substantial Improvement Date ................................................................ 3-36
iii. Date of Construction for Manufactured/Mobile Homes and
Travel Trailers ........................................................................................3-37
iv. Building Under Construction ....................................................................3-37
b. Number of Detached Structures on Property ................................................ 3-38
c. Number of Elevators ...................................................................................3-38
d. Number of Floors in Building ........................................................................3-38
e. Floor of Unit ...............................................................................................3-38
f. Total Number of Units in the Building ...........................................................3-38
g. Rental Property .......................................................................................... 3-38
h. Building Over Water ....................................................................................3-38
i. Primary Residence Status ...........................................................................3-38
i. General Information ...............................................................................3-38
ii. Documentation of Primary Residence ......................................................3-39
iii. Primary Residence and Trusts ................................................................. 3-39
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL TOC • iv
Table of Contents
3. How to Write continued
D. Coverage and Deductibles ..................................................................................... 3-40
1. Maximum Coverage Limits ................................................................................ 3-40
2. Increased Cost of Compliance (ICC) Coverage .................................................... 3-41
3. Deductibles ...................................................................................................... 3-42
E. Statutory Discounts .............................................................................................. 3-44
1. Pre-FIRM Discount ............................................................................................ 3-44
a. Eligibility ....................................................................................................3-44
b. Lapse in Coverage ...................................................................................... 3-45
c. Application ................................................................................................. 3-45
2. Newly Mapped Discount .................................................................................... 3-46
a. Eligibility ....................................................................................................3-47
b. Documentation ...........................................................................................3-47
c. Lapse in Coverage ...................................................................................... 3-47
d. Application Form .........................................................................................3-48
3. Other Statutory Discounts ................................................................................. 3-49
4. New Policy After a Real Estate Transaction ......................................................... 3-49
F. Assessments, Fees, and Surcharges...................................................................... 3-50
1. Reserve Fund Assessment ................................................................................ 3-50
2. HFIAA Surcharge............................................................................................... 3-50
3. Federal Policy Fee ............................................................................................. 3-51
4. Probation Surcharge ......................................................................................... 3-52
G. Premium Considerations ........................................................................................ 3-52
III.
Condominium Rating Information ...............................................................................................3-52
A. Condominium Rating Scenarios.............................................................................. 3-52
1. Overview .......................................................................................................... 3-52
2. Condominium Association Coverage for Residential Condominium
Building (Scenario #1) ....................................................................................... 3-53
3. Residential Unit Owner Coverage in Residential Condominium
Building (Scenario #2) ....................................................................................... 3-58
a. General Information ....................................................................................3-58
b. Assessment Coverage ................................................................................3-61
4. Residential Unit Owner Coverage in Non-Residential Condominium
Building (Scenario #3) ....................................................................................... 3-62
5. Condominium Association Coverage for Non-Residential Condominium
Building (Scenario #4) ....................................................................................... 3-64
6. Non-Residential Unit Owner Coverage in Residential or Non-Residential
Condominium Building (Scenario #5).................................................................. 3-67
B. Applying the Condominium Rating Scenarios ........................................................... 3-70
IV.
Provisional Rating Information ..................................................................................................... 3 -74
A. General Information .............................................................................................. 3 -74
B. Eligibility ............................................................................................................... 3 -74
C. Rates ................................................................................................................... 3-75
D. Premium Adjustments ........................................................................................... 3-76
E. Notication ........................................................................................................... 3-76
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL TOC • v
Table of Contents
4. How to Endorse
I.
Endorsement Process ....................................................................................................................4-1
A. General Change Endorsement Form ....................................................................... 4-1
B. Signatures ............................................................................................................ 4-1
C. Non-Premium and Premium-Bearing Changes ......................................................... 4-1
1. Non-Premium Changes ..................................................................................... 4-1
a. Process for Submitting a Non-Premium Change. ...........................................4-2
2. Premium-Bearing Changes ................................................................................ 4-2
a. Process for Submitting a Premium Change ................................................... 4-2
b. Statutory Annual Increase Cap ....................................................................4-2
D. Refund ................................................................................................................. 4-3
1. Prior Term Refunds (PTRs) ................................................................................. 4-3
E. Insufcient Premium .............................................................................................. 4-3
II.
Coverage and Deductible Changes .............................................................................................. 4-4
A. Adding or Increasing Coverage ............................................................................... 4-4
1. Effective Dates for Endorsements Adding or Increasing Coverage ........................ 4-4
B. Reducing Coverage ................................................................................................ 4-5
1. Reduction in Building Coverage ......................................................................... 4-5
2. Reduction in Contents Coverage ........................................................................ 4-5
3. Effective Dates for Endorsements Reducing Coverage ........................................ 4-5
C. Removing Coverage ............................................................................................... 4-5
1. Duplicate Coverage ........................................................................................... 4-6
2. Condominium Coverage .................................................................................... 4-7
D. Changing Deductibles ............................................................................................ 4-7
1. Deductible Increases ........................................................................................ 4-7
2. Deductible Decreases ....................................................................................... 4-7
E. Coverage Changes During the Renewal Cycle .......................................................... 4-8
1. Adding or Increasing Coverage at Renewal ......................................................... 4-8
2. Reducing Coverage on a Future Renewal Effective Date ...................................... 4-8
III.
Other Premium-Bearing Changes ................................................................................................4-8
A. Rating Adjustment ................................................................................................. 4-8
B. Rating Correction .................................................................................................. 4-9
C. Adding an Elevation Certicate ............................................................................... 4-9
D. Community Information ......................................................................................... 4-10
1. Change in Program Status ................................................................................. 4-10
2. Change in Community Rating System (CRS) Status ............................................. 4-10
E. Construction Completed ........................................................................................ 4-10
F. Incorrect Policy Form ............................................................................................. 4-10
G. Property Address Corrections................................................................................. 4-11
H. Rate Category Change ........................................................................................... 4-11
I. Examples of Other Premium-Bearing Changes ......................................................... 4-12
IV.
Assignment of a Policy .................................................................................................................. 4-13
A. Assignment with Building Purchase ........................................................................ 4-14
B. Assignment without Building Purchase ................................................................... 4-14
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL TOC • vi
Table of Contents
5. How to Renew
I.
General Information ....................................................................................................................... 5-1
II.
Renewal Process ............................................................................................................................5-1
A. Starting the Renewal Process ................................................................................ 5-1
1. Renewal Notice ................................................................................................ 5-1
2. Amounts of Insurance on the Renewal Notice ..................................................... 5-2
3. Final Notice ...................................................................................................... 5-2
B. Renewal Notication Requirements ........................................................................ 5-2
C. Premium Payment ................................................................................................. 5-3
1. Invalid Payment ................................................................................................ 5-3
2. Insufcient Payment ......................................................................................... 5-4
D. Determine the Renewal Effective Date .................................................................... 5-4
III.
Additional Information ................................................................................................................... 5-4
A. Renewal by Application Form or Recertication Questionnaire .................................. 5-4
B. Nonrenewal .......................................................................................................... 5-5
C. Coverage Changes During the Renewal Cycle .......................................................... 5-5
1. Adding or Increasing Coverage at Renewal ......................................................... 5-5
2. Reducing Coverage on a Future Renewal Effective Date ...................................... 5-6
3. Other Premium-Bearing Endorsements at Renewal ............................................. 5-6
D. Transfer of Business at Renewal ............................................................................ 5-6
6. How to Cancel
I.
General Information ....................................................................................................................... 6-1
II.
Valid Cancellation Reason Codes ................................................................................................6-1
A. No Insurable Interest ............................................................................................. 6-2
B. Establish a Common Expiration Date ...................................................................... 6-4
C. Duplicate Coverage ............................................................................................... 6-5
D. Not Eligible for Coverage ........................................................................................ 6-7
E. Lender No Longer Requires Insurance .................................................................... 6-10
F. Invalid Payment or Fraud ........................................................................................ 6-10
G. Other Reason Codes ............................................................................................. 6-12
III.
Processing a Cancellation or Nullication Request ..................................................................6-14
A. Signatures ............................................................................................................ 6-14
1. Policyholder’s Signature .................................................................................... 6-14
2. Agent Signature ................................................................................................ 6-14
B. Premium Refunds .................................................................................................. 6-14
C. Cancellation Processing Outcomes ........................................................................ 6-15
Appendix A: Policy
Dwelling Form ........................................................................................................................................A-3
General Property Form .........................................................................................................................A-34
Residential Condominium Building Association Policy Form..........................................................A-62
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL TOC • vii
Table of Contents
Appendix B: Forms
I.
NFIP Flood Insurance Application Form ......................................................................................B-1
II.
NFIP Flood Insurance General Change Endorsement Form ..................................................... B-4
III.
NFIP Flood Insurance Cancellation/Nullication Request Form .............................................B-6
IV.
NFIP Residential Basement Floodproong Certicate .............................................................B-8
V.
NFIP Floodproong Certicate for Non-Residential Structures ...............................................B-12
VI.
NFIP Elevation Certicate and Instructions ................................................................................B-16
Appendix C: Quick Start Guide
I.
Agency Number/Agent Number ...................................................................................................C-1
II.
Property Address ............................................................................................................................ C-1
III.
Building Occupancy, Policy Form, and Coverage Amounts ......................................................C-1
IV.
Building Description ....................................................................................................................... C-2
V.
Foundation Type .............................................................................................................................C-2
VI.
Proper Flood Openings ..................................................................................................................C-3
VII.
First Floor Height Determination ..................................................................................................C-3
VIII.
Building Characteristics .................................................................................................................C-4
A. Building Under Construction ................................................................................... C-4
B. Date of Construction ............................................................................................. C-4
C. Has the Building Been Substantially Improved? ....................................................... C-4
D. Construction Type ................................................................................................. C-4
E. Is Building Properly Floodproofed? .......................................................................... C-5
F. Is the Building Eligible for the Machinery and Equipment Mitigation Discount? .......... C-5
G. Building Square Footage ........................................................................................ C-5
H. Number of Floors in Building .................................................................................. C-6
I. Floor of Unit .......................................................................................................... C-6
J. Total Number of Units in a Building ......................................................................... C-6
K. Building Replacement Cost (Including Foundation) ................................................... C-6
Appendix D: Flood Maps
I.
Flood Map Service Center ............................................................................................................. D-1
II.
Flood Hazard Maps ........................................................................................................................D-1
III.
Map Zones ....................................................................................................................................... D-2
A. Special Flood Hazard Areas ................................................................................... D-2
1. Zone A ............................................................................................................. D-2
2. Zone AE and Zones A1–A30 .............................................................................. D-3
3. Zone AH ........................................................................................................... D-3
4. Zone AO ........................................................................................................... D-3
5. Zone A99 ......................................................................................................... D-3
6. Zone AR ........................................................................................................... D-3
7. Zones AR/AE, AR/AH, AR/AO, AR/A1– A30, AR/A ................................................ D-3
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL TOC • viii
Table of Contents
Appendix D: Flood Maps continued
8. Zone V ............................................................................................................. D-3
9. Zone VE and Zones V1–V30 .............................................................................. D-3
B. Moderate or Minimal Hazard Areas ........................................................................ D-4
1. Zones B and X (Shaded) .................................................................................... D-4
2. Zones C and X (Unshaded) ................................................................................ D-4
3. Zone D ............................................................................................................. D-4
IV.
Locating a Property on a Map ......................................................................................................D-4
V.
Changing or Correcting a Flood Map by a Letter of Map Change (LOMC) .............................D-5
A. Letter of Map Amendment ..................................................................................... D-5
B. Letter of Map Revision........................................................................................... D-6
C. Physical Map Revision ........................................................................................... D-6
Appendix E: Coastal Barrier Resources System
I.
General Information ....................................................................................................................... E-1
II.
Determining Eligibility ....................................................................................................................E-1
A. Determine If Community Has a System Unit or OPA ................................................. E-1
B. Determine If the Property is Located in a System Unit or OPA .................................. E-2
1. Building Located in the CBRS Buffer Zone .......................................................... E-2
C. Determine Building Eligibility .................................................................................. E-2
D. Documentation of Eligibility .................................................................................... E-3
1. Buildings Not Located in a System Unit or OPA ................................................... E-3
2. Buildings Located in a System Unit or OPA ......................................................... E-4
a. Proof of building permit date, as evidenced by either: ...................................E-4
b. Proof of building construction date, as evidenced by a written statement
from the community building permit ofcial that: ..........................................E-4
c. Proof of building location in a System Unit or OPA: ....................................... E-4
3. Buildings Eligible Based on Use ......................................................................... E-4
Appendix F: Severe Repetitive Loss Properties
I.
General Information ....................................................................................................................... F-1
II.
New Business .................................................................................................................................F-1
III.
Notication Requirements for Transfer to SDF ..........................................................................F-1
IV.
Underwriting Requirements ..........................................................................................................F-2
V.
Process for Correcting or Updating a Property’s SRL Status ...................................................F-2
A. Required Documentation ....................................................................................... F-2
B. SDF Process After FEMA Determination .................................................................. F-3
VI.
Flood Mitigation Assistance (FMA) Program .............................................................................. F-3
Appendix G: Leased Federal Properties
I.
General Information ....................................................................................................................... G-1
II.
Requirements .................................................................................................................................G-1
III.
Correcting an LFP Designation ..................................................................................................... G-2
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL TOC • ix
Table of Contents
Appendix H: Claims
I.
Information for Policyholders After a Flood ...............................................................................H-1
II.
Claims Process ...............................................................................................................................H-1
A. Damage Estimate.................................................................................................. H-1
B. Claim Payment ...................................................................................................... H-2
III.
Disputed Claims .............................................................................................................................H-2
IV.
Appealing a Claim .......................................................................................................................... H-2
A. Filing an Appeal..................................................................................................... H-2
B. Appeals Process ................................................................................................... H-3
V.
Litigation .......................................................................................................................................... H-4
VI.
Increased Cost of Compliance (ICC) Claims ............................................................................... H-4
Appendix I: Policyholder Communications
I.
Underwriting-Related Policyholder Communications ................................................................ I-1
II.
Declarations Page and Summary of Coverage ..........................................................................I-3
A. Overview ............................................................................................................... I-3
B. Summary of Coverage ........................................................................................... I-3
C. Templates ............................................................................................................. I-4
1. Declarations Page Template (New Business or Renewal), Page 1 ......................... I-4
2. Declarations Page Template (New Business or Renewal), Page 2 ......................... I-5
3. Declarations Page Template (Endorsement), Page 1 ........................................... I-6
4. Declarations Page Template (Endorsement), Page 2 ........................................... I-7
D. Sample Documents ............................................................................................... I-8
1. Declarations Page Sample (New Business or Renewal), Page 1 ........................... I-8
2. Declarations Page Sample (New Business or Renewal), Page 2 ........................... I-9
3. Declarations Page Sample (Endorsement), Page 1.............................................. I-10
4. Declarations Page Sample (Endorsement), Page 2.............................................. I-11
E. Requirements ....................................................................................................... I-12
III.
Replacement Cost Value Update Notice .....................................................................................I-24
A. Overview ............................................................................................................... I-24
B. Sample Building Replacement Cost Value Notication ............................................. I-25
IV.
Severe Repetitive Loss Property Notice ...................................................................................... I-26
A. Overview ............................................................................................................... I-26
B. Sample Notications ............................................................................................. I-27
1. Policyholder SRL Notication, Page 1 ................................................................. I-27
2. Policyholder SRL Notication, Page 2 ................................................................. I-28
3. Agent SRL Notication, Page 1 .......................................................................... I-29
4. Agent SRL Notication, Page 2 .......................................................................... I-30
5. Lender SRL Notication, Page 1 ........................................................................ I-31
6. Lender SRL Notication, Page 2 ........................................................................ I-32
V.
FIRA Notice .....................................................................................................................................I-33
A. Overview ............................................................................................................... I-33
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL TOC • x
Table of Contents
Appendix I: Policyholder Communications continued
B. Sample Documents ............................................................................................... I-34
1. FIRA Introduction Letter .................................................................................... I-34
2. NFIP FIRA Property Claims History, Page 1 ......................................................... I-35
3. NFIP FIRA Property Claims History, Page 2 ......................................................... I-36
4. FIRA Acknowledgment Form, Page 1 .................................................................. I-37
5. FIRA Acknowledgment Form, Page 2 .................................................................. I-38
VI.
Leased Federal Property Notice ................................................................................................... I-39
A. Overview ............................................................................................................... I-39
B. Sample LFP Notications ....................................................................................... I-40
1. Policyholder LFP Notication .............................................................................. I-40
2. Agent LFP Notication ....................................................................................... I-41
3. Lender LFP Notication ..................................................................................... I-42
VII.
Provisional Rating Notice ..............................................................................................................I-43
A. Overview ............................................................................................................... I-43
B. Sample Documents ............................................................................................... I-43
1. Policyholder Provisional Rating Notication ......................................................... I-43
VIII.
Renewal Notice, Renewal Notice (This Is Not A Bill), and Final Notice ..................................I-44
A. Overview ............................................................................................................... I-44
B. Sample Notications (WYO Versions) ...................................................................... I-45
1. Renewal Notice (WYO Version), Page 1 .............................................................. I-45
2. Renewal Notice (WYO Version), Page 2 .............................................................. I-46
3. Renewal Notice (WYO Version), Page 3 .............................................................. I-47
4. Renewal Notice (This Is Not A Bill) (WYO Version), Page 1 ................................... I-48
5. Renewal Notice (This Is Not A Bill) (WYO Version), Page 2 ................................... I-49
6. Renewal Notice (This Is Not A Bill) (WYO Version), Page 3 ................................... I-50
7. Final Notice (WYO Version), Page 1 .................................................................... I-51
8. Final Notice (WYO Version), Page 2 .................................................................... I-52
9. Final Notice (WYO Version), Page 3 .................................................................... I-53
C. Sample Notications (NFIP Direct Versions) ............................................................ I-54
1. Renewal Notice (NFIP Direct Version), Page 1 ..................................................... I-54
2. Renewal Notice (NFIP Direct Version), Page 2 ..................................................... I-55
3. Renewal Notice (NFIP Direct Version), Page 3 ..................................................... I-56
4. Renewal Notice (This Is Not A Bill) (NFIP Direct Version), Page 1 .......................... I-57
5. Renewal Notice (This Is Not A Bill) (NFIP Direct Version), Page 2 .......................... I-58
6. Renewal Notice (This Is Not A Bill) (NFIP Direct Version), Page 3 .......................... I-59
7. Final Notice (NFIP Direct Version), Page 1........................................................... I-60
8. Final Notice (NFIP Direct Version), Page 2........................................................... I-61
9. Final Notice (NFIP Direct Version), Page 3........................................................... I-62
D. Requirements ....................................................................................................... I-63
IX.
Cancellation Verication Letter ....................................................................................................I-73
A. Overview ............................................................................................................... I-73
B. Sample Document ................................................................................................ I-73
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL TOC • xi
Table of Contents
Appendix J: Sample Scenarios
I.
Sample Scenarios ..........................................................................................................................J-1
Scenario 1. Post-FIRM, Single-Family Home with Basement .......................................... J-2
Scenario 2. Pre-FIRM, Single-Family Home, Elevated .................................................. J-3
Scenario 3. Post-FIRM, Single-Family Home, Elevated ................................................. J-4
Scenario 4. Post-FIRM, Residential Condo Unit Within a Residential
Condominium Building, Elevated ................................................................................. J-5
Scenario 5. Post-FIRM, Residential Condominium Building Association
Policy, Non-Elevated .................................................................................................. J-6
Appendix K: Denitions and Acronyms
I.
Denitions .......................................................................................................................................K-1
II.
Acronyms ......................................................................................................................................... K-12
Tables
1. Introduction
Table 1. Major NFIP Reform Legislation ...........................................................................1-2
Table 2. Organization of the NFIP Flood Insurance Manual ................................................1-4
Table 3. NFIP Topics and Contact Information .................................................................1-7
2. Before You Start
Table 1. Standard Flood Insurance Policy Forms ..............................................................2-1
Table 2. Where the NFIP Offers Insurance .......................................................................2-5
Table 3. Where the NFIP Does Not Offer Insurance ..........................................................2-5
Table 4. Buildings the NFIP Insures ................................................................................2-7
Table 5. Buildings the NFIP Does Not Insure ...................................................................2-11
Table 6. Contents Eligibility Examples .............................................................................2-11
Table 7. NFIP Coverage Exclusions and Limitations ..........................................................2-12
Table 8. Effective Date with a 30-Day Waiting Period .......................................................2-14
Table 9. Effective Date When Eligible for the Map Revision Exception ...............................2-16
Table 10. Effective Date When Potentially Eligible for the Loan Exception ..........................2-17
Table 11. General Procedures to Reform a Policy ............................................................2-22
Table 12. Reformation Timeframes and Effective Dates ...................................................2-23
Table 13. How to Handle a Claim Involving Policy Reformation ..........................................2-24
Table 14. Reformation Timeframes and Effective Dates When the Geolocation
or Flood Zone Is Incorrect ...............................................................................2-25
Table 15. How to Handle a Claim Involving Policy Reformation When the Geolocation
or Flood Zone is Incorrect ...............................................................................2-25
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL TOC • xii
Table of Contents
3. How to Write
Table 1. NFIP Rating Information ....................................................................................3-2
Table 2. Requirements for Latitude and Longitude Coordinates ........................................3-5
Table 3. CRS Premium Discounts By Class .....................................................................3-8
Table 4. Building Occupancy: Building or Contents Coverage for a Building or Units ...........3-9
Table 5. Building Occupancy: Contents Coverage on a Separate Policy ..............................3-12
Table 6. Building Description Options .............................................................................3-13
Table 7. Construction Type Determination .......................................................................3-14
Table 8. Foundation Type – Slab on Grade (Non-Elevated) ................................................3-16
Table 9. Foundation Type – Basement (Non-Elevated) ......................................................3-17
Table 10. Foundation Type – Elevated Without Enclosure on Posts, Piles, or Piers .............3-18
Table 11. Foundation Type – Elevated With Enclosure on Posts, Piles, or Piers
(With an Enclosure Below the Elevated Floor) ...................................................3-19
Table 12. Foundation Type – Elevated With Enclosure Not on Posts, Piles, or Piers
(Solid Foundation Walls) .................................................................................3-20
Table 13. Foundation Type – Crawlspace (Elevated or Non-Elevated
Subgrade Crawlspace) ....................................................................................3-20
Table 14. First Floor Height Measurement by Foundation Type ..........................................3-21
Table 15. Completing the Application Form Using Section C
of the Elevation Certicate (EC) .......................................................................3-23
Table 16. Completing the Application Form Using Section E
of the Elevation Certicate (EC) .......................................................................3-24
Table 17. M&E Location for Discount Eligibility .................................................................3-27
Table 18. Eligibility for a Floodproong Discount ..............................................................3-30
Table 19. Square Footage Calculation .............................................................................3-32
Table 20. Applying the Prior NFIP Claims Rating Factor.....................................................3-34
Table 21. Date of Construction – Manufactured/Mobile Homes and Travel Trailers ............3-37
Table 22. Maximum Coverage Limits in the Regular Program ............................................3-40
Table 23. Maximum Coverage Limits in the Emergency Program .......................................3-41
Table 24. Deductible Options: Single-Family Home, Residential
Manufactured/Mobile Home, Residential Unit, Two-to-Four Family Building .........3-43
Table 25. Deductible Options: Other Residential Building, Non-Residential Building,
Non-Residential Manufactured/Mobile Building, Non-Residential Unit ................3-43
Table 26. Deductible Options: Residential Condominium Building .....................................3-43
Table 27. Impact of a Lapse on Pre-FIRM Discount Eligibility ............................................3-45
Table 28. Application Response on Lapse and Pre-FIRM Discount Eligibility ......................3-46
Table 29. Impact of a Lapse on Newly Mapped Discount Eligibility ....................................3-48
Table 30. Application Response on Newly Mapped Discount Eligibility ............................... 3-48
Table 31. Reserve Fund Assessment ..............................................................................3-50
Table 32. HFIAA Surcharge ............................................................................................3-51
Table 33. Federal Policy Fee ..........................................................................................3-51
Table 34. Probation Surcharge .......................................................................................3-52
Table 35. Methods for Insuring Condominiums ................................................................3-52
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL TOC • xiii
Table of Contents
3. How to Write continued
Table 36. Condominium Association Coverage for Residential Condominium
Association Building (Scenario #1) ..................................................................3-53
Table 37. Residential Unit Owner Coverage in Residential Condominium
Building (Scenario #2) ....................................................................................3-58
Table 38. Assessment Coverage After a Loss .................................................................3-61
Table 39. Residential Unit Owner Coverage in Non-Residential Condominium
Building (Scenario #3) ....................................................................................3-62
Table 40. Condominium Association Coverage for Non-Residential Condominium
Building (Scenario #4) ....................................................................................3-64
Table 41. Non-Residential Unit Owner Coverage in Residential or Non-Residential
Condominium (Scenario #5) ............................................................................3-67
Table 42. Single-Family Residential Building or Individual Residential Townhouse
or Rowhouse in a Condominium Complex .........................................................3-70
Table 43. Residential Condominium Building with 2-4 Units, or a Unit in Such a
Building (Non-Townhouse/Rowhouse) ...............................................................3-71
Table 44. Residential Condominium Building with Five or More Units, or a Unit
in Such a Building (Non-Townhouse/Rowhouse) ................................................3-72
Table 45. Non-Residential Condominium Building, or Unit in Such a Building .....................3-72
Table 46. Provisional Rates for all Policy Types ................................................................3-75
Table 47. Calculate Premium for a Provisional-Rated Policy ...............................................3-75
4. How to Endorse
Table 1. Procedures if a Premium-Bearing Endorsement Results in
Insufcient Premium.......................................................................................4-3
Table 2. Effective Dates for Endorsements Removing Coverage ........................................4-6
Table 3. Endorsement Effective Date When Applying a Rating Adjustment .........................4-9
Table 4. Endorsement Effective Date When Applying a Rating Correction ..........................4-9
Table 5. Endorsement Effective Date When Using an EC ..................................................4-10
Table 6. Endorsement Effective Date for a Rate Category Change.....................................4-12
Table 7. Examples of Other Premium-Bearing Endorsements ............................................4-12
5. How to Renew
Table 1. General Renewal Information ............................................................................5-1
Table 2. Renewal Notication Requirements ....................................................................5-2
Table 3. Premium Payments ...........................................................................................5-3
Table 4. Determine the Renewal Effective Date ...............................................................5-4
6. How to Cancel
Table 1. Valid Cancellation Reason Codes ......................................................................6-1
Reason Code 01. Building sold, removed, or destroyed ...................................................6-2
Reason Code 02. Contents sold, removed, or destroyed ..................................................6-3
Reason Code 07. Property closing did not occur ..............................................................6-4
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL TOC • xiv
Table of Contents
6. How to Cancel continued
Reason Code 03. Policy canceled and rewritten to establish a common expiration
date with other insurance coverage for the same building ................................6-4
Reason Code 04. Duplicate NFIP policies .......................................................................6-5
Reason Code 10. Condominium unit or association policy converting to RCBAP.................6-6
Reason Code 26. Duplicate policy from source other than NFIP ........................................6-7
Reason Code 06. Property not eligible for coverage .........................................................6-7
Reason Code 27. Property becomes ineligible for coverage during policy term ...................6-8
Reason Code 29. Building physically altered and no longer eligible for NFIP coverage ........6-9
Reason Code 28. Insurance no longer required by lender .................................................6-10
Reason Code 05. Invalid payment ..................................................................................6-10
Reason Code 23. Fraud or Misrepresentation .................................................................6-11
Reason Code 30. Insufcient premium to retain coverage ................................................6-11
Reason Code 13. Nullication prior to policy effective date ..............................................6-12
Reason Code 20. SRL written with incorrect insurer ........................................................6-13
Reason Code 21. Continuous lake ooding or closed basin lakes .....................................6-13
Reason Code 22. Cancel and rewrite due to administrative error ......................................6-13
Appendix C: Quick Start Guide
Table 1. Building Occupancy, Policy Form, and Coverage Amounts ....................................C-1
Appendix G: Leased Federal Properties
Table 1. Requirements for LFPs......................................................................................G-1
Appendix I: Policyholder Communications
Table 1. Underwriting Related Policyholder Communication .............................................. I-1
Table 2. Declarations Page Requirements ....................................................................... I-12
Table 3. Renewal Notice, Renewal Notice (This Is Not A Bill), and Final Notice
Requirements ................................................................................................ I-63
Figures
1. Introduction
Figure 1. NFIP Partners ..................................................................................................1-2
Figure 2. How to Seek NFIP Technical Assistance ............................................................1-6
3. How to Write
Figure 1. Overview of Risk Rating 2.0 Data Sources and Rating Factors ............................3-1
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL TOC • xv
Table of Contents
Appendix A: Policy
Dwelling Form ...............................................................................................................A-3
General Property Form ..................................................................................................A-34
Residential Condominium Building Association Policy Form ..............................................A-62
Appendix B: Forms
NFIP Flood Insurance Application ...................................................................................B-1
NFIP Flood Insurance General Change Endorsement ........................................................B-4
NFIP Flood Insurance Cancellation/Nullication Request Form .........................................B-6
NFIP Residential Basement Floodproong Certicate .......................................................B-8
NFIP Floodproong Certicate for Non-Residential Structures ...........................................B-12
NFIP Elevation Certicate and Instructions ......................................................................B-16
Appendix D: Flood Maps
Figure 1. Annotated Flood Insurance Rate Map (FIRM) .....................................................D-7
This page is intentionally left blank.
1. Introduction
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 1 • 1
I. Purpose and Audience
The National Flood Insurance Program (NFIP) Flood Insurance Manual provides NFIP
underwriting policies and processes to enable effective and consistent program
implementation. The primary audience of the manual is NFIP agents and insurers. It covers
every aspect of selling and servicing NFIP flood insurance policies.
II. NFIP Program and Operational Model
A. Program Overview
Flooding has long been the nation’s most costly natural disaster. In the face of mounting
flood losses and escalating disaster relief costs to the general taxpayers, Congress enacted
the National Flood Insurance Act of 1968.
The NFIP is a federal program enabling property owners in participating communities
to purchase insurance protection against losses from flooding. The Federal Emergency
Management Agency (FEMA), which administers the NFIP, makes federal flood insurance
available to residents in local communities that adopt and enforce floodplain management
ordinances intended to reduce future flood damage. FEMA also provides certain properties
with discounted premiums to encourage community and property owner participation.
B. NFIP Operational Model
Today, the NFIP has approximately five million policyholders in more than 22,000 participating
communities across the nation. Policyholders purchase NFIP flood insurance through
licensed insurance agents who write with participating private insurance companies or
directly with the NFIP through its servicing agent.
Under the Write Your Own (WYO) Program, private insurance companies (known as WYO
companies) enter into an agreement with FEMA to sell NFIP policies next to their own
insurance lines and adjust and pay claims arising under the NFIP policies. WYO companies
are responsible for all aspects of servicing the policies they sell, including issuing, endorsing,
underwriting, renewing, and canceling policies. WYO companies may withhold from written
premiums administrative and operating expenses for selling and servicing NFIP policies. WYO
companies must align their flood business with their normal business practices for their
other insurance lines, subject to applicable legal and administrative requirements.
In addition to the WYO Program, FEMA directly sells and services NFIP policies through a
contracted direct servicing agent, known as the NFIP Direct. Any prospective policyholder may
seek coverage through NFIP Direct. NFIP Direct is also the sole entity servicing Group Flood
Insurance Policies (GFIPs) and selling and servicing NFIP policies insuring buildings that have
experienced severe repetitive losses.
Whether written with a WYO company or the NFIP Direct, all NFIP policies (with the exception
of GFIPs) are subject to the same policies, rating methodology, and processes stated in the
NFIP Flood Insurance Manual.
More broadly, the NFIP involves effective partnership between the Federal Government; the
property and casualty insurance industry; state, local, tribal, and territorial governments;
lending institutions; and property owners. Figure 1 below shows how each partner helps to
implement the program.
Note: As used in the NFIP Flood Insurance Manual, the term FEMA typically includes the
agency and its contractors.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 1 • 2
1. Introduction
Figure 1. NFIP Partners
C. Legislative Reforms
In the more than 50 years since passage of the National Flood Insurance Act of 1968,
Congress has enacted legislation seeking to improve the NFIP, as summarized in Table 1.
Of special note is the Flood Disaster Protection Act of 1973, which mandated the purchase
of flood insurance for certain properties in high flood-risk areas of NFIP-participating
communities. This mandatory purchase requirement expanded the overall number of insured
properties, including those that qualified for discounted premiums.
Table 1. Major NFIP Reform Legislation
ACT PROVISIONS
Flood Disaster
Protection Act of
1973 (FDPA)
Established the ood insurance mandatory purchase requirement:
• Prohibited federally backed lenders from making loans secured by buildings
located in a Special Flood Hazard Area (SFHA), unless the building is covered by
flood insurance.
• Prohibited federal assistance for the acquisition or construction of structures
located in an SFHA, unless the community is participating in the NFIP (unless the
assistance is related to disaster assistance provided during a non-flood event).
• Prohibited federal assistance for the acquisition or construction of a structure
located in an SFHA unless the structure is covered by flood insurance.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 1 • 3
1. Introduction
Table 1. Major NFIP Reform Legislation continued
ACT PROVISIONS
National Flood
Insurance Reform
Act of 1994
1
• Expanded and strengthened the FDPA’s mandatory purchase requirement.
• Required FEMA to offer insurance covering the cost of complying with state
and local floodplain management ordinances, referred to as Increased Cost of
Compliance (ICC) coverage.
• Established a grant program to fund activities designed to reduce the risk of
flood damage to structures covered by an NFIP policy (referred to as the Flood
Mitigation Assistance (FMA)) Program.
• Required a mandatory 30-day waiting period before a new NFIP policy
becomes effective.
Bunning-Bereuter-
Blumenauer Flood
Insurance Reform
Act of 2004
2
• Required FEMA to create a process to enable policyholders to appeal
claims decisions.
• Required FEMA to provide enhanced disclosure to policyholders explaining
policy coverages and other terms.
Biggert-Waters
Flood Insurance
Reform Act of
2012 (BW-12)
3
• Required FEMA to phase out premium discounts on an accelerated time frame.
• Required establishment of a National Flood Insurance Reserve Fund to be
available to pay claims, repay debt owed to the U.S. Treasury, and meet the future
obligations of the NFIP.
• Increased and adjusted the annual premium increase caps.
Homeowner
Flood Insurance
Affordability Act of
2014 (HFIAA)
4
• Repealed and limited many premium increases required by BW-12.
• Imposed a surcharge based on occupancy and primary residence status (referred
to as the HFIAA surcharge).
• With limited exceptions, reduced the cap on annual increases for flood insurance
premiums to 18 percent.
• Authorized FEMA to secure reinsurance for the NFIP from the traditional
reinsurance and capital markets.
III. Organization of the Document
The NFIP Flood Insurance Manual is divided into six main sections and several appendices,
as shown in Table 2. Table 2 provides the overall organization of the NFIP Flood Insurance
Manual and briefly describes the content in each section.
1. National Flood Insurance Reform Act of 1994, Pub. L. No. 103-325, Title V, 108 Stat. 2255; 42 U.S.C.
4001 et seq.
2. Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004, Pub. L. No. 108-264, 118 Stat. 712;
42 U.S.C. 4001 et seq.
3. Biggert-Waters Flood Insurance Reform Act of 2012, Pub. L. No. 112-141, Div. F, Title II, Subtitle A, 126
Stat. 916; 42 U.S.C. 4001 et seq.
4. Homeowner Flood Insurance Affordability Act of 2014, Pub. L. No. 113-89, 128 Stat. 1020; 42 U.S.C.
4001 et seq.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 1 • 4
1. Introduction
Table 2. Organization of the NFIP Flood Insurance Manual
TITLE DESCRIPTION HIGH-LEVEL CONTENT
Section 1:
Introduction
Overview of the NFIP, its
operational model, and resources
for agents, insurers, and other
stakeholders
I. Purpose and Audience
II. NFIP Program and Operational Model
III. Document Organization
IV. NFIP Resources
Section 2:
Before You Start
Information needed before
writing a NFIP ood insurance
policy
I. Policy Forms
II. Eligibility for NFIP Coverage
III. Effective Dates for New Policies and
Endorsements
IV. Administrative Topics
V. Assignment and Transfer of Business
VI. Reformation Due to Insufcient Premium or
Rating Information
Section 3:
How to Write
Description of the information
needed to rate a policy and
applicable rating rules
I. Introduction
II. General Rating Information
III. Condominium Rating Information
IV. Provisional Rating Information
Section 4:
How to Endorse
Guidance on changing or
correcting information on an
existing NFIP ood insurance
policy
I. Endorsement Process
II. Coverage and Deductible Changes
III. Other Premium-Bearing Changes
IV. Assignment of a Policy
Section 5:
How to Renew
Guidance and information on how
to renew an existing NFIP ood
insurance policy
I. General Information
II. Renewal Process
III. Additional Information
Section 6:
How to Cancel
Guidance on valid cancellation/
nullication reason codes and
associated effective date and
refund rules
I. General Information
II. Valid Cancellation Reason Codes
III. Processing a Cancellation or Nullication
Request
Appendix A:
Standard Flood
Insurance Policy
The three Standard Flood
Insurance Policy (SFIP) forms
stating denitions, coverages,
limitations, and exclusions for
NFIP ood insurance policies,
including terms and conditions
unique to the NFIP.
I. Dwelling Form
II. General Property Form
III. Residential Condominium Building
Association Policy Form
Appendix B:
Forms
Forms that collect the
information needed to rate a
NFIP ood insurance policy
and process certain policy
transactions
I. NFIP Flood Insurance Application Form
II. NFIP Flood Insurance General Change
Endorsement Form
III. NFIP Flood Insurance Cancellation/
Nullication Request
IV. NFIP Residential Basement
Floodproong Certicate
V. NFIP Floodproong Certicate for
Non-Residential Structures
VI. NFIP Elevation Certicate and Instructions
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 1 • 5
1. Introduction
Table 2. Organization of the NFIP Flood Insurance Manual continued
TITLE DESCRIPTION HIGH-LEVEL CONTENT
Appendix C:
Quick Start Guide
to Writing a Policy
A step-by-step reference guide
on how to write a new NFIP ood
insurance policy using the NFIP
Flood Insurance Application Form
I. Agency Number/Agent Number
II. Property Address
III. Building Occupancy, Policy Form, and
Coverage Amounts
IV. Building Description
V. Foundation Type
VI. Proper Flood Openings
VII. First Floor Height Determination
VIII. Building Characteristics
Appendix D:
Flood Maps
General information about NFIP
ood maps and ood zones
I. Flood Map Service Center
II. Flood Hazard Maps
III. Map Zones
IV. Locating a Property on a Map
V. Changing or Correcting a Flood Map by a
Letter of Map Change (LOMC)
Appendix E:
Coastal Barrier
Resources System
Guidance on eligibility for NFIP
coverage under the Coastal
Barrier Resources System
I. General Information
II. Determining Eligibility
Appendix F:
Severe Repetitive
Loss Properties
Information on procedures unique
to servicing policies for Severe
Repetitive Loss (SRL) properties
I. General Information
II. New Business
III. Notication Requirements
IV. Underwriting Requirements
V. Process for Correcting or Updating a
Property’s SRL Status
VI. Flood Mitigation Assistance (FMA) Program
Appendix G:
Leased Federal
Properties
Information on procedures unique
to writing and servicing policies
for leased federal properties
I. General Information
II. Requirements
III. Correcting an LFP Designation
Appendix H:
Claims
General information on claims
processing
I. Information for Policyholders after a Flood
II. Claim Process
III. Disputed Claims
IV. Appealing a Claim
V. Litigation
VI. Increased Cost of Compliance
(ICC) Claims
Appendix I:
Policyholder
Communications
Sample documents referenced in
various Flood Insurance Manual
sections and appendices,
intended to guide how NFIP
insurers communicate with
policyholders around specic
topics or types of transactions
I. Underwriting-Related Policyholder
Communications
II. Declarations Page
III. Replacement Cost Value Update Notice
IV. Severe Repetitive Loss Property Notice
V. FIRA Notice
VI. Leased Federal Property Notice
VII. Provisional Rating Notice
VIII. Renewal Notice, Renewal Notice (This Is
Not A Bill), and Final Notice
IX. Cancellation Verication Letter
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 1 • 6
1. Introduction
TITLE DESCRIPTION HIGH-LEVEL CONTENT
Appendix J:
Sample Scenarios
Provides application scenarios for
NFIP insurance
I. Sample Scenarios
Appendix K:
Definitions and
Acronyms
Denitions of specic NFIP terms
and frequently used acronyms
I. Denitions
II. Acronyms
IV. NFIP Resources
A. Policy-Specific Inquiries
Questions and requests for technical assistance regarding specific flood insurance policies
and NFIP rules should generally follow the flow shown in Figure 2 below.
Figure 2: How to Seek NFIP Technical Assistance
Policyholders who have questions about their policy should first contact their flood insurance
agent. If the agent is unable to answer the question, they may direct it to the NFIP insurer
(either a WYO company or the NFIP Direct) that issued the policy. The insurer may elevate
complex questions to FEMA as needed.
B. General Assistance and Inquiries
For general assistance and inquiries (or for policy-specific issues after speaking with the
agent or insurer), contact the FEMA entities noted below:
• The FEMA Mapping and Insurance eXchange (FMIX) can answer general inquiries
about mapping and flood insurance; call 1-877-336-2627 (1-877-FEMA-MAP) or
visit https://www.floodmaps.fema.gov/fhm/fmx_main.html to access the chat and
email functions.
• Contact FEMA’s Ask the Expert at floodsmar[email protected]s.gov if you have questions
about the NFIP, your flood insurance, or the flood risk your property may face.
If you need additional assistance regarding a flood insurance policy after using the above
resources and those listed in Table 3 below, contact FEMA’s Office of the Flood Insurance
Advocate (OFIA). The OFIA advocates for the fair treatment of policyholders and property
owners by providing education and guidance on all aspects of the NFIP, identifying trends
affecting the public, and making recommendations for program improvements to FEMA
leadership. Contact the OFIA by visiting http://www.fema.gov/flood-insurance-advocate and
clicking on the “Ask the Advocate” button.
C. NFIP Topics and Contact Information
Table 3 provides links and contact information for various topics of interest to
NFIP stakeholders.
Table 2. Organization of the NFIP Flood Insurance Manual continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 1 • 7
1. Introduction
Table 3. NFIP Topics and Contact Information
Topic Mail and Website Address Telephone
Agent Marketing, Selling,
Servicing Information
https://agents.oodsmart.gov N/A
Claims & Underwriting
Forms
https://www.fema.gov/ood-insurance/
nd-form
N/A
Coastal Barrier Resources
System (CBRS)
https://www.fws.gov/CBRA/ N/A
Community Status Book
https://www.fema.gov/ood-insurance/
work-with-np/community-status-book
N/A
FEMA Guidance
https://www.fema.gov/about/reports-and-
data/guidance
N/A
Flood Maps and Related
Products
FEMA Flood Map Service Center
https://msc.fema.gov/portal/home
N/A
Flood Zone Determination
Companies
https://npservices.oodsmart.gov/ood-
zone-determination-companies
N/A
General Information for
Agents & Consumers
https://www.oodsmart.gov/ N/A
General Mapping and Flood
Insurance Inquiries
FEMA Mapping and Insurance
eXchange (FMIX)
https://www.oodmaps.fema.gov/fhm/
fmx_main.html
FEMA-FMIX@fema.dhs.gov
Phone:
1-877-336 -2627
(1-877-FEMA-MAP)
NFIP Regional Support
Offices
https://npservices.oodsmart.gov/NFIP-
Regional-Support-Ofces
See link
Outreach Publications and
Resources
https://www.fema.gov/ood-insurance/
outreach-resources
N/A
Public Awareness Materials
and Order Form
https://www.fema.gov/sites/default/
les/2020-10/fema_np-publications-order-
form_sept2020.pdf
Phone:
1-800-480-2520
Training https://npservices.oodsmart.gov/training N/A
WYO Companies
https://npservices.oodsmart.gov/wyo-
program-list
N/A
This page is intentionally left blank.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 1
2. Before You Start
This section provides important information that agents and insurers must be familiar with
before writing an NFIP flood insurance policy. The section covers eligibility rules, when
coverage becomes effective, and other information relevant to delivery and maintenance
of policies. Application of this knowledge will reduce or eliminate issues that may arise at
various stages of the policy lifecycle.
I. Policy Forms
A. General Information
NFIP insurers may only use the Standard Flood Insurance Policy (SFIP) established by FEMA
in federal regulation to sell and service NFIP flood insurance policies. The SFIP defines the
coverages, limitations, and exclusions for NFIP flood insurance policies and includes terms
and conditions that are unique to the NFIP. The SFIP outlines flood insurance coverage for
a one-year policy term under three different forms: the Dwelling Form, the General Property
Form, and the Residential Condominium Building Association Policy (RCBAP) Form (see
Appendix A: Policy).
FEMA updated the Standard Flood Insurance Policy Forms in conformance with the
requirements stipulated in the final rule FEMA published in July 2020 “Conforming Changes
To Reflect the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) and the
Homeowners Flood Insurance Affordability Act of 2014 (HFIAA), and Additional Clarifications
for Plain Language,” available on the Federal Register.
Note: There are regulatory changes in the rule and the majority of the changes are
clarifications and changes that codify existing practice, policy or processes and improve
readability and uniformity.
The effective date of the SFIPs is October 1, 2021.
Table 1 shows when to use the three SFIP forms to insure a variety of residential and non-
residential building and contents risks. See the Building Occupancy heading in Section 3:
How to Write for definitions of the building occupancies referenced here. See the Maximum
Coverage Limits heading in Section 3: How to Write for information on the building and
contents coverage available for different building occupancies under these SFIP forms.
Table 1. Standard Flood Insurance Policy Forms
SFIP FORM ELIGIBLE POLICYHOLDERS ELIGIBLE BUILDING OCCUPANCIES
Dwelling
Form
Available to the following types of
policyholders:
• Homeowner
• Unit owner
• Building owner
• Residential renter
Note: In some cases a condominium
association may purchase a Dwelling
Form policy for a Residential Unit on
behalf of the unit owner, who is the
policyholder.
In a Regular Program or Emergency Program
community provides building and/or contents
coverage for:
• Single-Family Home
• Residential Manufactured/Mobile Home
• Residential Unit
• Two-to-Four Family Building
Note: The Dwelling Form also covers residential
contents in a non-residential building insured under
a separate policy from the building.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 2
2. Before You Start
Table 1. Standard Flood Insurance Policy Forms continued
SFIP FORM ELIGIBLE POLICYHOLDERS ELIGIBLE BUILDING OCCUPANCIES
General
Property
Form
Available to the following types of
policyholders:
• Building owner
• Unit owner
• Building or unit lessee
In a Regular Program or Emergency Program
community:
• Other Residential Building
• Non-Residential Building
• Non-Residential Manufactured/Mobile Building
• Non-Residential Unit
Note: The General Property Form also covers non-
residential contents in a residential building insured
under a separate policy from the building.
RCBAP
Issued to a residential condominium
association on behalf of the
association and unit owners
In a Regular Program community only:
• Residential Condominium Building
See the Condominium Rating Information heading
in Section 3: How to Write for more information
on RCBAP eligibility and what policy form to use if
ineligible.
B. Insurable Interest
To be eligible for an NFIP policy, the individual or entity (a property owner, tenant, or
mortgagee) must have an insurable interest in the subject property. An insurable interest
is an interest in property to the extent that the owner of the interest derives a benefit
from the preservation of the property and will suffer a loss from its destruction. Principal
examples are:
• Mortgagee Interest – A mortgagee has an insurable interest in the mortgaged
property, and therefore, can obtain an NFIP insurance policy.
• Shareholder Interest – A shareholder with an insurable interest in a non-residential
property may obtain NFIP insurance to protect its financial interest in the property
from loss.
• Limited Liability Corporation – An individual listed as an owner of an LLC that owns
a residential building, and who resides there, may obtain NFIP insurance to protect
their financial interest in the property from loss.
• Interest in Estate – An individual or entity with a financial interest in an estate holding
insurable property may obtain NFIP insurance to protect that interest from loss.
• Rent-to-Own Agreement – If a tenant has sufficient interest in the property under
a rent-to-own agreement, then the landlord and owner and the tenant both have
an insurable interest. Each of them may be named insureds
1
under the flood
insurance policy.
• Lease Requirement to Purchase Building Coverage – If a lease agreement requires
a tenant to purchase building coverage, the building owner must be named on the
policy but the tenant may also be named on the policy (although they do not have an
insurable interest themselves). Coverage for contents owned by the tenant must be
1. “Policyholder” refers specifically to the individual or business named in the policy itself, whereas “insured”
refers to the policyholder as well as anyone who submits payment on behalf of the policyholder and who
has the right to a claim payment under the policy (for example, the mortgagee). The Flood Insurance Manual
uses each term when appropriate to the specific context.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 3
2. Before You Start
written on a separate policy in the name of the tenant only. Tenants may not purchase
building coverage if the owner or another party has purchased NFIP coverage on the
same building, except as noted under the Duplicate Policies heading below.
Note: NFIP rules disallowing duplicate coverage apply. See the Duplicate Policies heading in
this section.
Contents Coverage for Tenants
Under the Dwelling Form and General Property Form, tenants may purchase contents coverage,
which includes coverage for building improvements and betterments. The maximum amount
payable for improvements and betterments in the building occupied by the policyholder is 10
percent of the contents coverage amount shown on the declarations page. Improvements and
betterments include fixtures, alterations, installations, and additions that become part of the
tenant-occupied building, if acquired or made solely at the tenant’s expense. Use of this option
does not provide an additional amount of insurance over the amount of contents coverage
shown on the declarations page. Coverage for contents solely owned by the tenant must be on
a separate policy in the name of the tenant only.
Complex questions of insurable interest can arise involving mixed-use buildings with
multiple forms of ownership. The NFIP can cover such a building under either a single policy
or multiple policies, depending in part on whether a single SFIP form or multiple forms
apply. If writing a single policy, the insurer must list all building owners as named insureds
on the policy. If writing multiple policies for buildings at the same location, the insurer is
responsible for maintaining detailed information describing the ownership and insurable
interest that pertains to each policy. This prevents issues of duplicate coverage or claim
payments above the statutory limits.
C. Duplicate Policies
Only one policy may be effective for the same named or different named policyholder for
the same building with building coverage. If an insurer determines that the policyholder(s)
has a duplicate policy, the insurer must provide written notice to the policyholder(s) of
duplicate coverage. The notice must advise the policyholder(s) of the following:
• In general, the policy with the earlier effective date will continue (see specific
exceptions under the Duplicate Coverage heading in Section 6: How to Cancel).
2
The insured may increase coverage up to the coverage limits of the policy with a
later effective date. The endorsement effective date for increased coverage is the
effective date of the later policy.
• If both policies have the same effective date, the policyholder may choose which
policy will remain in effect.
There are two exceptions allowing duplicate building policies on a single building.
• Residential Condominium Building. The insurer may issue a Dwelling Form policy with
building coverage to a residential condominium unit owner in a residential building.
If the building is covered by an RCBAP, the combined building coverage between
the Dwelling Form policy and the RCBAP cannot exceed $250,000 for the unit.
Policyholders may not claim damaged items under more than one policy. The NFIP
will only pay for damaged items under one policy.
2. 44 CFR § 62.5(e)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 4
2. Before You Start
• Mixed Use Buildings with Multiple Forms of Ownership. When writing multiple policies
for buildings at the same location, the insurer should maintain detailed information
describing the ownership and insurable interest that pertains to each policy. This
prevents issues of duplicate coverage or claim payments above the statutory limits.
If duplicate coverage occurs, see Section 4: How to Endorse and Section 6: How to Cancel
for additional information.
D. Group Flood Insurance Policy
A Group Flood Insurance Policy (GFIP) is a policy covering all individuals named by a State
as recipients under Section 408 of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act
3
of an Individuals and Households Program award for flood damage as
a result of a major disaster declaration by the President. The amount of coverage is
equivalent to the maximum grant amount established under Section 408. The term of
the GFIP is for 36 months and begins 60 days after the date of the presidential disaster
declaration. Coverage for individual grantees begins on the thirtieth day after the NFIP
receives the required data for individual grantees and their premium payments. A GFIP
recipient has a legal requirement to obtain and maintain flood insurance after receiving
disaster assistance even when the GFIP expires.
The GFIP is comparable to the Dwelling Policy Form. Coverage is broken down as building
or contents at the time of a flood loss, and is dependent on flood damage and ownership
(owner or tenant). A $200 deductible applies separately to building coverage and contents
coverage. The GFIP does not provide Increased Cost of Compliance (ICC) coverage.
The Flood Insurance Manual does not provide guidance on writing and servicing GFIPs. As
described above, FEMA provides GFIPs through grants under the post-disaster Individuals
and Households Program; only NFIP Direct issues the GFIP Certificates of Flood Insurance
to individual recipients and services the policies.
A certificate holder may cancel a GFIP at any time and secure a regular SFIP through the
NFIP. The amount of coverage purchased must be at least the same amount of assistance
that was awarded. If the certificate holder purchases an SFIP within 30 days after the
GFIP’s expiration date then no waiting period applies, (consistent with the NFIP’s grace
period for renewals). The GFIP and the SFIP cannot be stacked or combined. Even though
the GFIP becomes void after a purchase of an SFIP; the GFIP recipient should notify NFIP
Direct at 800-638-6620 once they purchase an SFIP.
II. Eligibility for NFIP Coverage
An individual property’s eligibility for NFIP coverage depends on:
1. The location of the building;
2. Whether the building meets certain insurability requirements; and
3. Whether the contents meet certain insurability requirements.
While FEMA’s system conducts certain eligibility checks, NFIP insurers remain responsible
for ensuring eligibility for NFIP coverage.
3. Pub. L. No. 93-288, 88 Stat. 143; 42 U.S.C. 5174
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 5
2. Before You Start
A. Eligibility of Property Locations
1. Where the NFIP Offers Insurance
The NFIP offers insurance for buildings and contents located within participating NFIP
communities or located on federal land.
Table 2 explains what an NFIP participating community is and provides a description of
the stages of a participating community.
Table 2. Where the NFIP Offers Insurance
LOCATION DESCRIPTION
NFIP Participating
Community
The NFIP insures buildings and contents located within participating NFIP
communities or on federal land.
For a community to participate in the NFIP, it must adopt a floodplain
management ordinance that meets or exceeds the minimum NFIP criteria and
have a Flood Insurance Rate Map (FIRM) or a Flood Hazard Boundary Map
(FHBM). Check with the insurer to determine the community status or see the
NFIP Community Status Book.
Emergency
Program
The Emergency Program represents the initial phase of a community’s
participation in the NFIP. In this phase, limited amounts of coverage are available.
Note: Participating communities in the Emergency Program remain in the
Emergency Program if an FHBM is rescinded.
Regular Program
The Regular Program is the final phase of a community’s participation in the NFIP.
In this phase, the completed FIRM is in effect and full coverage limits are available.
NFIP Participating
Community on
Probation
FEMA may place a participating NFIP community on probation when it does not
comply with the NFIP’s floodplain management requirements. Probation ends
when the community remedies all deficiencies. Insurance is available while the
community is on probation.
FEMA applies a $50 Probation Surcharge to all policies in the community, issued
on or after the probation effective date. The NFIP exempts the GFIP from the
surcharge.
Note: FEMA may suspend the community (see Table 3) if it does not remedy the
violations during the probationary period.
Federal Land
NFIP flood insurance is available on land owned by the Federal Government
when the local community meets the floodplain management requirements. The
NFIP records all federal land under a local community number, even if that local
community does not have jurisdiction.
2. Where the NFIP Does Not Offer Insurance
Table 3 shows the locations where the NFIP does not offer insurance.
Table 3. Where the NFIP Does Not Offer Insurance
LOCATION DESCRIPTION
Non-Participating
Community
The NFIP may not sell or renew flood insurance in a community that does not
participate in the NFIP. Once FEMA provides a community with an FHBM or a FIRM
delineating its flood-prone areas, the community has one year from that date
to qualify as an NFIP participating community before this prohibition becomes
effective. Check with the insurer to determine the community status or see the
NFIP Community Status Book.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 6
2. Before You Start
LOCATION DESCRIPTION
Suspended NFIP
Community
The NFIP may not sell or renew flood insurance in a community suspended from
the NFIP. Current policies in the suspended community remain in effect until
policy expiration.
• The NFIP may not renew a policy while the community is suspended.
• Insurers must cancel any policies issued in error or any policy renewed after
the date of a community suspension.
• To obtain coverage after the NFIP reinstates a community, property owners
should contact their agent or insurer to submit a new Flood Insurance
Application Form.
• Insurers must use the applicable waiting period required to obtain coverage.
Areas Covered by
the Coastal Barrier
Resources Act
Flood insurance may not be available in System Units or Otherwise Protected
Areas (OPAs) identified under the Coastal Barrier Resources System (CBRS).
Such areas designated under the CBRS are typically undeveloped coastal
barriers within the boundaries of areas established under federal, state, or local
law, or that are held by a qualified organization, primarily for wildlife refuge,
sanctuary, recreational, or natural resource conservation purposes. See Appendix
E: Coastal Barrier Resources System for additional information.
Table 3. Where the NFIP Does Not Offer Insurance continued
B. Building Eligibility
1. General Information
The NFIP will insure a building that:
• Is affixed to a permanent site;
• Has two or more outside rigid walls with a fully secured roof;
• Resists flotation, collapse, and lateral movement; and
• Has at least 51 percent of the Actual Cash Value (ACV) of the building, including
machinery and equipment that are a part of the building, above ground level,
unless the lowest level of the affixed structure is at or above the Base Flood
Elevation (BFE) and is below ground, using earth as insulation material in
conjunction with energy-efficient building techniques.
4
Base Flood Elevation
BFE is the elevation of surface water resulting from a flood that has a 1 percent chance of
equaling or exceeding that level in any given year. It is shown on the FIRM for Zones AE, AH,
A1–A30, AR, AR/A, AR/AE, AR/A1–A30, AR/AH, AR/A0, V1–V30 and VE. BFE is no longer
an NFIP rating factor to determine premium. However, the SFIP policy forms still reference
BFE in defining a building’s eligibility for NFIP coverage when partially underground or under
construction. Moreover, BFE continues to be a key factor determining compliance with NFIP
floodplain management regulations. Such compliance affects eligibility for Community Rating
System discounts and floodproofing discounts. The Flood Insurance Manual continues to
reference BFE in these instances. While BFE remains relevant to NFIP insurers’ administration
of certain NFIP policies, insurers are no longer responsible for reporting the information to
FEMA’s system.
4. 44 CFR Part 61, Appendix A(1)-(3), II.C.6 & IV.11
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 7
2. Before You Start
2. Single and Multiple Buildings
To qualify as a single building, subject to the single-building limits of coverage, a
building must be:
• Separated from other buildings by intervening clear space; or
• Separated into divisions by solid vertical load-bearing walls.
– Division walls must divide the building from its lowest level to its highest
ceiling and have no openings.
– If there is access through the division wall by a doorway or other opening,
the structure must be insured as one building unless it meets one of the
following criteria:
> It is a separately titled building contiguous to the ground;
> It has a separate legal description; or
> It is regarded as a separate property for other real estate purposes,
meaning that it has most of its own utilities and may be deeded, conveyed,
and taxed separately.
Note: If writing multiple policies for multiple buildings at the same location, the insurer
must maintain detailed information describing the ownership and insurable interest
that pertains to each policy. Insurers can submit requests to FEMA seeking single-
building determinations for complex structures with multiple building owners or mixed
ownership types.
Where there are multiple separate buildings located at a single address (for example,
a single-family residence and a guest house on the same property) and the property
owners want to insure both buildings, the insurer should write two separate policies and
use the property description field on each Application Form to distinguish the buildings.
Where there are multiple buildings on the same property connected by means of rigid
exterior walls, solid load-bearing interior walls, stairways, an elevated walkway, or roof,
the insurer may write a policy covering them as a single building or multiple policies
covering them as separate buildings.
3. Eligible Types of Buildings
Table 4 describes the types of buildings the NFIP insures.
Table 4. Buildings the NFIP Insures
BUILDING TYPE DESCRIPTION
Additions and
Extensions
When insuring a building with one or more additions, the applicant must choose
between purchasing one policy or separate policies for the building and each addition
and extension.
Additions and extensions attached to and in contact with the building by the following
methods may be insured under a separate policy:
• Rigid exterior wall
• Solid load-bearing interior wall
• Stairway
• Elevated walkway
• Roof
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 8
2. Before You Start
BUILDING TYPE DESCRIPTION
Additions and
Extensions
continued
The NFIP requires an Application Form for each addition and extension insured
separately. The Application Form must:
• Clearly describe the separately insured addition and extension;
• Contain the rating information specific to the addition and extension; and
• Request building and/or contents coverage for the addition and extension.
The Additional Information portion of the Application Form for the main building
should reference the policy number or quote number for the policy separately insuring
the addition or extension.
Note: Additions and extensions cannot be excluded from building coverage under the
main building’s policy, unless the additions and extensions are insured separately.
Agricultural
Building
A building used exclusively in connection with the production, harvesting, storage,
raising, or drying of agricultural commodities. Examples of eligible agricultural buildings
include barns, silos, and grain storage buildings.
Boathouse
Located Partially
Over Water (Non-
Boathouse Parts)
The NFIP insures the non-boathouse parts of a building into which boats are floated, if
the building is partly over land and also used for residential, commercial, or municipal
purposes and is eligible for flood coverage. The NFIP does not insure boat repair docks
or boat storage over water.
The NFIP will insure the area above the boathouse used for purposes unrelated to the
boathouse use (for example, a residential use) from the floor joists to the roof, including
walls. The NFIP will also insure a common wall between the boathouse area and other
parts of the building.
The following items are not insured (see the SFIP for the limitations on coverage):
• The ceiling and roof over the boathouse portions of the building into which boats
are floated;
• Floors, walkways, decking, etc., within the boathouse area, or outside the area,
but pertaining to boathouse use;
• Exterior walls and doors of the boathouse area not common to the rest of the
building;
• Interior walls and coverings within the boathouse area; and
• Contents located within the boathouse area, including furnishings and equipment,
relating to the operation and storage of boats and other boathouse uses.
Building
Becomes Entirely
Over Water
A building originally constructed on land or partially over water that later becomes
entirely over water because of erosion is eligible for coverage if the building has
had continuous coverage. Coverage must have been in place for at least one year
before the building being located entirely over water (regardless of any changes in the
ownership of the building), or from the date of construction if that was less than one
year before the building became located entirely over water.
The property owner must establish eligibility for NFIP coverage by submitting all of the
following documentation:
• A letter from the community official stating that the building originally was
constructed on land or only partially over water;
• Photographs of the building over land, if available;
• The approximate date when the building became located entirely over water; and
• Proof of continuous flood insurance coverage from the period beginning 1 year
prior to the building being located entirely over water (regardless of any changes in
the ownership of the building), or from the date of construction if less than 1 year.
Table 4. Buildings the NFIP Insures continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 9
2. Before You Start
BUILDING TYPE DESCRIPTION
Building Entirely
Over Water before
October 1, 1982
The NFIP will insure a building located entirely in, on, or over water, or seaward of mean
high tide that was not constructed or substantially improved after September 30, 1982.
Building Partially
Over Water
The NFIP may insure a building not “entirely” over water; for example, if part of the
exterior perimeter walls and foundation of the building are on land or on the landward
side of mean high tide (mean high water).
Note: When the exterior perimeter walls of the building are completely over water, but
the support system or foundation underneath the building extends onto land, or the
extension of any mechanism for access into the building (including, but not limited to,
stairs, decks, walkways, piers, posts, pilings, docks, or driveways) is fully or partially
on land, the building and the access are ineligible for coverage.
Building Partially
Underground
The NFIP insures buildings or units and eligible contents if 49 percent or less of the
ACV, including machinery, is below ground when an energy-efficient building technique
uses earth as an insulator. The lowest floor must be at or above the BFE.
5
Building Under
Construction
The NFIP will insure a building under construction, alteration, or repair before it is
walled and roofed, using the NFIP-issued rates based on the construction designs
and the intended use of the building.
A building under construction that is not walled and roofed is not eligible for
coverage if construction stops for more than 90 days or the lowest floor, including
the basement floor, of a non-elevated building or the lowest elevated floor of an
elevated building is below the BFE.
6
The NFIP will not insure materials or supplies
intended for use in such construction, alteration, or repair unless they are contained
within an enclosed building on the premises or adjacent to the premises.
For information on rating, see the Building Under Construction heading in Section 3:
How to Write.
Condominium
Building
A condominium is a building or a complex of buildings containing a number of
individually owned apartments or houses where each unit owner has an undivided
interest in common elements of the building. Residential condominium buildings eligible
for the RCBAP must be insured under the RCBAP. See the Building Occupancy heading
in Section 3: How to Write for additional information.
Cooperative
Building
Corporations own and manage cooperative buildings, and their ownership differs from
the condominium form of ownership. Residents within cooperative buildings buy shares
of the corporation, rather than the real estate (building, land, or both building and land).
A cooperative building must have at least 75 percent of the total floor area used for
residential purposes to qualify as a residential occupancy. Cooperative buildings are
not eligible for the RCBAP.
Detached Garage
In general, the SFIP can only insure one building. However, the Dwelling Form includes
limited coverage for a detached garage servicing a one-to-four family dwelling. Coverage
is limited to no more than 10 percent of the limit of liability on the one-to-four family
dwelling. This coverage does not apply to garages used for residential, commercial, or
agricultural purposes.
Table 4. Buildings the NFIP Insures continued
5. 44 CFR Part 61, Appendix A(1)-(3), IV.11
6. 44 CFR Part 61, Appendix A(1)-(3), III.A.5
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 10
2. Before You Start
BUILDING TYPE DESCRIPTION
Homeowners’
Association (Non-
Condominium)
A Homeowners’ Association not in the condominium form of ownership owns the
common areas, and individual building owners have a right to use and enjoy the
common areas. A Homeowners’ Association can purchase a policy for an individual
building in the building owner’s name when the Association’s by-laws require the
Association to purchase flood insurance building coverage for its members. A
Homeowners’ Association not in the condominium form of ownership is not eligible for
the RCBAP.
Manufactured/
Mobile Home or
Manufactured
Building or Travel
Trailer Without
Wheels
A manufactured home (also known as a mobile home) or manufactured building is a
structure built on a permanent chassis, transported to a site in one or more sections,
and affixed to a permanent foundation.
A travel trailer without wheels, built on a chassis and affixed to a permanent
foundation, is eligible for flood coverage where regulated under the community’s
floodplain management and building ordinances or laws.
Manufactured/mobile homes and travel trailers must meet the following requirements
to be eligible for NFIP coverage:
• Be affixed to a permanent foundation that may be a poured masonry slab,
foundation walls, piers, or blocks, so that the wheels and axles of the mobile
home do not support its weight; and
• Be anchored to a permanent foundation to resist flotation, collapse, or lateral
movement:
– By providing over-the-top or frame ties to ground anchors;
– In accordance with manufacturer’s specifications; or
– In compliance with the community’s floodplain management requirements.
Manufactured/mobile homes continuously insured since September 30, 1982, can
renew under the previously existing requirements if they meet the following conditions:
• Are affixed to a permanent foundation in compliance with the foundation and
anchoring requirements at the time of placement; and
• Are adequately anchored, which means the foundation support system must
secure the manufactured or mobile home into the ground sufficiently to resist
flotation, collapse, and lateral movement caused by flood forces, including wind
forces in coastal areas.
Note: All references in this manual to manufactured/mobile homes are specific to
manufactured/mobile homes and travel trailers without wheels, when affixed to a
permanent foundation.
Timeshare
Building
A timeshare is an arrangement where several joint owners have the right to use a
property under a time-sharing agreement and where the corporation owns the building.
The NFIP insures individual units in a timeshare building in the condominium form of
ownership under the Dwelling Form. These buildings are eligible for coverage under the
RCBAP if 75 percent of the total floor area of the building is for residential purposes. If
the 75 percent criteria is not met, see the Condominium Rating Information heading in
Section 3: How To Write.
4. Ineligible Types of Buildings
NFIP does not insure the buildings shown in Table 5.
Table 4. Buildings the NFIP Insures continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 11
2. Before You Start
Table 5. Buildings the NFIP Does Not Insure
BUILDING TYPE DESCRIPTION
Building Declared
in Violation
of Floodplain
Management
Requirements
The NFIP may not insure buildings (or their contents) declared to be constructed or
altered in violation of state or local floodplain management, mudflow, or flood-related
erosion area management or control laws, regulations, or ordinances. Section 1316
of the National Flood Insurance Act of 1968 (NFIA) allows state or local governments
to make this declaration. Insurance becomes available when the owner corrects the
violation and the state or local government rescinds the Section 1316 declaration.
Building Entirely
Over Water On
or After October
1, 1982
The NFIP does not insure buildings constructed or substantially improved on or after
October 1, 1982, located entirely in, on, or over water, or seaward of mean high tide.
Building Used for
the Manufacture
or Distribution
of a Controlled
Substance
The NFIP may not knowingly insure a building or its contents used for the manufacture
or distribution of a controlled substance in violation of federal law. Doing so would
directly promote, effectuate, or encourage a violation of the law, which would violate
public policy and general principles of insurance. This restriction includes buildings
or contents used to grow or dispense marijuana in locations where this activity is
legal under state law, because governing federal law makes it unlawful to use any
place for the manufacture or distribution of a controlled substance. FEMA can provide
additional information on the application of this guidance to specific circumstances.
Container-Type
Building
The NFIP does not insure containers used to store gas and liquids, chemical or reactor
container tanks or enclosures, brick kilns, and similar units, and their contents.
Water Treatment
Plant
The NFIP does not insure a water treatment plant unless 51 percent or more of its
ACV is above ground.
C. Contents Eligibility
The NFIP only insures contents located in a building that is eligible for building coverage.
• Dwelling Form: Contents must be located inside a building at the described location.
If the building is not fully enclosed, contents must be secured to prevent flotation
out of the building.
• General Property Form: Contents must be located inside the fully enclosed
insured building.
• RCBAP Form: Contents must be located inside the fully enclosed insured building.
Table 6. Contents Eligibility Examples
ELIGIBILITY EXAMPLES
Eligible
Contents
• Personal property inside a building at the described location, if:
– The property is owned by the policyholder or the policyholder’s household
family members; or
– At the policyholder’s option, the property is owned by guests or servants.
• Equipment.
• Self-propelled vehicles or machines, not licensed for use on public roads, and
– Used mainly to service the described location; or
– Designed and used to assist handicapped persons while the vehicles or
machines are inside a building at the described location.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 12
2. Before You Start
ELIGIBILITY EXAMPLES
Eligible
Contents
continued
• Parts and equipment as open stock, not part of a specific vehicle or
motorized equipment.
• Contents located in silos, grain storage buildings, and cisterns.
• Commercial contents.
• Contents within units in a cooperative building:
– Residents of a unit within a cooperative building may purchase contents
coverage under the Dwelling Form.
– Shareholders may apply 10 percent of the contents coverage for betterments
and improvements at the time of loss.
• Contents in a non-residential condominium unit.
• Personal property removed to safety at another location to protect it from flood
or the imminent danger of flood, for a period of 45 days.
Ineligible
Contents
• Automobiles including assembled and unassembled dealer’s stock.
• Motorcycles including assembled and unassembled dealer’s stock.
• Motorized equipment including assembled and unassembled dealer’s stock.
• Bailee customer’s goods including contractors, cleaners, repair shops,
processors of goods belonging to others, and similar risks.
D. NFIP Coverage Exclusions and Limitations
Table 7 shows examples of NFIP coverage exclusions and limitations.
Table 7. NFIP Coverage Exclusions and Limitations
TYPES OF EXCLUSION
AND LIMITATIONS COMMENT
Basement
The SFIP limits coverage for basement improvements such as finished walls,
floors, ceilings, or personal belongings kept in a basement.
Building Coverage for a Unit
in a Cooperative Building
The NFIP does not provide building coverage for shareholder units in a
cooperative building.
Residents or tenants of a cooperative building may purchase contents
coverage under the Dwelling Form.
Deck
The SFIP limits coverage for decks except for steps and landings to a
maximum landing area of 16 square feet.
Elevated Building with
Enclosure
The SFIP limits coverage for enclosed, walled-in areas below the lowest floor
of a Post-FIRM elevated building located in a Special Flood Hazard Area
(SFHA), including finished walls, floors, ceilings, or personal belongings kept
in an enclosure.
7
Table 6. Contents Eligibility Examples continued
7. 44 CFR Part 61, Appendix A(1)-(2), III.A.8 & B.5; 44 CFR Part 61, Appendix A(3), III.A.8 & B.4
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 13
2. Before You Start
Table 7. NFIP Coverage Exclusions and Limitations continued
TYPES OF EXCLUSION
AND LIMITATIONS COMMENT
Flood in Progress
The SFIP will not pay for a loss caused by a flood that was a continuation of
a flood that existed:
• On or before the date the waiting period for coverage began; or
• If the coverage became effective as of the time of a loan closing (under
the loan exception to the 30-day waiting period), before coverage
became effective.
8
In other words, the SFIP does not insure damage from a flood that began
before a new policy’s waiting period (or coverage, if no waiting period) began,
even if the flood did not damage the insured property, until after the waiting
period (or coverage) began. If a flood was already in progress before a
policyholder requested an increase in coverage on an existing policy, the SFIP
will only insure damage that occurred to the insured property from that same
flood event after the waiting period (or increased coverage, if no waiting
period) began, under the lesser policy limits.
See the NFIP Claims Manual for additional guidance.
Hot Tub or Spa
The SFIP excludes coverage for hot tubs or spas, except where used as
bathroom fixtures.
Non-Residential
Condominium Unit
The NFIP does not provide building coverage for owners of non-residential
units in residential or non-residential buildings.
Swimming Pool The SFIP excludes coverage for indoor or outdoor swimming pools.
Timeshare Unit in a
Multi-Unit Building
The NFIP does not provide coverage for these units unless they are in a
condominium form of ownership.
III. Effective Dates for New Policies and Endorsements
In general, new flood insurance policies and endorsements adding or increasing coverage
become effective following a 30-day waiting period. However, there are three exceptions
listed below and detailed later in this section:
1. Map Revision Exception: Coverage becomes effective after a 1-day waiting period
during the first 13 months following a flood map revision newly identifying a building
as located within an SFHA when it was previously identified as outside of an SFHA.
9
2. Loan Exception: If the initial purchase of new, additional, or increased flood
insurance coverage is in connection with making, increasing, extending, or renewing
a loan secured by the insured property (for example, a mortgage loan) – and if the
NFIP receives the Application Form or endorsement request and full amount due
within specified timeframes as noted in Table 10 – then no waiting period applies
and coverage becomes effective as of the time of the loan closing.
10
8. 44 CFR Part 61, Appendix A(1)-(3), V.B “Flood in Progress”
9. 42 USC 4013(c)(2)(C); 44 CFR § 61.11(a)
10. 42 USC 4013(c)(2)(C); 44 CFR § 61.11(b)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 14
2. Before You Start
3. Post-Wildfire Exception: Coverage becomes effective after a 1-day waiting period
11
if:
a. The insured property is privately-owned (property not owned by a federal, state,
local, territorial, or tribal government) and experiences damage caused by a flood
that originated on federal land;
b. Post-wildfire conditions on federal lands caused or worsened the flooding; and
c. The policyholder purchased the new, additional, or increased coverage either:
i. On or before the fire containment date; or
ii. During the 60-calendar day period following the fire containment date.
Insurers must follow the applicable waiting period and effective date rules for all policies,
including policies issued in conjunction with a community’s initial entry into the Regular
Program or conversion from the Emergency Program to the Regular Program.
A. Standard 30-day Waiting Period
1. General Information
A 30-day waiting period applies to new policies and endorsements to add or increase
coverage that are not otherwise eligible for the exceptions provided above. The date the
waiting period begins varies based on:
• The date of the Application Form (or endorsement request);
• The method of sending the Application Form (or endorsement request) and
payment; and
• The date the insurer receives the Application Form (or endorsement request) and
full amount due (including applicable premiums, surcharges, and fees).
For the purposes of determining a waiting period start date, “certified mail” includes
certified mail sent through the U.S. Postal Service or a reputable third-party delivery
service that provides proof of the actual mailing date and delivery date to the insurer.
Table 8 shows how to determine the effective date of a new policy or endorsement
adding or increasing coverage that is subject to the 30-day waiting period.
Table 8. Effective Date with a 30-day Waiting Period
RECEIPT DATE EFFECTIVE DATE EXAMPLE
If the insurer receives the
Application Form (or endorsement
request) and full amount due
within 10 calendar days from the
application date (application date
plus 9 days)
The effective date will
be 12:01 a.m. (local
time) on the 30th
calendar day after the
application date.
If the application date is May 13 and
the insurer receives the Application
Form (or endorsement request) and
full amount due on May 17, then the
earliest effective date is June 12.
If the Application Form (or
endorsement request) and full
amount due are mailed by certified
mail within 4 calendar days from the
application date (application date
plus 3 days), regardless of when the
insurer receives them
The effective date will
be 12:01 a.m. (local
time) on the 30th
calendar day after the
application date.
If the application date is May 13, the
Application Form (or endorsement
request) and full amount due are
mailed by certified mail on May
15, and the insurer receives the
Application Form and full amount due
on May 26, then the earliest effective
date is June 12.
11. 42 USC 4013(c)(2)(C); 44 CFR § 61.11(c)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 15
2. Before You Start
Table 8. Effective Date with a 30-day Waiting Period continued
RECEIPT DATE EFFECTIVE DATE EXAMPLE
If the insurer receives the
Application Form (or endorsement
request) and full amount due
after 10 calendar days from the
application date (application date
plus 9 days) and the Application
Form (or endorsement request) and
full amount due were NOT mailed
by certified mail within 4 calendar
days from the application date
(application date plus 3 days)
The effective date will
be 12:01 a.m. (local
time) on the 30th
calendar day after the
insurer’s receipt date.
If the application date (or
endorsement request) is May 13,
the insurer receives the Application
Form (or endorsement request) and
full amount due on May 25, then the
earliest effective date is June 24.
2. Insufficient Payment
If a policyholder pays less than the full amount due to purchase the amount of coverage
requested, see the Reformation Due to Insufficient Premium or Rating Information
heading in this section for the applicable procedures and effective date rules.
3. Invalid Payment
The insurer may not use the receipt date of an invalid payment to determine the
effective date of a policy transaction. A payment is invalid if it cannot be negotiated
because there are non-sufficient funds (NSF) in the account, a reversal (dispute) is
successfully completed on an electronic payment, or the payment is non-negotiable for
any other reason. Upon notification that the payment is invalid, the insurer must:
• Cancel or nullify the transaction associated with that payment; and
• Send notification of the cancellation or nullification to the policyholder, agent,
and lender(s), if applicable.
If the insurer receives a valid payment, the insurer must process the transaction based
on the valid premium receipt date. The insurer must determine the effective date of the
transaction based on the valid payment receipt date, subject to the effective date rules.
Note: A new Application Form or endorsement request is not required for this transaction
as long as the insurer still has the original request.
B. Map Revision Exception (1-Day Waiting Period)
A 1-day waiting period applies when the NFIP revises an FHBM or a FIRM to show that the
building is now in an SFHA when it was not previously. The 1-day waiting period only applies
if the insurer receives the Application Form (or endorsement request) and full amount due
within 13 months from the effective date of the map revision. If the insurer receives the
Application Form (or endorsement request) and full amount due after 13 months from the
effective date of the map revision, the 30-day waiting period applies.
12
The 1-day waiting
period rule applies for all buildings, including those owned by condominium associations.
Table 9 shows how to determine the effective date of a new policy or endorsement adding
or increasing coverage that is eligible for the map revision exception.
12. 42 USC 4013(c)(2)(C); 44 CFR § 61.11(a)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 16
2. Before You Start
Table 9. Effective Date When Eligible for the Map Revision Exception
RECEIPT DATE EFFECTIVE DATE EXAMPLE
If the insurer receives the
Application Form (or endorsement
request) and full amount due
within 10 calendar days from the
application date (application date
plus 9 days)
The effective date will
be 12:01 a.m. (local
time) on the next
calendar day after the
application date.
If the FIRM was revised on January 5,
the application date is May 13, the
insurer receives the Application Form (or
endorsement request) and full amount
due on May 17, then the earliest
effective date is May 14.
If the Application Form (or
endorsement request) and full
amount due are mailed by certified
mail within 4 calendar days from
the application date (application
date plus 3 days), regardless of
when the insurer receives them
The effective date will
be 12:01 a.m. (local
time) on the next
calendar day after the
application date.
If the FIRM was revised on January 5,
the application date is May 13, the
Application Form (or endorsement
request) and full amount due mailed
by certified mail on May 15, and the
insurer receives the Application Form (or
endorsement request) and full amount
due on May 26, then the earliest
effective date is May 14.
If the insurer receives the
Application Form (or endorsement
request) and full amount due
after 10 calendar days from the
application date (application date
plus 9 days) and the Application
Form (or endorsement request) and
full amount due were NOT mailed
by certified mail within 4 calendar
days from the application date
(application date plus 3 days)
The effective date will
be 12:01 a.m. (local
time) on the next
calendar day after the
insurer’s receipt date.
If the FIRM was revised on January 5,
the application date is May 13, the
Insurer receives the Application Form (or
endorsement request) and full amount
due on May 28, then the earliest
effective date is May 29.
C. Loan Exception (No Waiting Period)
New, additional, or increased flood insurance coverage purchased in connection with making,
extending, increasing, or renewing a loan secured by the insured property (for example, a
mortgage loan) is not subject to the 30-day waiting period if the NFIP receives the Application
Form (or endorsement request) and full amount due within specified timeframes. If a policy
or endorsement is eligible for this exception, then the coverage becomes effective as of the
time of the loan closing.
13
Condominium association policies or endorsements purchased
in conjunction with loan transactions in the name of the condominium association can be
eligible for this exception. Contents-only policies and endorsements can only be eligible for
the loan exception if the contents are part of the security for a loan.
The policyholder must apply for flood insurance (or request an endorsement to add or
increase coverage) on or before the closing date of the loan transaction. If the policyholder
requests the coverage after the closing date, the 30-day waiting period applies. A valid
Application Form (or endorsement request) includes all the information necessary to calculate
the NFIP policy premium.
In determining eligibility for the loan exception, the insurer may rely on an agent’s
representation on the Application Form (or endorsement request) that the purchase is in
13. 42 USC 4013(c)(2)(C); 44 CFR § 61.11(b)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 17
2. Before You Start
connection with making, extending, increasing, or renewing a loan secured by the insured
property but must confirm timely receipt of the Application Form (or endorsement request)
and full amount due. If a loss occurs during the first 30 days of the policy or additional or
increased coverage, the insurer must obtain documentation of the loan transaction (such as
settlement papers) to validate that a loan transaction occurred before paying the loss.
Table 10 shows how to determine the effective date of a new policy or endorsement to add
or increase coverage that may be eligible for the loan exception. If the effective date is the
date and time of the loan closing, the declarations page should state the effective date and
specify that the coverage is effective “at the time of loan closing” (versus 12:01 a.m.). The
insurer only needs to obtain documentation of the specific time of the loan closing if a loss
occurred on the loan closing date, to determine whether the loss occurred after the new,
additional, or increased coverage began (see additional guidance in the NFIP Claims Manual).
Table 10. Effective Date When Potentially Eligible for the Loan Exception
RECEIPT DATE EFFECTIVE DATE EXAMPLE
If the lender, title company, or settlement attorney pays the premium
If the policyholder requests the policy (or
additional or increased coverage) on or
before the loan transaction closing and
the insurer receives the Application Form
(or endorsement request) and full amount
due within 30 calendar days from the
closing (closing date plus 29 days)
The effective date will
be the date and time
of the loan closing.
If the loan transaction date is on
April 3 and the application date is
April 3; and the insurer receives the
Application Form (or endorsement
request) and full amount due, paid
by the lender, title company, or
settlement attorney on April 20; then
the policy effective date is April 3 at
the time of loan closing.
If the policyholder requests the policy
(or additional or increased coverage) on
or before the loan transaction closing,
and the insurer receives the Application
Form (or endorsement request) and full
amount due after 30 calendar days from
the closing (closing date plus 29 days
or more)
The effective date will
be 12:01 a.m. (local
time) on the 30th
calendar day after the
insurer’s receipt date.
If the loan transaction date is on
April 3 and the application date is
April 3; and the insurer receives the
Application Form (or endorsement
request) and full amount due, paid
by the lender, title company, or
settlement attorney on May 10; then
the earliest policy effective date is
June 9.
If the policyholder or another party not listed above pays the premium
If the policyholder requests the policy (or
additional or increased coverage) on or
before the loan transaction closing, and
the insurer receives the Application Form
(or endorsement request) and full amount
due within 10 calendar days from the
loan transaction closing (closing date plus
9 days)
The effective date will
be the date and time of
the loan closing.
If the loan transaction date is on
April 3, the application date is April
3, and the insurer receives the
Application Form (or endorsement
request) and full amount due paid by
the policyholder on April 7, then the
policy effective date is April 3 at the
time of loan closing.
If the policyholder requests the policy (or
additional or increased coverage) on or
before the loan transaction closing, and
the insurer receives the Application Form
(or endorsement request) and full amount
due after 10 calendar days from the
closing (closing date plus 9 days or more)
The effective date will
be 12:01 a.m. (local
time) on the 30th
calendar day after the
insurer’s receipt date.
If the loan transaction date is on
April 3, the application date is April
3, and the insurer receives the
Application Form (or endorsement
request) and full amount due paid
by the policyholder on April 15, then
the earliest policy effective date is
May 15.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 18
2. Before You Start
Note: When an agent submits an agency check, it must be accompanied by settlement paperwork or
a photocopy of the original check from the lender, title company, or settlement attorney to be eligible
for the waiting period exception.
D. Post-Wildfire Exception (1-Day Waiting Period)
The 30-day waiting period may not apply to new policies (or endorsements to add or
increase coverage) for privately-owned property (building or contents) affected by flooding
from federal land caused by post-wildfire conditions. Coverage becomes effective at 12:01
a.m. (local time) on the first calendar day after the Application Form (or endorsement
request) date:
14
1. The insured property is privately-owned (property not owned by a federal, state,
local, territorial, or tribal government) and experiences damage caused by a flood
that originated on federal land;
2. Post-wildfire conditions on federal lands caused or worsened the flooding; and
3. The policyholder purchased the new, additional, or increased coverage either:
a. On or before the fire containment date; or
b. During the 60-calendar-day period following the fire containment date.
Given the eligibility criteria for this post-wildfire exception, the policyholder had to already
have NFIP coverage in place at least one day before the triggering flood loss occurred.
Therefore, this exception is relevant when a new policy (or additional or increased coverage)
is within the standard 30-day waiting period and experiences a loss qualifying it for the
post-wildfire exception and resulting 1-day waiting period. The insurer cannot endorse the
policy to change its effective date, so must cancel and rewrite the policy.
For the purposes of the post-wildfire exception, the federal agency responsible for the
land on which the post-wildfire conditions existed determines the fire containment date.
FEMA supports the application of the post-wildfire exception by tracking containment dates
for wildfires occurring on federal lands and consulting, when necessary, with appropriate
federal agencies to determine whether post-wildfire conditions caused or worsened a
flood. NFIP insurers may request assistance with the proper application of the post-wildfire
exception by contacting FEMA-FIDClaimsMailbox@fema.dhs.gov.
IV. Administrative Topics
A. Electronic Signatures
NFIP insurers must sell and service NFIP policies in a customer-centric manner as part of
their normal business practices. To improve the policyholder’s experience and to reduce
administrative burden, FEMA approves and encourages the use of electronic signatures
on NFIP transactions. FEMA will not deny the legal effect, validity, or enforceability of
a signature solely because it is in electronic form. Insurers should accept electronic
signatures in accordance with their general business practices and applicable laws.
Electronic signatures must comply with the following requirements.
• The signer must use an acceptable electronic form of signature;
• The electronic form of signature must be executed or adopted by a person with the
intent to sign the electronic document;
• The electronic form of signature must be attached to or associated with the
electronic document being signed;
• There must be a means to identify and authenticate a particular person as the
signer; and
14. 42 USC 4013(c)(2)(C); 44 CFR § 61.11(c)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 19
2. Before You Start
• There must be a means to preserve the integrity of the signed document.
15
B. Delivery of the Policy
The insurer must send:
• The policy form (contract) to the policyholder at the time of policy issuance or after any
change made to the policy contract; and
• The policy declarations page to the policyholder, agent, and, if applicable, lender(s); and
• The NFIP Summary of Coverage; and
• A cover letter to reference these enclosures.
See Appendix A: Policy for copies of the SFIP policy forms. See Appendix I: Policyholder
Communications for declarations page samples and requirements.
Note: The insurer may send these documents via postal or electronic delivery in
accordance with their usual business practice. FEMA recommends that the insurers use an
opt-in approach to electronic communication with policyholders.
C. Evidence of Insurance
A copy of the Application Form and premium paid receipt or a copy of the declarations page
is sufficient evidence of proof of purchase for new policies.
V. Assignment and Transfer of Business
A. Assignment of a Policy to a New Building Owner
The owner of an insured building may provide written consent to assign a flood insurance
policy with building coverage to the purchaser of the building. Owners may not assign
contents-only policies or policies on buildings under construction. The seller must sign
the assignment endorsement on or before the closing date, and the new building owner
has up to 30 days beyond the closing date to submit the endorsement form to the
insurer for processing.
If the building is a primary residence, the insurer must validate the primary residence status
at the time of assignment for the assignee to be eligible for the primary residence status
and associated HFIAA surcharge. If the previous owner received a Pre-FIRM discount and
used the building as a primary residence but it is not a primary residence for the new owner,
the new owner may receive the same discounted premium as the previous owner. However,
the annual increase cap (which is a component of the discounted premium) is based on
the information provided by the new owner. The discounted premium does not include
assessments, fees, or surcharges.
See Section 4: How to Endorse for information on endorsement procedures to accomplish
assignment of a policy.
New Policy After a Real Estate Transaction
Under certain conditions, the new owner of an NFIP-insured building can buy a new NFIP policy
and, if eligible, receive any statutory discount the prior policyholder received. For additional
information, see the New Policy After a Real Estate Transaction heading under Statutory
Discounts in Section 3: How to Write.
15. Nothing stated herein removes or waives the explicit requirements found at Pt. 61 App. A(1–3) VII General
Conditions G. 4, Requirements in Case of Loss. Any Proof of Loss must be signed and sworn to by the policyholder
.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 20
2. Before You Start
B. Transfer of Any or All of A Policyholder’s or Agent’s Business to Another Insurer
One kind of transfer of business occurs when a policyholder or agent moves any or all their
existing business from one insurer to another. Such a transfer occurs through a renewal
notice issued by the receiving insurer but otherwise resembles the process for new business.
The receiving insurer must collect the NFIP policy number of the existing policy, policyholder
name, property address, and all underwriting information to verify the correct rating and
issuance of the policy, including the following as applicable:
• Prior insurer’s declaration page;
• Documentation of primary residence status (if property address and mailing
address differ);
• Documentation to support mitigation discounts being applied to policy;
• Elevation Certificate if available;
• Documentation of building replacement cost value, if applicable, for an Other
Residential Building, Residential Condominium Building, Non-Residential Building, or
Non-Residential Unit;
• Photographs, if applicable (the NFIP will accept photographs from the previous insurer
if there is no evidence of structural changes that affect rating).
The receiving insurer must validate the information when there is a discrepancy between
the building descriptions in the policy underwriting file and the prior insurer’s declarations
page. The receiving insurer submits the existing NFIP policy number, policyholder name,
property address, and all the underwriting information to FEMA requesting a policy transfer
quote. FEMA calculates the total amount due and sends the quote back to insurer.
If the policy is within 90 days of its expiration date, then the receiving insurer can
immediately generate a renewal notice to accomplish the transfer. If the policy is not
within 90 days of its expiration date, then the insurer must wait to generate a renewal
notice within 90 days of the expiration date. In this latter case, the insurer must request
an updated quote reflecting the most recent data available (for instance, Building
Replacement Cost Value) and the rating plan in effect at the time of the renewal.
C. Transfer of an Insurer’s Entire Book to Another Insurer
Another kind of transfer of business occurs when a WYO company moves all of its existing
business to another WYO company or to NFIP Direct. The transferring WYO company can
move its existing business either all at once or policy-by-policy as they come up for renewal,
consistent with a transfer plan submitted to and approved by FEMA.
16
The transferring WYO company must collect all the policy and underwriting information for
its book of NFIP business (or those policies approaching their expiration dates) and submit
that information to the receiving NFIP insurer. When each policy comes within 90 days
of its expiration date, the receiving insurer asks FEMA to calculate the renewal premium.
FEMA generates the quote and the receiving insurer uses the FEMA quote to send the
renewal notice.
VI. Reformation Due to Insufficient Premium or Rating Information
A. General Information
A policy can provide only the amount of coverage that the premium received will purchase
for a full policy term (or the applicable portion of the policy term). An NFIP insurer must
16. See the latest WYO Arrangement for the applicable requirements
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 21
2. Before You Start
reform a policy if it discovers at any time (at writing, endorsement, renewal, or before or
after a loss) that the:
• Premium the insurer received for the policy (or endorsement) is insufficient to buy
the amount of building or contents coverage requested; or
• Rating information is insufficient and, when complete, indicates that the premium
paid is insufficient.
17
Examples of situations that require reformation include:
• Underpayment of a bill (though not an invalid payment, such as a check returned
by the bank for non-sufficient funds) to purchase an initial policy, policy renewal,
or endorsement;
• A rating adjustment requiring additional premium after a mid-term event (for example,
a renovation or damage from another peril) changes one or more rating characteristics;
• A rating correction requiring additional premium;
• Discovery that an incorrect SFIP form was used (or a different SFIP form is needed
now) and the premium paid is insufficient to purchase the originally requested
coverage amount under the correct policy form; and
• Endorsement of a policy from a provisional rate to a rating engine rate, if the premium
paid is insufficient under the rating engine rate.
Reformation does not apply when renewing by Application Form or recertification
questionnaire a policy otherwise subject to non-renewal. See the Renewal by Application
Form or Recertification Questionnaire heading in Section 5: How to Renew.
Note: See Section 4: How to Endorse for general guidance on rating adjustments and
rating corrections, including those that result in premium refunds.
B. General Reformation Procedures
The insurer must bill the additional premium required to restore the originally requested
amount of coverage. If the rating information is insufficient to determine the correct
premium amount, the insurer must request additional information. To restore the originally
requested amount of coverage without a waiting period, the insurer must receive the
additional rating information, if applicable, within 60 days of the request, and the additional
premium within 30 days from the date of the bill. If the policyholder provides the additional
premium (and additional information, if applicable) but not within the specified timeframes,
the insurer must increase the coverage to the originally requested amount by endorsement
with a 30-day waiting period.
18
Table 11 describes the general procedures an insurer
must follow when it discovers – either before or after a loss – that the premium paid is
insufficient to purchase the amount of coverage requested.
17. 44 CFR Part 61, Appendix A(1)-(2), VII. D; 44 CFR Part 61, Appendix A(3), VIII. D
18. 44 CFR Part 61, Appendix A(1)-(2), VII. D; 44 CFR Part 61, Appendix A(3), VIII. D
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 22
2. Before You Start
Table 11. General Procedures to Reform a Policy
STEP DESCRIPTION
1. Calculate
Coverage and
Premium Amounts
The insurer must calculate:
• The amount of coverage that the premium received can purchase after
deducting the costs of all applicable fees and surcharges; and
• The additional premium required to restore the originally requested amount
of coverage, including adjusting the total amount of the bill as needed if the
initial amount charged for any fees or surcharges was incorrect.
2. Request Additional
Information If the
Rating Information Is
Insufficient
If the rating information is insufficient the insurer must request the required
information and receive it within 60 days.
After receiving the requested information, the insurer will:
• If the premium is insufficient, determine the reduced amount of coverage
and calculate the additional premium due; or
• If the premium was overpaid, follow the guidance on refunds in Section 4:
How to Endorse.
If the insurer does not receive the required information within 60 days, the insurer
must contact FEMA Underwriting for additional guidance.
3. Reduce the
Coverage to
the Amount the
Payment Received
Will Purchase
In accordance with its standard business practice, the insurer must then reduce
the coverage to the lower amount by either:
• Immediately reducing the coverage; or
• Preparing to reduce the coverage to that same amount if it does not
receive the additional premium (or rating information) within the timeframes
specified in this table.
In either case, the guidance in Table 12 below determines the effective date of
this reduction in coverage (see Table 14 in the case of an incorrect geolocation or
flood zone).
4. Bill the
Additional Premium
Due
The insurer must send the payor an underpayment letter (copying all other parties
listed on the declarations page) billing them for the additional premium required to
restore the originally requested coverage amount.
5. Increase
Coverage to
the Originally
Requested Amount
• If the insurer receives the additional premium within 30 days from the
date of the bill (and additional rating information, if applicable, within 60
days of the request), the insurer must increase coverage to the originally
requested amount (but not any higher amount) without applying any
waiting period.
• If the insurer receives the additional premium (and additional information,
if applicable) but not within the specified timeframes, the insurer must
increase the coverage by endorsement with a 30-day waiting period.
• If the policyholder requests to increase coverage above the originally
requested amount, the insurer must follow the standard endorsement
procedures including effective date rules (see Section 4: How to Endorse).
6. Consequences If
Additional Premium
(or Additional
Information) Not
Received
• If the insurer does not receive the required rating information, it may
not increase coverage. The insurer must contact FEMA Underwriting for
additional guidance.
• If the insurer has or receives complete rating information but does not
receive the additional premium due, the reduction in coverage amount
applies (see Table 12 to determine the effective date of this reduction) and
the insurer may only increase coverage through the standard endorsement
procedures (see Section 4: How to Endorse).
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 23
2. Before You Start
STEP DESCRIPTION
6. Consequences If
Additional Premium
(or Additional
Information) Not
Received continued
• If the premium received, after deducting the costs of all applicable fees
and surcharges, is insufficient to buy any amount of coverage, and the
policyholder does not pay the additional amount of premium owed to
increase coverage to the originally requested amount or to a lesser
amount, the insurer must cancel the policy and refund the payment.
However, if a claim was paid on a policy in this situation before discovery
of the insufficient premium, the insurer must contact FEMA for additional
underwriting and claims guidance.
Table 12 provides guidance on when to apply the initial reduction in coverage, the
timeframe when additional premium is due, and the effective date of the increase to the
originally requested coverage amount.
19
In this table, “within specified timeframes” refers
to receipt of additional rating information, if applicable, within 60 days and the additional
premium within 30 days, as specified in Table 11.
Table 12. Reformation Timeframes and Effective Dates
Timeframe When the Premium Paid Is Insufficient
Scenario 1:
Full Policy Term
(for example, underpayment
of a renewal bill, a rating
correction, or endorsement from
a provisional rate to a rating
engine rate)
Scenario 2:
Portion of the Policy Term
(after an endorsement that
increased coverage or other mid-
term event affecting premium)
Effective Date of
Reduced Coverage
Beginning of the policy term
• Effective date of the
endorsement; or
• Date of the event
Timeframe When Additional
Premium Applies
Full policy term
Remainder of the policy term
after the:
• Effective date of the
endorsement; or
• Date of the event
Effective
Date of
Increased
Coverage
Premium (and
Rating Information)
Received Within
Specified
Timeframes
Beginning of the policy term
• Effective date of the
endorsement; or
• Date of the event
Received But NOT
Within Specified
Timeframes
Only by endorsement with a
30-day waiting period
Only by endorsement with a
30-day waiting period
19. 44 CFR Part 61, Appendix A(1)-(2), VII.D “Insufficient Premium or Rating Information”; 44 CFR Part 61,
Appendix A(3), VIII.D “Insufficient Premium or Rating Information.”
Table 11. General Procedures to Reform a Policy continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 24
2. Before You Start
Table 13 describes how the insurer must handle a claim when there is insufficient premium
or rating information, whether it discovers the issue before or after a loss.
20
Again, “within
specified timeframes” refers to receipt of additional rating information, if applicable, within
60 days and the additional premium within 30 days, as specified in Table 11.
Table 13. How to Handle a Claim Involving Policy Reformation
ADDITIONAL PREMIUM
(and Rating Information) GUIDANCE
Received Within
Specified Timeframes
• The insurer must settle the claim based on the originally requested
coverage amount
Note: If the policyholder provides the insurer notice within 30 days of the
underpayment notice, they may request that the insurer deduct the additional
premium due from the claim payment.
Received But NOT Within
Specified Timeframes
• If the rating information is insufficient, the insurer may not pay the claim
until it receives complete rating information or additional guidance from
FEMA Underwriting.
• If the rating information is sufficient, the insurer must settle the claim
based on the reduced amount of coverage.
Note: After 30 days has elapsed since the underpayment notice, the
policyholder may still request that the insurer deduct the additional premium
due from the claim payment but the claim payment will be based on the
reduced amount of coverage. Restoration of the original coverage amount is
subject to the 30-day waiting period.
Not Received
• If the insurer does not receive the required rating information, it may not
pay the claim until it receives complete rating information or additional
guidance from FEMA Underwriting.
• If the insurer has or receives complete rating information but does not
receive the additional premium due, it must settle the claim based on
the reduced coverage amount (see Table 12 to determine the effective
date of this reduction).
• If the premium received, after deducting the costs of all applicable fees
and surcharges, is insufficient to buy any amount of coverage, and the
policyholder does not pay the additional amount of premium owed to
increase coverage to the originally requested amount within 30 days of
the underpayment notice, the insurer must cancel the policy, refund the
payment, and withhold payment on the claim. However, if a prior claim
was paid on a policy in this situation before discovery of the insufficient
premium, the insurer must contact FEMA for additional underwriting and
claims guidance.
C. Exception When Reforming a Policy Due to an Incorrect Geolocation or Flood Zone
There is an exception to the general reformation guidance when an error in geolocating a
property or an incorrect flood zone resulted in insufficient premium.
21
In this case, the
insurer must:
• Reduce the amount of coverage effective the date of discovery; and
• Calculate the additional premium due (to restore the original coverage amount for
the remainder of the policy term) prospectively from the date of discovery.
20. 44 CFR Part 61, Appendix A(1)-(2), VII.D “Insufficient Premium or Rating Information”; 44 CFR Part 61,
Appendix A(3), VIII.D “Insufficient Premium or Rating Information.” FEMA can provide additional underwriting
and claims guidance if a claim was already paid based on incorrect underwriting information.
21. 42 U.S.C. 4015(f).
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 25
2. Before You Start
For the portion of the policy term before the date the insurer discovered the incorrect
geolocation or flood zone (the “date of discovery”), the policyholder receives the originally
requested coverage amount without paying additional premium (or providing additional
rating information, if insufficient).
For the remainder of the policy term after the date of discovery, the general reformation
procedures described in Table 11 apply.
22
Refer to Table 14 to determine when to apply
the initial reduction in coverage, the timeframe when additional premium is due, and the
effective date of the increase to the originally requested coverage amount. Again, “within
specified timeframes” refers to receipt of additional rating information, if applicable, within
60 days and the additional premium within 30 days, as specified in Table 11.
Table 14. Reformation Timeframes and Effective Dates
When the Geolocation or Flood Zone Is Incorrect
GUIDANCE
Effective Date of Reduced Coverage Date of discovery
Timeframe When Additional Premium Applies
Remainder of the policy term after
the date of discovery
Effective Date
of Increased
Coverage
Additional Premium
(and Rating Information) Received
Within Specified Timeframes
Date of discovery
Received But NOT Within
Specified Timeframes
Only by endorsement with a 30-day
waiting period
Table 15 describes how the insurer must handle any claim when there is insufficient premium due to
an incorrect geolocation or flood zone.
23
Table 15. How to Handle a Claim Involving Policy Reformation
When the Geolocation or Flood Zone Is Incorrect
TIMING OF LOSS
Before Discovery of Insufficient Premium
After Discovery of
Insufficient Premium
The insurer must settle the claim without delay based on the
originally requested coverage amount, regardless of whether:
• The rating information is sufficient; or
• It receives additional premium for the remainder of the
policy term.
However, the insurer may, at the policyholder’s option, deduct the
additional premium due from the claim payment.
Follow the guidance in
Table 13 above.
22. However, if the premium received is insufficient to buy any amount of coverage, the policyholder does not
restore the originally requested limits, and a loss occurred before discovery of an incorrect geolocation or
flood zone, the insurer must contact FEMA for additional underwriting and claims guidance.
23. 42 U.S.C. 4015(f). FEMA can provide additional claims guidance if a claim was already paid based on
incorrect underwriting information.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 2 • 26
2. Before You Start
TIMING OF LOSS
Before Discovery of Insufficient Premium
After Discovery of
Insufficient Premium
If the flood zone was incorrect, the insurer must use the correct flood
zone for the building location when applying the SFIP’s coverage
limitations by building type and flood zone.
24
For example, if a policy
for a Post-FIRM elevated building was written incorrectly in a non-
SFHA (for example, Zone X) and at the time of loss the property was
determined to be located in an SFHA (for example, Zone AE), then
the insurer must pay the claim in accordance with the coverage
limitations applicable to the correct SFHA zone.
Table 15. How to Handle a Claim Involving Policy Reformation
When the Geolocation or Flood Zone Is Incorrect continued
24 44 CFR Part 61, Appendix A(1)-(3), III.A.8 and III.B.5
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 1
3. How To Write
The focus of this section is how to write new business. The Introduction overviews the
NFIP rating methodology and the process for new business. General Rating Information
provides guidance on the information and rating variables that FEMA’s system uses to
generate premium quotes. Condominium Rating Information elaborates on that guidance
by explaining how the policy forms and rating variables apply to various scenarios when
insuring condominium buildings. Provisional Rating Information addresses situations when
FEMA’s system is unavailable to provide premium quotes.
I. Introduction
A. Snapshot of the Risk Rating 2.0 Methodology: Equity in Action
FEMA has updated the NFIP risk rating methodology through the implementation of a
new pricing methodology called Risk Rating 2.0. FEMA developed the Risk Rating 2.0
methodology through years of collaboration with catastrophe modeling companies to
incorporate industry best practices, technology, and modeling to inform a new and better
way of identifying and pricing flood risk. The new methodology brings several benefits to
individual property owners and their communities:
• Using expert technical capability and tools allows FEMA to better assess a property’s
unique flood risk.
• This individualized, more accurate picture of risk enables FEMA to provide individuals
with easy-to-understand information about what drives their rates.
• Property owners can now make better-informed decisions on purchasing flood
insurance and reducing flood risk.
• This new methodology also provides states and local governments with a better
understanding of risk to help communities and individuals take action and mitigate.
Figure 1: Overview of Risk Rating 2.0 Data Sources and Rating Factors
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 2
3. How to Write
The Risk Rating 2.0 methodology calculates a rate based on a series of unique variables
and flood hazards for each building, rather than relying on flood zones and Base Flood
Elevations to evaluate flood risk for broad classes of properties. The Risk Rating 2.0 rating
variables can be grouped into several broad categories, outlined in Table 1 and discussed
in detail under General Rating Information below. Table 1 also outlines the other main
content in this section.
Table 1. NFIP Rating Information
CATEGORIES INFORMATION
General Rating Information
Policyholder and
Mortgagee Information
• Policyholder Information
• Mortgagee Information
Geographic Location
Variables
• Building Location
• Community Map Information and Flood Zone
• Community Rating System Discount
Structural
Variables
• Building Occupancy and Description
– Building Occupancy
– Building Description
• Construction Type
• Foundation Type
• First Floor Height
• Mitigation Discounts
– Machinery & Equipment Above First Floor
– Proper Openings
• Floodproofing
• Replacement Cost Value
– Square Footage
– Building Replacement Cost Value
• Claims History
– Prior NFIP Claims
– Severe Repetitive Loss Property
• Other Building Factors
– Date of Construction
– Number of Detached Structures on Property
– Number of Elevators
– Number of Floors in Building
– Floor of Unit
– Total Number of Units in Building
– Rental Property
– Building Over Water
– Primary Residence Status
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 3
3. How to Write
CATEGORIES INFORMATION
Coverages and
Deductibles
• Maximum Coverage Limits
• Increased Cost of Compliance (ICC) Coverage
• Deductibles
Statutory Discounts
• Newly Mapped Discount
• Pre-FIRM Discount
• Other Statutory Discounts
Assessments, Fees,
and Surcharges
• Reserve Fund Assessment
• HFIAA Surcharge
• Federal Policy Fee
• Probation Surcharge
Condominium Rating Information
Condominium Rating
Scenarios
• Condominium Rating Scenarios
– Condominium Association Coverage for Residential
Condominium Building (Scenario #1)
– Residential Unit Owner Coverage in Residential
Condominium Building (Scenario #2)
– Residential Unit Owner Coverage in Non-Residential
Condominium Building (Scenario #3)
– Condominium Association Coverage for Non-
Residential Condominium Building (Scenario #4)
– Non-Residential Unit Owner Coverage in Residential or
Non-Residential Condominium Building (Scenario #5)
• Applying the Condominium Rating Scenarios
Provisional Rating Information
Provisional Rating
• Provisional Rating
B. Process for Writing New Business
Here is a high-level summary of the process for writing new business:
• Agent – Using the insurer system, work with the prospective policyholder to complete
the Flood Insurance Application Form, determine eligibility for NFIP coverage, and
submit the information to FEMA for a quote.
• FEMA – Validate eligibility for NFIP coverage, apply geospatial and relevant third-party
data, calculate the premium, and send the quote to the insurer system.
• Agent – Apprise the prospective policyholder of the total amount due and, if they
want to proceed, collect the premium and any supporting documentation and submit
it to the insurer.
• Insurer – Validate the payment, determine the policy effective date, issue the policy
and declarations page, and report policy data to FEMA.
Table 1. NFIP Rating Information continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 4
3. How to Write
II. General Rating Information
A. Policyholder and Mortgagee Information
1. Policyholder Information
The Application Form asks several questions about the individual or entity insuring the
property. Some help ensure the correct type of coverage and policy form; others satisfy
federal reporting requirements. The information below will help to indicate the correct
“yes or no” answers to these questions.
• Is the policyholder a tenant? Does the policyholder own the building or are they a
renter? This question may help to avoid duplicate coverage by a renter/lessee and
the owner of a building. A building can have only one policy with building coverage,
which means that the tenant/lessee and owner must be named on the same policy
if the tenant/lessee has an insurable interest in the building (see the Insurable
Interest heading in Section 2: Before You Start for more information). A tenant must
always purchase contents coverage separately.
• Is the policyholder a condominium association? A condominium association is an
entity made up of condominium unit owners, responsible for the maintenance and
operation of common elements owned in undivided shares by unit owners and other
buildings, in which the unit owners have use rights, and where membership in the
entity is a required condition of ownership.
• Is the policyholder a small business? For reporting purposes, a small business is a
commercial (for-profit) enterprise having less than 100 employees total at all locations.
• Is the policyholder a non-profit entity? For reporting purposes, a non-profit entity is
an organization that has been granted tax-exempt status by the Internal Revenue
Service (IRS) because it furthers a social cause and provides a public benefit.
• Is the policy force-placed by a lender? Is this a policy that a lender obtained (force-
placed) on a building that is subject to the mandatory purchase of flood insurance
requirement but did not have flood insurance coverage? The mandatory purchase
requirement applies to buildings that have federally backed mortgages and are
located in Special Flood Hazard Areas (SFHAs).
2. Mortgagee Information
Appli
cants must provide the name, mailing address, and loan number for the first
mortgagee and, as applicable, provide any second mortgagee, loss payee, or other
information such as disaster assistance.
For condominium association applicants, do not enter the mortgagees for the individual
condominium unit owners when applying for coverage under an RCBAP. Individual
condominium unit owners submit their individual mortgagee information when applying
for unit coverage under the Dwelling Form.
B. Geographic Location Variables
1. Building Location
The building’s location informs its eligibility for NFIP flood insurance coverage,
beginning with its location in a participating NFIP community. Identifying the precise
location of a building is also essential to determining its unique flood hazards.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 5
3. How to Write
a. Property Address
A property address is required for every policy, which is usually a street address but
may be a descriptive address:
• Street Address is the best and preferred method; it includes the street
number, street name, unit or apartment number, city or county name, state,
and zip code.
• Other (Descriptive Address) – If a street address is unavailable, a descriptive
address in the form of a rural route or a legal description is acceptable.
This field also may be used when more information is needed to distinguish
between multiple buildings at the same address (see paragraph c. below).
– A rural route is one established and recognized by the United States Postal
Service for mail delivery in a country (non-urban) free delivery area.
– A legal description is a method of locating or describing land in relation to the
public land survey system. It should be used only for buildings or subdivisions
under construction or where a street address is not available. Legal descriptions
also may include the lot and block number as provided by the community; some
use metes and bounds to identify the boundaries of a property.
b. Geolocation
Typically, FEMA will successfully geolocate the provided property address. Insurers
also have the option to provide the building’s latitude and longitude. FEMA will
prompt the insurer (or agent) to submit the building’s latitude and longitude (or use
the values they already provided) to enable geolocation if either:
• FEMA cannot geocode the street address or descriptive address; or
• FEMA’s geocoding tool is unavailable.
Latitude and Longitude – Latitude denotes the north and south coordinates of
the location, and longitude measures the east and west coordinates. The insurer
(or agent) can obtain the latitude and longitude for a property from an Elevation
Certificate (EC), a flood zone determination, or one of the free geolocation services
available on the Internet. Insurers are responsible for reviewing and validating
latitude and longitude coordinates entered by agents.
Table 2. Requirements for Latitude and Longitude Coordinates
Latitude: (decimal degrees*, at least 5 decimal places, leading minus sign (−) for
south values)
Longitude: (decimal degrees*, at least 5 decimal places, leading minus sign (–)
for west values)
Datum: WGS 84 (common for phones, mapping websites, GPS) NAD 83 (less common)
• Location should be near the center of the structure or near the front door.
• Coordinates from the EC are preferred if they are available and can be supplied in the
above manner.
Example: Latitude: 38.88948 Longitude: –77.03523 Datum: WGS 84
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 6
3. How to Write
Note: If the agent needs to clarify which of multiple buildings at the address the
policyholder wants to insure, see the Multiple Buildings at the Same Address
heading below. Latitude and longitude coordinates are not a means for distinguishing
between multiple buildings at one address.
Using the property geolocation derived from street address or latitude and longitude,
FEMA can systematically determine certain rating variables, including specific flood
hazards based on the building’s distance from various flooding sources. In the rare
event that FEMA’s system is unavailable (see the latitude and longitude guidance
above for situations when only FEMA’s geocoding capability is unavailable), then the
insurer can still issue the policy using provisional rates. For more information see
the Provisional Rating Information heading later in this section.
c. Multiple Buildings at the Same Address
Specific property location information helps to ensure coverage of the correct
building when there are multiple buildings at the same address. Correct
identification of the building is especially important for proper claim adjustment
following a flood loss.
If there is more than one building at the location of the insured property, use the
Application Form’s Building Location section to clearly identify the building being
insured under this policy. For example, five buildings with the same property location
may be insured with separate policies. If necessary, use identifiers such as Building
A, B, or C, or “Smith Hall”, in the second line of the street address to distinguish the
buildings. Also select the Building Description that best corresponds to the insured
building. If there are multiple buildings at the same address and the specific building
identification is not clear, a photo of the building or a sketch showing the location of
the building on the property to be insured should be retained in the policy file. This
will help in proper identification of the insured building for the adjustment of claims,
especially for multiple non-residential buildings at the same location.
2. Community Map Information and Flood Zone
The community in which a property is located can affect certain aspects of both coverage
and rating, so it is important to obtain accurate community information. The Application
Form requires current community map information including the community number
and map panel, current flood zone shown on the map, the map date, and whether the
community is in the NFIP’s Regular or Emergency Program. See Appendix D: Flood Maps
for more detailed information on flood maps and flood zones.
FEMA expects insurers to provide map and flood zone information and validate it at the
next renewal following a map change. Although flood zones are no longer a rating element
for NFIP rates, they remain relevant to NFIP coverage and rating for several reasons:
• Federally-regulated lenders enforce the flood insurance mandatory purchase
requirement for properties located in SFHAs.
1
• Communities document and enforce compliance with local floodplain
management ordinances and laws tied to flood zones.
2
• Eligibility for Newly Mapped discounts is based in part on location inside or
outside an SFHA.
3
1. 42 U.S.C. § 4012a
2. 44 CFR Subpart A
3. 42 USC § 4015(i)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 7
3. How to Write
• Eligibility for Zone AR and Zone A99 discounts
4
is based on the process of
restoration of non-accredited flood protection systems in those zones.
• Eligibility for residential and non-residential floodproofing discounts is based in
part on flood zone.
5
• When using an EC to provide a First Floor Height value, FEMA’s guidance on which
data fields to provide on the Application Form varies depending on the flood zone.
• The NFIP insures an enclosure under a Post-FIRM elevated building if located
outside an SFHA but not if located within an SFHA.
6
• While flood zones do not directly affect eligibility for Community Rating System
discounts, rules around floodplain management violations tied to location inside
or outside an SFHA can make a property ineligible for a CRS discount.
3. Community Rating System (CRS) Discount
a. General Information
The Community Rating System (CRS) is a voluntary incentive program for
communities participating in the NFIP. The CRS offers NFIP premium discounts in
communities that develop and execute extra measures beyond minimum floodplain
management requirements to provide protection from flooding. The CRS discount
applies uniformly across the community, with the exceptions noted below.
b. Policies Ineligible for CRS Discounts
The following policies are not eligible for CRS discounts:
• Emergency Program Policies
• Group Flood Insurance Policies
• Provisionally Rated Policies
• Buildings not in compliance with community floodplain management regulations
or that have known floodplain management violations are ineligible for the CRS
premium discount. In particular, this ineligibility applies to policies for Post-
FIRM buildings located in an SFHA where the elevation difference used for
rating is at least 1 foot or more below the BFE, with the following exceptions:
– Post-FIRM V-Zone buildings with unfinished breakaway wall enclosures and
machinery or equipment at or above the BFE.
– A building with a subgrade crawlspace with certification from a community
official. The letter signed by the community official that certifies a subgrade
crawlspace exception must contain the following statement:
“I certify that the building located at has a crawlspace that was built in
compliance with the NFIP requirements for crawlspace construction as
outlined in FEMA Technical Bulletin 11-01, Crawlspace Construction for
Buildings Located in Special Flood Hazard Areas.”
FEMA maintains a list of properties that are in violation of floodplain management
standards. These properties are ineligible for the CRS discount. A policyholder
can request a change to their CRS discount eligibility status by contacting
their community Floodplain Administrator (FPA) to determine the appropriate
documentation required to show compliance (see below). Upon review of the
4. 4014(e)&(f) and Biggert-Waters Flood Insurance Reform Act of 2012, Pub. Law No. 112-141, Div. F., Title II
§ 100230; 126 Stat. 946-949 (2012), as amended
5. 42 USC § 4014(a)(1)(A)(ii); 42 U.S.C. § 4102(d); 44 CFR § 60.6(c)
6. 44 CFR Part 61, Appendix A(1)-(2), III.A.8 & B.5; 44 CFR Part 61, Appendix A(3), III.A.8 & B.4
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 8
3. How to Write
documentation and determination that the structure is compliant with the floodplain
management standards, the community FPA contacts their State NFIP Coordinator
or FEMA Regional office to remove the property from the CRS Discount Exclusion
list. Once the FEMA Regional office concurs with the community’s determination on
the violation resolution, the FEMA Regional office will contact FEMA headquarters
Floodplain Management Division to request an update to the property’s CRS
discount eligibility status.
c. CRS Classes and Discounts
The CRS recognizes measures for flood protection and flood loss reduction. The
four main activity categories include Public Information, Mapping and Regulation,
Flood Damage Reduction, and Flood Preparedness.
To participate in the CRS, a community must complete and submit an application
to FEMA. Subsequently, FEMA reviews the community’s floodplain management
efforts and assigns the appropriate CRS classification based on credit points
earned for various activities. A community’s classification may change depending
on the level of continued floodplain management efforts. Classifications range
from 1 to 10 and determine the premium discount for eligible flood insurance
policies (see Table 3 below). All community assignments begin at Class 10 with no
premium discount. Communities with a Class 1 designation receive the maximum
45 percent premium discount.
Note: If, midway through a policy term, a community’s CRS class changes or a
policy’s eligibility for a CRS discount changes, any resulting adjustment to the CRS
discount applies only at the next policy renewal.
Table 3 shows the available CRS premium discounts based on community CRS class.
Table 3. CRS Premium Discounts By Class
CLASS DISCOUNT CLASS DISCOUNT
1 45% 6 20%
2 40% 7 15%
3 35% 8 10%
4 30% 9 5%
5 25% 10 –
d. CRS Community Status Information
A list of all current CRS eligible communities and their status can be found at:
https://www.fema.gov/flood-insurance/rules-legislation/community-rating-system.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 9
3. How to Write
C. Structural Variables
1. Building Occupancy & Description
a. Building Occupancy
Building occupancy is a key factor that determines which policy form to use, which
specific rating factors apply, as well as the policy’s maximum coverage limits
and deductible options. The NFIP recognizes nine different building occupancies,
discussed in Tables 4 and 5. Table 4 explains which building occupancy to select
when buying building or contents coverage for a building or unit.
Table 4. Building Occupancy: Building or Contents Coverage for a Building or Unit
OCCUPANCY DEFINITION
Single-Family Dwelling
Single-Family
Home
A single-family building, townhouse, or rowhouse that is residential (or mixed-use with
non-residential uses limited to less than 50 percent of the building’s total oor area)
and not in condominium ownership (or not eligible for the RCBAP Form).
Notes:
• This building occupancy should not be used for a residential unit in any building
or any manufactured/mobile home or travel trailer. These occupancies are listed
separately below.
• The NFIP defines a townhouse or rowhouse as a unit of a building, divided from
similar units by solid, vertical, load-bearing walls dividing the building from its lowest
level to its highest ceiling and having no openings in the walls between units and
with no horizontal divisions between any of the units. For more information, see the
Single and Multiple Buildings heading in Section 2: Before You Start.
• Examples of non-residential uses within a residential single-family building include
an office, private school, studio, or small service operation.
• See RCBAP eligibility rules under the Condominium Rating Information heading in
this section (Scenario #1).
Residential
Manufactured/
Mobile Home
A single-family residential building (or mixed-use building with non-residential uses
limited to less than 50 percent of the building’s total oor area) that meets one of the
following denitions:
• A manufactured home (also known as a mobile home) built on a permanent
chassis, transported to a site in one or more sections, and affixed to a permanent
foundation; or
• A travel trailer without wheels, built on a chassis, affixed to a permanent foundation,
and regulated under the community’s floodplain management and building
ordinances or laws.
Residential
Unit
A single-family residential unit (or mixed-use unit with non-residential uses limited to
less than 50 percent of the unit’s total oor area) located within a:
• Residential or non-residential condominium building; or
• Residential or non-residential building not in condominium ownership (for example,
an apartment building or cooperative building); or
• Townhouse or rowhouse in condominium ownership (if insured as a unit as
opposed to an entire building). If insuring as an entire building, see the Residential
Condominium Building row below for additional information.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 10
3. How to Write
OCCUPANCY DEFINITION
Multifamily Building
Two-to-Four
Family Building
A residential building (or mixed-use building with non-residential uses limited to less
than 25 percent of the building’s total oor area) containing 2–4 units. This category
includes the following buildings (but excludes buildings where the normal occupancy of a
guest or resident is less than 6 months):
• Apartment buildings
• Assisted-living facilities
• Condominium buildings (if not eligible for the RCBAP)
• Cooperative buildings
• Dormitories
• Hotels and motels
• Rooming houses
• Tourist homes
Note: See RCBAP eligibility rules under the Condominium Rating Information heading in
this section (Scenario #1).
Other
Residential
Building
A residential building (or mixed-use building with non-residential uses limited to less
than 25 percent of the building’s total oor area) containing 5 or more units. This
category includes the following buildings (but excludes buildings where the normal
occupancy of a guest or resident is less than 6 months):
• Apartment buildings
• Assisted-living facilities
• Condominium buildings (if not eligible for the RCBAP)
• Cooperative buildings
• Dormitories
• Hotels and motels
• Rooming houses
• Tourist homes
Note: See RCBAP eligibility rules under the Condominium Rating Information heading in
this section (Scenario #1).
Residential Condominium Building
Residential
Condominium
Building
Select this building occupancy if all the following are true:
• The policyholder is a condominium association;
• The policy will insure a residential condominium building (or mixed-use
condominium building with non-residential uses limited to less than 25 percent
of the building’s total floor area) with one or more units; and
• The building is in a Regular Program community.
Notes:
• The criteria for RCBAP eligibility define the Residential Condominium Building
occupancy. The RCBAP Form must be used to insure a building that meets the
Residential Condominium Building definition. See additional information under
the Condominium Rating Information heading (Scenario #1), including what
building occupancy to select if ineligible for the RCBAP.
• When determining non-residential uses, exclude the common areas of the
building from the building’s total floor area. Exclude areas such as garages,
lobbies, recreation rooms, storage/utility rooms, and hallways when determining
residential use of a condominium building.
Table 4. Building Occupancy: Building or Contents Coverage for a Building or Unit continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 11
3. How to Write
OCCUPANCY DEFINITION
Non-Residential
Non-Residential
Building
A building where the primary use is commercial or non-habitational. This category
includes, but is not limited to the following:
• A building in which the policyholder is a commercial enterprise primarily carried out
to generate income, and the coverage is for:
– A building used as an office, retail space, wholesale space, factory, hospitality
space, or for similar uses; or
– A building not used for habitation or residential uses.
• A mixed-use building in which the total floor area devoted to non-residential uses is:
– 50 percent or more of the total floor area within the building, if a single-family
building; or
– 25 percent or more of the total floor area within the building for all other buildings.
• The following buildings where the normal occupancy of a guest or resident is less
than 6 months:
– Apartment buildings
– Assisted-living facilities
– Condominium buildings (if not eligible for the RCBAP)
– Cooperative buildings
– Dormitories
– Hotels and motels
– Rooming houses
– Tourist homes
• Other buildings not used for habitation including, but not limited to the following:
– Agricultural buildings
– Detached garages
– Non-residential condominium buildings
– Houses of worship
– Recreation buildings (including pool houses and clubhouses)
– Schools
– Storage or tool sheds
– Strip malls
• A non-residential townhouse or rowhouse.
Note: If insuring a non-residential townhouse or rowhouse in the condominium form of
ownership as a unit, select the Non-Residential Unit occupancy.
Non-Residential
Manufactured/
Mobile Building
A single-unit non-residential building (or mixed-use building in which non-residential
uses are 50 percent or more of the building’s total oor area) that meets one of the
following denitions:
• A manufactured/mobile building built on a permanent chassis, transported to a site
in one or more sections, and affixed to a permanent foundation; or
• A travel trailer without wheels, built on a chassis, affixed to a permanent
foundation, and regulated under the community’s floodplain management and
building ordinances or laws.
Table 4. Building Occupancy: Building or Contents Coverage for a Building or Unit continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 12
3. How to Write
OCCUPANCY DEFINITION
Non-Residential
Unit
A single non-residential unit (or mixed-use unit in which non-residential uses are
50 percent or more of the unit’s total oor area) within a:
• Residential or non-residential building (whether or not in condominium
ownership); or
• Townhouse or rowhouse in the condominium form of ownership (if insured as a
unit as opposed to an entire building).
Note: If insuring a non-residential townhouse or rowhouse in the condominium form of
ownership as an entire building, select the Non-Residential Building occupancy.
Table 5 explains which building occupancy to select when insuring residential or non-
residential contents on a separate policy.
Table 5. Building Occupancy: Contents Coverage on a Separate Policy
Type of
Contents Residential Building Non-Residential Building
Residential
Contents
Building Occupancy to Select:
(see guidance in Table 4 above)
• Single-Family Home
• Residential Manufactured/
Mobile Home
• Residential Unit
• Two-to-Four Family Building
• Other Residential Building
• Residential Condominium Building
Applicable Policy Form:
(based on the building occupancy selected)
• Dwelling Form
• General Property Form
Building Occupancy to Select:
(select the residential building occupancy
that best characterizes the physical form
of the non-residential building or unit the
contents are located in)
• Single-Family Home
• Residential Manufactured/Mobile
Home
• Residential Unit
Applicable Policy Form:
• Dwelling Form
Non-Residential
Contents
Building Occupancy to Select:
(select the non-residential building
occupancy that best characterizes the
physical form of the residential building or
unit the contents are located in)
• Non-Residential Building
• Non-Residential Manufactured/
Mobile Building
• Non-Residential Unit
Applicable Policy Form:
• General Property Form
Building Occupancy to Select:
(see guidance in Table 4 above)
• Non-Residential Building
• Non-Residential Manufactured/
Mobile Building
• Non-Residential Unit
Applicable Policy Form:
• General Property Form
b. Building Description
When completing the Application Form, select the Building Description that best
corresponds to the building to be insured by this policy. This is important in
specifying what type of Residential Unit is being insured, identifying whether a non-
residential building is commercial, and distinguishing multiple buildings at the same
Table 4. Building Occupancy: Building or Contents Coverage for a Building or Unit continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 13
3. How to Write
address. Table 6 below lists the different types of buildings and includes a brief
description of each. Please reference Table 4 above for additional details related to
the building description.
Table 6. Building Description Options
Building Type Description
Residential
Entire Apartment Building
A residential building containing multiple residential units that is
not in condominium or cooperative ownership.
Apartment Unit A single residential unit within an apartment building.
Entire Cooperative Building
A residential building owned by a corporation; residents buy shares
of the corporation, rather than the real estate (building, land, or
both building and land).
Cooperative Unit A shareholder’s residential unit within a cooperative building.
Detached Guest House
A secondary house that shares the building lot of a larger,
primary house.
Main Dwelling
A residential building that is the main dwelling on the property,
as opposed to any secondary dwelling such as a detached
guest house.
Entire Residential
Condominium Building
A residential building in that form of ownership in which each unit
owner has an undivided interest in common elements.
Residential Condominium Unit
(in Residential Building)
A residential condominium unit in a residential condominium
building.
Residential Condominium Unit
(in Non-Residential Building)
A residential condominium unit in a non-residential condominium
building.
Other Dwelling Type Please describe on the Application Form.
Non-Residential
Agricultural Building
A building used exclusively in connection with the production,
harvesting, storage, raising, or drying of agricultural commodities
and livestock.
Commercial
A non-habitational building, manufactured/mobile building, or unit
used as an ofce, retail space, wholesale space, hospitality space,
or for similar uses.
Detached Garage
A non-habitational, accessory building at the same property
location as a main dwelling or other building but insured separately.
Designed for storage of a motorized vehicle and used only for
parking and storage.
Government-Owned A building owned by any government entity.
House of Worship
A church, temple, synagogue, mosque, or other building set apart
primarily for the purpose of worship in which religious services are
held and the main body of which is kept for that use and not put to
any other use inconsistent with its primary purpose.
Recreation Building
A building designed for non-habitational uses and that does not
qualify as a commercial building. Examples include clubhouses
and poolhouses.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 14
3. How to Write
Building Type Description
Storage/Tool Shed
A non-habitational, accessory building designed for storage at the
same property location as the main building, and the use of which
is incidental to the use of the main building.
Other Non-Residential Type Please describe on the Application Form.
c. Manufactured/Mobile Homes
As described in Table 4 above, the Building Occupancy for manufactured/mobile
homes (including travel trailers) eligible for NFIP coverage (see the Building Eligibility
heading in Section 2: Before You Start) may be residential or non-residential,
depending on their use. Table 4 “Buildings the NFIP Insures” in Section 2 provides
eligibility criteria for manufactured/mobile homes, including specific anchoring
requirements and installation standards. In addition, the insurer must:
• Record the identification number (serial number) of the manufactured/mobile
home on the Application Form; and
• When providing the square footage of the manufactured/mobile home in the
appropriate section of the Application Form, include the square footage of any
permanent additions or extensions.
2. Construction Type
If t
he building occupancy is a Single-Family Home, determine the building’s Construction
Type based on the construction used for the wall on the building’s first floor. The
Construction Type rating factor only applies to the Single-Family Home occupancy and
does not apply to other occupancies, such as residential unit or manufactured/mobile
home. Table 7 provides guidance on how to determine the construction type.
Table 7. Construction Type Determination
Construction Type Guidance
Frame
Use Frame as the construction type when:
• The first floor above ground level is constructed with wood or
metal frame walls; or
• Other materials such as exterior brick or masonry veneer are
connected to frame construction.
Masonry
Use Masonry as the construction type when the:
• First floor above ground level is constructed with masonry including
brick, or concrete block walls for the full story;
• Building has a floor below the ground (for example a basement or
walkout basement); or
• Bottom floor is masonry and the next higher floor has frame
construction.
Other
Use Other as the construction type when:
• The first floor above ground level is constructed with materials
other than wood or metal frame walls or masonry walls for the full
story; or
• Any portion of the wall between ground level and next higher floor
is frame construction (for example, “knee walls” whose lower wall
is concrete block with frame wall on the higher portion).
Table 6. Building Description Options continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 15
3. How to Write
3. Foundation Type
FEMA recognizes six foundation type options on the Application Form. The foundation
types are:
• Slab on Grade (Non-Elevated)
• Basement (Non-Elevated)
• Elevated Without Enclosure on Posts, Piles or Piers
• Elevated With Enclosure on Posts, Piles or Piers
• Elevated With Enclosure Not on Posts, Piles, Piers (Solid Foundation Walls)
• Crawlspace (Elevated or Non-Elevated Subgrade Crawlspace)
These foundation types are described below and illustrated in Tables 8–13. Each
foundation type identifies a building as non-elevated or elevated. The foundation type
also corresponds with the Building Diagrams shown on the Elevation Certificate (EC)
form in Appendix B: Forms.
a. Non-Elevated Building
A non-elevated building is a building with a:
• Slab-on-grade foundation with wood or metal frame walls on the first floor; or
• Basement or below grade (subgrade) crawlspace foundation.
Note: A basement is any area of the building, including any sunken room or sunken
portion of a room, that has its floor below ground level (subgrade) on all sides. A
building has a subgrade crawlspace if the subgrade under-floor area is no more than
5 feet below the top of the next higher floor (living floor) and no more than 2 feet
below the Lowest Adjacent Grade (LAG) (lowest point of the ground level immediately
next to a building) on all sides.
Tables 8 and 9 describe the Slab on Grade (Non-Elevated) and Basement (Non-
Elevated) foundation types.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 16
3. How to Write
A building whose foundation is slab-on-grade or slab-on-stem-wall with fill.
Elevation Certificate
Building Diagram
Distinguishing
Features
Diagram 1A: The bottom floor is at or above ground level (grade) on at least one side.
Diagram 1B: The bottom floor is at or above ground level (grade) on at least one side
on slab-on-grade or slab-on-stem wall with fill.
Diagram 3: Split-level building; the bottom floor (excluding garage) is at or above ground
level (grade) on at least one side.
Building Indicators
• The building is constructed with wood or metal frame walls and encompasses the
full footprint of the building with a slab-on-grade foundation.
• The building is one floor with any wall type and no airspace between the ground
and lowest floor of the building. For example, a one floor building on grade with
masonry/cinder block walls.
• If slab-on-grade, there is no airspace between the ground and the lowest floor of
the building.
• This foundation type includes a building with a dual foundation. For example, an
elevated building with a crawlspace or enclosure with an attached converted garage
or attached finished room where the floor of the converted garage or attached
finished room is equal to or lower than the enclosure floor.
One floor, slab on grade Slab with attached garage
Stem wall Two floor frame wall both floors Three or more floors on slab
Table 8. Foundation Type – Slab on Grade (Non-Elevated)
Crawlspace with converted garage or
attached finished room
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 17
3. How to Write
Table 9. Foundation Type – Basement (Non-Elevated)
A non-elevated building that has a floor or any area of the building, including any sunken room or portion of a
room, below the ground level (subgrade) on all sides.
Basement building Split level with basement
Elevation Certificate
Building Diagram
Distinguishing Features
Diagram 2A: The bottom floor (basement or underground garage) is below ground
level (grade) on all sides.
Diagram 2B: The bottom floor (basement or underground garage) is below ground
level (grade) on all sides; most of the height of the walls are below ground level on
all sides and the door and area of egress is also below ground level on all sides.
Diagram 4: Split-level building; the bottom floor (basement or underground garage) is
below ground level (grade) on all sides.
Building Indicators
• The building, including split-level, has a floor that is below grade on all sides even
if the floor is used for living purposes, or as an office, garage, workshop, etc.
• If the building has a subgrade crawlspace and the distance from the crawlspace
floor to the top of the next higher floor is more than 5 feet, or the crawlspace
floor is more than 2 feet below the grade on all sides, describe the foundation
type as a basement.
Note: If the building has a “walkout basement,” refer to foundation type Elevated
with Enclosure Not Posts, Piles, Piers.
b. Elevated Building
An elevated building is a building that:
• Has no basement; and
• Has its lowest elevated floor raised above ground level by foundation walls,
shear walls, posts, piers, pilings, or columns.
Elevated buildings are generally elevated with the following elevating foundation types:
• Posts, Piles, Piers, and Columns: Reinforced masonry piers or concrete piers
or columns.
• Foundation Walls:
– Masonry walls, poured concrete walls, or precast concrete walls – regardless
of height – that extend above grade and support the weight of a building.
– Knee foundation walls below the elevated floor (in other words, foundation
walls not constructed the full height of the area between the lowest
elevated floor and the grade, with wood-frame or studs attached above the
foundation wall).
Note: The building is non-elevated if a slab foundation supports the
foundation walls.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 18
3. How to Write
• Shear Walls:
– Shear walls are for structural support and not structurally joined or enclosed
at the ends, except by breakaway walls.
– Reinforced concrete or wood shear walls used as the method of elevating
a building are normally parallel (or nearly parallel) to the expected flow of
floodwaters.
Table 10 describes the Elevated Without Enclosure on Posts, Piles, or Piers
foundation type.
Table 10. Foundation Type – Elevated Without Enclosure on Posts, Piles, or Piers
A building that has its lowest floor raised above the ground by posts, piles, piers, columns,
or parallel shear walls with no enclosure below the lowest elevated floor.
Elevated no enclosure Elevated hanging floor Elevated with lattice
Elevated with utility chase Mobile home with skirting
Elevation Certificate
Building Diagram
Distinguishing Features
Diagram 5: The area below the elevated floor is open, with no obstruction to flow of
floodwaters (open lattice work and/or insect screening is permissible).
Building Indicators
• Hanging floors are walled-in floor areas beneath an elevated building that do not
extend to the ground. The top of the hanging floor is considered the first floor.
• A mobile home with skirting around frame perimeter.
• FEMA does not consider a small enclosed area (a utility chase) below the lowest
floor to be an enclosure if all the following criteria are met:
– It is the minimum size necessary to protect the building utilities (for example,
plumbing, pipes, wiring, HVAC supply/return lines);
– It is constructed with flood-damage-resistant materials;
– There are no mechanical or electrical equipment inside the enclosed area; and
– There is not enough space for a person to enter into the enclosed area.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 19
3. How to Write
c. Elevated Building with an Enclosure
Other elevated buildings have enclosures under the lowest elevated floor.
i. Definition of an Enclosure
An enclosure is that portion of an elevated building below the lowest elevated
floor that is either partially or fully enclosed by rigid walls. The following are
examples of enclosures:
• A garage, storage, or utility room below the elevated floor of an
elevated building.
• A garage, storage, or utility room attached and next to an elevated building
with the enclosure floor lower than the elevated floor.
• An enclosed crawlspace below the lowest elevated floor.
ii. Enclosure Wall Types
An enclosure may be enclosed with any of the following:
• Solid wood frame walls
• Masonry walls
• Breakaway walls
Note: Enclosures enclosed with insect screening with no additional support,
plastic lattice, or wooden or plastic slats or shutters are treated as no enclosure.
See Table 10: Elevated Without Enclosure.
Tables 11 and 12 describe the Elevated With Enclosure on Posts, Piles, or Piers and
Elevated With Enclosure Not on Posts, Piles, or Piers foundation types.
Table 11. Foundation Type – Elevated With Enclosure on Posts, Piles, or Piers
(With an Enclosure Below the Elevated Floor)
A building that has its lowest floor raised above the ground by posts, piles, piers, columns,
or parallel shear walls with an enclosure below the elevated floor.
Elevated with a garage Elevated with a bedroom below the
elevated oor
Elevated on posts, piles, or piers
with a properly vented partial
enclosure
Elevation Certificate
Building Diagram
Distinguishing Features
Diagram 6: The area below the elevated floor is enclosed, either partially or fully,
with or without openings present in the walls of the enclosure.
Building Indicators
• The building is elevated on piers, posts, piles, columns, or parallel shear walls
and there is an enclosed storage area or garage below the elevated floor.
• The building is elevated on piers, posts, piles, columns, or parallel shear walls
and there is a finished area (for example, a bedroom or bathroom) below the
elevated floor.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 20
3. How to Write
A building that has its lowest floor raised above the ground by foundation walls
(solid perimeter walls) with a full floor enclosure.
Walkout Basement Two oor building with a full oor
solid perimeter foundation for the
rst story and a frame construction
for the second oor.
Elevation Certificate
Building Diagram
Distinguishing Features
Diagram 7: The area below the elevated oor is enclosed, either partially or fully, with
or without openings present in the walls of the enclosure. The building is elevated on
full-story foundation walls.
Building Indicators
• The building may have a walk-out level, where at least one side is at or
above grade.
• The principal use of the building is located on the elevated floors of
the building.
• The building has no basement (no portion of the building is below the ground
on all sides). If the building has a floor below the ground on all sides refer to
the Basement or Crawlspace foundation types.
d. Crawlspace – Elevated and Non-Elevated
Table 13 describes the Crawlspace (Elevated or Non-Elevated Subgrade Crawlspace)
foundation type, which includes both elevated and non-elevated buildings.
Table 13. Foundation Type – Crawlspace (Elevated or Non-Elevated Subgrade Crawlspace)
A building that has its lowest floor raised above the ground by a crawlspace.
Crawlspace with attached garage Subgrade crawlspace Subgrade crawlspace with
attached garage
Table 12: Foundation Type – Elevated with Enclosure Not On Posts, Piles, or Piers
(Solid Foundation Walls)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 21
3. How to Write
A building that has its lowest floor raised above the ground by a crawlspace.
Elevation Certificate
Building Diagram
Distinguishing Features
• Diagram 8: The area below the first floor is enclosed by solid or partial
foundation perimeter walls. If the building has an above grade crawlspace, the
crawlspace floor is no more than 5 feet below the top of the next higher floor
above the crawlspace. If the difference between the crawlspace floor and floor
above the crawlspace is more than 5 feet, then refer to Diagram 7 (Elevated
with Enclosure Not on Posts, Piles, or Piers).
• Diagram 9: The bottom (crawlspace) floor is at or below ground level (grade) on
all sides. If the building has a subgrade crawlspace, the crawlspace floor must
be within 2 feet below the grade and the crawlspace floor is no more than 5 feet
below the top of the next higher floor (above the crawlspace). If the difference
between the crawlspace floor and floor above the crawlspace is more than 5
feet, or if the crawlspace floor is more than 2 feet below the grade, then refer to
Diagram 2 (Basement).
Note: An elevated building that has a crawlspace foundation with an attached slab-
on-grade nished room or attached slab-on-grade garage converted to a living area
is considered the Slab on Grade foundation type.
Building Indicators A building with a crawlspace foundation may have an attached garage.
4. First Floor Height
a. General Information
The First Floor Height, or the height of the building’s first lowest floor above the
adjacent grade, is another rating variable critical to understanding flood risk.
Generally, the higher the elevation of a building’s first floor, the less flood damage it
is likely to incur. Table 14 shows what floor the NFIP uses for the First Floor Height
measurement based on the foundation type selected.
Table 14. First Floor Height Measurement by Foundation Type
Foundation Type
EC Diagram
Number
Floor Used for First Floor
Height Measurement
Slab on Grade (Non-Elevated)
1A, 1B,
and 3
First floor of the building
Basement (Non-Elevated)
2A, 2B,
and 4
First floor above the basement
Table 13. Foundation Type – Crawlspace (Elevated or Non-Elevated Subgrade Crawlspace) continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 22
3. How to Write
Foundation Type
EC Diagram
Number
Floor Used for First Floor
Height Measurement
Elevated without Enclosure on
Posts, Piles, or Piers
5 First elevated floor
Elevated with Enclosure on
Posts, Piles, or Piers
6
Use the enclosure floor if:
• Pre-FIRM building (any zone);
• In a Non-Special Flood Hazard
Area; or
• In Zone Unnumbered A, A99, AO,
AR/AO or Unnumbered V.
Use the elevated floor:
• Post-FIRM building; and
• In Zones A1–A30, AE, AH, AR, AR/A,
AR/AE, AR/AH, AR/A1–A30, V1–V30,
or VE
Elevated with Enclosure Not on
Posts, Piles, or Piers
(Solid Foundation Walls)
7
Use the enclosure floor if:
• Pre-FIRM building (any zone);
• In a Non-Special Flood Hazard
Area; or
• In Zones Unnumbered A, A99, AO,
AR/AO or Unnumbered V.
Use the elevated floor:
• Post-FIRM building; and
• In Zones A1–A30, AE, AH, AR, AR/A,
AR/AE, AR/AH, AR/A1–A30, V1–V30,
or VE.
Crawlspace (Elevated or Non-
Elevated Subgrade Crawlspace)
8 or 9
Use the crawlspace floor if:
• Pre-FIRM building (any zone);
• In a Non-Special Flood Hazard
Area; or
• In Zones Unnumbered A, A99, AO,
AR/AO or Unnumbered V.
Use the floor above the
crawlspace if:
• Post-FIRM building; and
• In Zones A1–A30, AE, AH, AR, AR/A,
AR/AE, AR/AH, AR/A1–A30, V1–V30,
or VE.
Table 14. First Floor Height Measurement by Foundation Type continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 23
3. How to Write
The First Floor Height is determined by FEMA, or the policyholder has the option to
provide an EC. If the policyholder provides an EC, FEMA’s system will compare both
values and use the First Floor Height that is more favorable to the policyholder.
b. FEMA Determined First Floor Height
FEMA will determine a First Floor Height value using application information and
various datasets.
c. Elevation Certificate/Land Survey
The policyholder can optionally provide an EC (or land survey completed by a licensed
engineer) to provide data for a First Floor Height value. Table 14 and 15 show the
steps to take when completing the First Floor Height Determination portion of the
Application Form as well as how to determine the elevations to use when calculating
the First Floor Height. All ECs and land surveys must be certified and accompanied
by photographs. See additional documentation requirements below.
Table 15 shows the elevation in Section C of the NFIP EC form (see Appendix B:
Forms) to report as the Lowest Floor Elevation (LFE). The building’s First Floor Height
is the difference between the reported LFE and the Lowest Adjacent Grade (LAG).
Table 15. Completing the Application Form Using Section C of the
Elevation Certificate (EC)
STEP GUIDANCE
1. Enter the EC date
2. Enter the Building Diagram Number (section A7. of the EC)
3. Enter the LAG (section C2f. of the EC)
4. Enter the LFE. See below for guidance.
Determine the Lowest Floor Elevation (LFE) Using Section C of the EC
EC Diagram Number and Scenario Elevation to Report as the LFE
EC Diagram Number: 1A, 1B, 3 or 5
Scenario: Non-elevated building on slab or
elevated without an enclosure.
C2a. = LFE
If C2a. is not provided C2c. can be used:
Add 1 foot to C2c. (for both residential and
non-residential buildings)
C2c. + 1 = LFE
EC Diagram Number: 2, 2B, or 4
Scenario: Non-elevated building with basement.
C2b. = LFE
If C2b is not provided 8 feet can be added to
C2a.: Add 8 feet to C2a
C2a. + 8 = LFE
EC Diagram Number: 6, 7, 8 or 9
Scenario: Elevated building with an enclosure
or building with a crawlspace (elevated or non-
elevated subgrade crawlspace) and
• Is Pre-FIRM (in any zone); or
• In a Non-Special Flood Hazard Area; or
• In Zone Unnumbered A, A99, AO, AR/AO or
Unnumbered V.
C2a. = LFE
If C2a. is not provided C2c. can be used:
Add 1 foot to C2c. (for both residential and
non-residential buildings)
C2c. + 1 = LFE
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 24
3. How to Write
STEP GUIDANCE
Determine the Lowest Floor Elevation (LFE) Using Section C of the EC
EC Diagram Number and Scenario Elevation to Report as the LFE
EC Diagram Number: 6, 7, 8 or 9
Scenario: Elevated building with an enclosure
or building with a crawlspace (elevated or non-
elevated subgrade crawlspace) and
• Is Post-FIRM; and
• In Zone A1–A30, AE, AH, AR, AR/A, AR/AE,
AR/AH, AR/A1–A30, V1–V30, or VE.
C2b. = LFE
If C2b. is not provided C2c. can be used:
Add 1 foot to C2c. (for both residential and
non-residential buildings).
C2c. + 1 = LFE
5. Enter the First Floor Height (FFH) in feet. The FFH is the difference between the LAG and LFE.
Section E of the NFIP EC form (see Appendix B: Forms) can also be used to
determine a First Floor Height value. Table 16 provides guidance on how to use
Section E to determine First Floor Height. E1b. in Section E is the difference
between the top of the bottom floor and the LAG and can be used as the First Floor
Height if the floor is above the grade. E2 can also be used in certain situations.
Refer to the guidance below.
Note: If Section E is completed for zones other than unnumbered A and AO, the
information should be used for underwriting purposes only.
Table 16. Completing the Application Form Using Section E
of the Elevation Certificate (EC)
STEP GUIDANCE
1.
Enter the EC date.
2.
Enter the Building Diagram Number (section A7. of the EC).
3.
Enter the First Floor Height. See below for guidance.
Determine the First Floor Height (FFH) Using Section E of the EC
EC Diagram Number and Scenario Field to Report as the FFH
EC Diagram Number: 1A, 1B, 3 or 5
Scenario: Non-elevated building on slab or elevated
without an enclosure.
E1b. = FFH
EC Diagram Number: 2, 2B, or 4
Scenario: Non-elevated building with basement.
E2. = FFH
Table 15. Completing the Application Form Using Section C of the
Elevation Certificate (EC) continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 25
3. How to Write
STEP GUIDANCE
Determine the First Floor Height (FFH) Using Section E of the EC
EC Diagram Number and Scenario Field to Report as the FFH
EC Diagram Number: 6, 7, 8 or 9
Scenario: Elevated building with an enclosure or
building with a crawlspace (elevated or non-elevated
subgrade crawlspace) and
• Is Pre-FIRM (in any zone);
• In a Non-Special Flood Hazard Area; or
• In Zone Unnumbered A, A99, AO, AR/AO or
Unnumbered V.
E1b. = FFH
EC Diagram Number: 6, 7, 8 or 9
Scenario: Elevated building with an enclosure or
building with a crawlspace (elevated or non-elevated
subgrade crawlspace) and
• Is Post-FIRM; and
• In Zone A1–A30, AE, AH, AR, AR/A, AR/AE, AR/
AH, AR/A1–A30, V1–V30, or VE.
E2. = FFH
d. Additional Information on Elevation Certificates or Land Surveys
i. Documentation Required
• EC or survey signed by a licensed surveyor.
– The surveyor, engineer, or architect must sign and include their
identification number or seal in Section D or on the land survey.
– A building official, a property owner, or an owner’s representative may
provide the EC for all flood zones by completing Section E. The property
owner or owner’s representative must complete Section F when they
prepare the EC.
• Photographs that show the front and rear of the building, including the
building foundation type.
– Photograph Requirements:
> A minimum of two clear/legible photographs that show the front and back
of the building.
> Photographs dated within 90 days of submitting the EC to the insurer (not
the certification date, if that date is earlier).
> Photographs must be at least 3” × 3” and may be analog (film) or digital.
The NFIP prefers color photographs.
– Building under construction:
> Photographs are not required when the building is under construction.
> A revised EC or survey based on finished construction elevations with
photographs is required when the construction is complete.
Table 16. Completing the Application Form Using Section E
of the Elevation Certificate (EC) continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 26
3. How to Write
ii. Other Elevation Information
• Existing documentation containing elevation information (for example, an
older EC form, or surveyor letterhead) may transfer to Section C or E of
the EC.
– If Section C is completed, only a local official authorized by law or
ordinance to administer the community’s floodplain management
ordinance may complete this transaction.
– The official must certify the information and provide a statement
documenting the transfer of information in Section G of the EC.
• If Section C is completed, NFIP requires the LAG and diagram number for all
new business.
• For all flood zones, a building official, a property owner, or an owner’s
representative may provide the information in Sections B and E on the EC.
• In CRS communities, building elevation information and certificates may be
available through the community.
iii. Troubleshooting
• Fields not applicable to the surveyed property should be marked as N/A
(not applicable)
• If Section C is completed, the policyholder or policyholder’s representative
must return the EC to the surveyor, engineer, architect, or community official
completing the form to provide missing information in any part of Section A
or C of the EC.
• The building elevation information contained in Section C (Survey Required)
appears in feet, except in Puerto Rico, where it appears in meters.
Before calculating the elevation difference, convert all metric elevation
measurements to feet (1m = 3.28084 ft.).
• Section C2a. of the EC may remain blank if the surveyor, engineer, or
architect cannot gain access to the crawlspace to obtain the elevation of the
crawlspace floor. Preparers should enter the estimated measurements in the
comments area of Section D.
• Section E, Building Elevation Information (Survey Not Required) marked
“for Zone AO and Zone A (without BFE)” can be used in all flood zones for
rating purposes.
– Preparers must compute and enter the elevation differences between the
lowest floor and the LAG along with lowest floor and Highest Adjacent
Grade (HAG).
– If Section E is completed for zones other than unnumbered A and AO, the
information can be used for rating purposes only and does not relate to
floodplain management requirements.
e. First Floor Height Used
The final two fields of the First Floor Height Determination portion of the Application
Form are completed by FEMA’s system when the quote is returned to the insurer.
• First Floor Height Used (In Feet). FEMA’s system will recognize the highest value
between the FEMA Determined FFH and the EC FFH, enter it in this field, and
use that value for rating purposes.
• Method Used to Determine First Floor Height. FEMA’s system will enter either
FEMA Determined or Elevation Certificate depending on which returned the
highest FFH value.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 27
3. How to Write
5. Mitigation Discounts
FEMA offers certain mitigation discounts to incentivize a policyholder to take steps that
meaningfully reduce their property’s flood risk.
a. Machinery and Equipment Above First Floor
Policyholders may receive a mitigation discount if certain covered Machinery and
Equipment (M&E) servicing the building, inside or outside the building, is elevated
to at least the elevation of the floor above the building’s first floor. Depending on
the foundation type option selected, the building’s first floor may be either the main
living floor (if slab on grade), basement floor, crawlspace floor, or enclosure floor.
See Table 17 below which provides examples of where the M&E should be located to
be eligible for the discount.
If the policyholder purchased building-only coverage, the following M&E must be
elevated to receive the discount:
• Central air conditioner (including exterior compressor)
• Furnace
• Heat pump (including exterior compressor)
• Hot water heater
• Elevator machinery and equipment
If the policyholder purchased contents-only coverage, the following appliances must
be elevated to receive the discount:
• Clothes washers and dryers
• Food freezers
If the policyholder purchased both building and contents coverage, all the M&E and
appliances listed above must be elevated to receive the discount.
Select Yes on the Application Form under the question “Is the Building Eligible for
the Machinery and Equipment Mitigation Discount?” if the M&E is elevated consistent
with the guidance above and in Table 17, which provides examples of where the M&E
should be located to be eligible for the discount.
Table 17. M&E Location for Discount Eligibility
Diagram Showing Location Guidance on Location
Slab on Grade (Non-Elevated)
• One floor: Elevated at least to the height of
the attic
• More than one floor: Elevated to the height
of the second floor or higher
Basement (Non-Elevated)
• Elevated to the height of the floor above
the basement or higher
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 28
3. How to Write
Diagram Showing Location Guidance on Location
Elevated Without Enclosure on Posts,
Piles or Piers
• Elevated to the height of the lowest
elevated floor or higher
Elevated With Enclosure on Posts,
Piles or Piers
• Elevated to the height of the lowest
elevated floor or higher
Elevated With Enclosure Not Posts,
Piles or Piers
• Elevated to the height of the lowest
elevated floor or higher
Crawlspace (Elevated or Non-Elevated
Subgrade Crawlspace)
• Elevated to the height of the floor
above the crawlspace or higher
b. Proper Flood Openings
i. Proper Flood Openings Discount Requirements
Proper flood openings (flood vents) in enclosures or crawlspaces allow the
hydrostatic flood forces on the walls to equalize and minimize foundation
damage to the building. FEMA provides a discount for buildings, in any flood
zone, with proper flood openings in enclosures.
Below are the foundation types that may be eligible to receive the proper flood
openings discount:
• Elevated With Enclosure on Posts, Piles or Piers
• Elevated With Enclosure Not Posts, Piles or Piers (Solid Foundation Walls)
• Crawlspace (Elevated or Non-Elevated Subgrade Crawlspace)
Table 17. M&E Location for Discount Eligibility continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 29
3. How to Write
To obtain the proper flood opening discount, all enclosures below the elevated
floor must meet the following requirements:
• There must be a minimum of two openings positioned on at least two
exterior walls. For partially subgrade floors, there must be a minimum of two
openings positioned on a single exterior wall adjacent to the lowest grade
next to the building.
• The bottom of all openings must be no higher than one foot above the higher
of the exterior or interior adjacent grade or floor immediately below the
openings.
• The openings must have a total net area of not less than one square inch for
every one square foot of enclosed area.
The Application Form asks several questions to guide the policyholder’s eligibility
to receive the Proper Flood Openings discount.
• Is the enclosure/crawlspace constructed with proper flood openings
or engineered openings? Select Yes, if the enclosure or crawlspace is
constructed with flood openings or engineered openings. Select No, if the
enclosure or crawlspace is not constructed with proper flood openings or
engineered openings.
• If Yes, enter the total number of flood openings. Enter the number of flood
openings located in the enclosure or crawlspace. There must be a minimum
of two openings positioned on at least two exterior walls and the bottom of
all openings are no higher than one foot above the higher of the exterior or
interior adjacent grade or floor immediately below the openings.
• Total area of all permanent openings (in square inches). Enter the total square
inches of openings.
• Total enclosed area (in square feet). Enter the total square footage of the
entire enclosed area.
ii. Engineered Openings Certified by a Design Professional
An alternative to the proper openings requirement is engineered openings.
Engineered openings can be used to obtain the proper flood opening discount.
If used, the policyholder must provide to the insurer a copy of the certification
validating that the openings meet NFIP requirements. NFIP Technical Bulletin 1,
“Requirements for Flood Openings in Foundation Walls and Walls of Enclosures”
provides technical guidance for these requirements.
The certification statement must identify the building with the installed
engineered openings and include:
• The design professional’s name, title address, type of license, license
number, the state issuing the license, and the signature and applied seal of
the certifying registered design professional;
• A statement certifying that the design of the openings will automatically
equalize hydrostatic flood loads on exterior walls by allowing for the
automatic entry and exit of floodwaters; and
• A description of the range of flood characteristics tested or computed for
which the certification is valid, such as rates of rise and fall of floodwaters.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 30
3. How to Write
iii.
Engineered Openings Certified by the International Code Council Evaluation Service
Engineered openings identified by the International Code Council Evaluation
Service, Inc., can be used to satisfy the proper opening requirements and receive
the proper flood opening discount. The International Code Council Evaluation
Service publishes an evaluation report for each specific engineered opening
product (make and model) that it certifies, specifying the square footage of
the area for which it is certified. If these openings are used, documentation to
confirm the installation and model number of the opening is required. Reference
the evaluation report information to confirm whether the engineered openings
satisfy the proper openings requirement. Examples of documentation that can be
used are:
• Documentation to confirm installation should specify the number of openings
installed, the square footage of the area for which they are certified, and the
model number of the engineered opening; or
• An EC that has information confirming the use of engineered openings.
6. Floodproofing
a. General Information
Floodproofing may be an alternative to elevating a building to or above the BFE;
however, the NFIP requires a Floodproofing Certificate to consider floodproofing
mitigation measures in rating a building (see Appendix B: Forms). Certified
floodproofing may result in a lower premium because floodproofing ensures:
• A watertight building;
• Waterproof non-collapsing walls; and
• The floor at the base of the floodproofed walls will resist flotation
during a flood.
Once approved, the floodproofing discount is incorporated in the building and
contents premium.
b. Application Form
The application form must indicate whether an applicant is eligible for the
floodproofing discount through the response to this question:
• Is the building properly floodproofed?
Answer Yes when the building meets the eligibility requirements listed in Table 18.
For Non-Residential buildings that indicate Yes, FEMA must approve eligibility, so
the initial policy may not include the discount. If FEMA approves the floodproofing
discount, the insurer must endorse the policy to reflect the premium change.
Table 18. Eligibility for a Floodproofing Discount
Type Eligibility Criteria Notes
Residential
7
Floodproong a residential building may qualify
the policy for a oodproong discount if all the
following apply:
• The building’s foundation type is
Basement (Non-Elevated);
• The NFIP insurer is responsible
for determining eligibility for the
residential floodproofing discount
7. 42 U.S.C. 4014(a)(1)(A)(ii); 42 U.S.C. 4102(d); 44 CFR 60.6(c)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 31
3. How to Write
Type Eligibility Criteria Notes
Residential
continued
• The building is located in an NFIP
participating community where FEMA
approved the residential basement
floodproofing premium discount;
• The building is located in zone A1–A30,
AE, AR, AR Dual, AO, AH, or A with a BFE;
• A registered professional engineer or
architect certified that the building is
floodproofed to at least one foot above
the BFE; and
• Refer to fema.gov/floodplain-
management/manage-risk for additional
eligibility criteria.
If an existing policy for a residential building
located in a community approved for the
residential basement oodproong discount
received the discount before the property
was remapped into a ood zone that doesn’t
qualify for oodproong (for example a
V zone), then the policyholder loses the
discount when the insurer validates the zone
upon the next renewal.
• Refer to https://www.fema.
gov/floodplain-management/
manage-risk/residential-
buildings-basements for the list
of communities approved for
residential basement floodproofing.
• The insurer must maintain a
completed NFIP Residential Basement
Floodproofing Certificate and at least
two photographs of the building to
obtain a floodproofing discount.
Non-
Residential
Floodproong a Non-Residential Building may
qualify the policy for a oodproong discount if
all the following apply:
• The building’s foundation type is Slab
on Grade (Non-Elevated) or Basement
(Non-Elevated);
• The building is located in zone A1–A30,
AE, AR, AR Dual, AO, AH, or A with a BFE;
• The building is in any participating NFIP
community; and
• A registered professional engineer or
architect certifies that the building is
floodproofed to at least one foot above
the BFE.
• The insurer must submit
the required floodproofing
documentation listed below so
FEMA can determine eligibility
for a floodproofing discount.
The insurer must submit the
documentation through Pivot–
UCORT.
• If the policy is issued without
the floodproofing discount
and FEMA approves the
floodproofing discount, then the
insurer must endorse the policy
to reflect the premium change.
• Use the Floodproofing
Certificate date in place of the
EC date on the Application.
• The insurer must validate
floodproofing documentation
annually.
c. Documentation Requirements for Non-Residential Floodproofing
The insurer must submit the following floodproofing documentation through Pivot-
UCORT so FEMA can determine eligibility for a floodproofing discount:
• Completed Application Form;
• Completed EC;
• Completed NFIP Floodproofing Certificate for Non-Residential Structures;
Table 18. Eligibility for a Floodproofing Discount continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 32
3. How to Write
• At least two photographs of the building that show the floodproofing measures
in place, including:
– Photographs of the exterior of the building (all sides);
– Photographs of the components used to provide floodproofing protection
(shields, gates, barriers); and
• Flood Emergency Plan that includes:
– Chain of command;
– Notification procedures;
– Personnel duties;
– Location of floodproofing components, install procedures, repair procedures;
– Evacuation procedures for building occupants;
– Component maintenance procedures during flooding event;
– Drill and training program (at least once a year);
– Regular review and update of Flood Emergency Plan; and
• Inspection and Maintenance Plan that includes:
– Inspection procedures for the entire floodproofing system: wall systems,
floor slab, openings, floodproofing components, valve operation, drainage
and pump systems, equipment and tools required to engage floodproofing
measures; and
– Regular review and update of the Inspection and Maintenance Plan.
7. Replacement Cost Value
Replacement cost value information such as square footage and Building Replacement
Cost Value apply to building coverage only and is not required for contents-only policies.
a. Square Footage
FEMA uses square footage to inform Building Replacement Cost Value. For certain
building occupancies (see Section 6.B.ii below), the documentation requirements
depend on the building’s square footage total.
The percentage of total floor area determines the appropriate building occupancy
to select and is not calculated in the same method as square footage. Follow the
guidelines in Table 19 to determine the building’s square footage.
Table 19. Square Footage Calculation
Building Occupancy Guidance
Single-Family Home,
Residential Manufactured/
Mobile Home, Residential
Unit, and Two-to-Four
Family Building
Provide the total nished living area. Do not include the following
areas in the square footage calculation:
• Any garage area;
• Basement or enclosure area; or
• Porches or decks.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 33
3. How to Write
Building Occupancy Guidance
Other Residential Building,
Residential Condominium
Building, Non-Residential
Building, Non-Residential
Manufactured/Mobile
Building, Non-Residential
Unit
Provide the square footage of the building:
• Include stairwells and elevator shafts.
• Do not include areas such as basements and mezzanines.
• If all of the floors are the same size, first calculate the ground
floor area; then compute gross floor area by multiplying the
ground floor area by the total number of floors.
• If the floor sizes vary, calculate each floor’s area, then provide
the sum of all floors.
Note: For a unit policy, provide the square footage for the unit and not the entire
building.
b. Building Replacement Cost Value
Bu
ilding Replacement Cost Value is the cost to replace the building or unit (including,
for a building, the cost of the foundation). The ratio of building coverage selected to
Building Replacement Cost Value is a rating factor. The Building Replacement Cost
Value used for rating does not affect the building replacement cost determined at
time of loss.
The Building Replacement Cost Value used for rating has no bearing on the amount
of coverage a policyholder can select. However, if a policyholder selects building
coverage above the Building Replacement Cost Value (as determined by FEMA or
provided to FEMA), then the building coverage amount selected by the policyholder
will be used as the Building Replacement Cost Value in determining the premium.
i. Occupancy Type: Single-Family Home, Residential Manufactured/Mobile Home,
Residential Unit, and Two-to-Four Family Building
FEMA will determine Building Replacement Cost Value for the building or unit
by using Application Form data and insurance industry data connected with the
property address. If FEMA is unable to determine the Building Replacement
Cost Value, the insurer must obtain the Building Replacement Cost Value for
the building or unit (including, for a building, the cost of the foundation) based
on appraisals commonly used in the insurance industry, and report it on the
Application Form. FEMA reassesses its determination of Building Replacement
Cost Value at every renewal.
ii.
Occupancy Type: Other Residential Building, Residential Condominium Building,
Non-Residential Building, Non-Residential Manufactured/Mobile Building, Non-
Residential Unit
FEMA will not determine the Building Replacement Cost Value for these building
occupancies. The insurer must obtain the Building Replacement Cost Value for
the building or unit (including, for a building, the cost of the foundation) based on
appraisals commonly used in the insurance industry. The insurer must maintain
supporting documentation of the Building Replacement Cost Value. The insurer
must validate the Building Replacement Cost Value information at least every
3 years. See the sample Building Replacement Cost Value notification letter in
Appendix I: Policyholder Communications.
Table 19. Square Footage Calculation continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 34
3. How to Write
Supporting Building Replacement Cost Value documentation is not required if:
• The building occupancy is Non-Residential Manufactured/Mobile Building;
• The building description is either Storage/Tool Shed or Detached Garage; or
• The building or unit’s square footage is less than 1,000 square feet.
8. Claims History
The claims history used in the RR 2.0 rating methodology is the history of NFIP claim
payments for loss or damage to insured property directly caused by a flood, or for loss
avoidance measures. The claims history applies to a building’s property address and
does not follow the policyholder or building owner.
a. Prior NFIP Claims
i. General Information
FEMA incorporates prior NFIP claims as a rating factor based on the number
of loss dates that fall within a rolling 20-year window before the current policy
effective date. The rating factor begins to apply at the renewal date following the
first flood claim processed after the policy is rated under the NFIP’s Risk Rating
2.0 methodology. See Table 20 for examples illustrating how the prior NFIP claims
rating factor applies.
Table 20. Applying the Prior NFIP Claims Rating Factor
TOPIC EXAMPLES
Rolling 20-Year Window
The policy effective date is October 31, 2022–2023:
• The 20-year window will begin on October 31, 2002.
Initial Implementation
of the Prior NFIP Claims
Rating Factor
The policy effective date is October 31, 2022–2023:
• The property has a loss history of two claims (processed in
2003 and 2014); and
• New flood claim processed in February 2023.
The implementation of the prior NFIP claims rating factor will
begin on the October 31, 2023–24 renewal term.
The prior NFIP claims rating factor counts any date of loss with a paid claim
regardless of payment amount with the following exceptions:
• Claims made within 10 days of each other will be counted as one claim
(loss date); and
• One claim (loss date) that falls within the rolling 20-year window.
Note: The prior NFIP claims rating factor does not consider an Increased Cost
of Compliance (ICC) claim payment or a date of loss where the claim was closed
without payment.
When FEMA designates a property as Severe Repetitive Loss (SRL), an SRL rating
factor applies until the first flood claim processed after the policy is rated under
the NFIP’s Risk Rating 2.0 methodology. The rating factor applied then changes
from SRL to prior NFIP claims at the renewal date following that date of loss.
Please see below for additional information on the SRL rating factor.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 35
3. How to Write
ii. Correcting or Updating NFIP Claims History
The policyholder may dispute the property’s claims history if the policyholder
believes that the number of claims used in applying the prior NFIP claims
rating factor is inaccurate. The policyholder may also request that FEMA
update the property’s claims history if mitigation has occurred to reduce its
future flooding potential.
Documentation that may be required to correct or update a property’s claims
history includes:
• Invalid Claim History Association
– Incorrectly linked addresses and/or losses; or
– A second address added to a Property Locator Record.
• Mitigation Action (Refer to https://www.fema.gov/floodplain-management/
manage-risk/document-library for NFIP floodplain management standards to
reset NFIP claims history.)
– EC based on finished construction of the new or improved building (if the
building was mitigated in a Special Flood Hazard Area);
– Photographs of the building before the improvement;
– Photographs of the building after the improvement;
– Photographs of the flood vents/openings (if applicable);
– Source of funding for the mitigation action (state, local or individual);
– Demolition permit (if the building was demolished and rebuilt);
– Building permit (if the building was elevated or rebuilt); and
– In Zone B, C, or X, a signed statement from a community official that
shows mitigation was approved by the community.
Required documents should be sent via email to: NFIPUnderwritingMailbox@
fema.dhs.gov.
FEMA notifies the policyholder and agent of record regarding the review results
when completed. If FEMA agrees to correct or update the property’s claims
history, FEMA will reevaluate the prior NFIP claims rating factor accordingly.
If FEMA determines that the building was brought into compliance with NFIP
minimum floodplain management standards, then FEMA will reset the prior claims
count to zero at the next renewal.
b. Severe Repetitive Loss Property
FEMA designates as Severe Repetitive Loss (SRL) any NFIP-insured building:
• That has incurred flood-related damage for which four or more separate claims
payments have been made, with the amount of each claim (including building
and contents payments) exceeding $5,000, and with the cumulative amount of
such claims payments exceeding $20,000; or
• For which at least two separate claims payments (building payments only) have
been made under such coverage, with the cumulative amount of such claims
exceeding the market value of the building.
In both instances, at least two of the claims must be within 10 years of each other,
and claims made within 10 days of each other will be counted as one claim. In
determining SRL status, FEMA considers the loss history since 1978, or from the
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 36
3. How to Write
building’s construction if it was built after 1978, regardless of any changes in the
ownership of the building.
A building designated as SRL will incur an SRL rating factor. However, once the
first flood claim is processed after the policy is rated under the NFIP’s Risk Rating
2.0 methodology, the rating factor will change from SRL to prior NFIP claims at the
renewal date following the loss. The prior NFIP claims rating factor will apply based
on the guidance noted above. This change in the rating factor does not impact the
building’s SRL designation or policy servicing with the Special Direct Facility.
Please see Appendix F: Severe Repetitive Loss Properties for additional information
on SRL properties, including the Special Direct Facility that services SRL properties
and how to correct or update a property’s SRL designation. Neither the SRL rating
factor nor prior NFIP claims rating factor applies to provisionally rated policies.
9. Other Building Factors
a
. Date of Construction
i. General Information
The date of construction is the date that the building permit was issued, provided
the actual start of construction, repair, reconstruction, or improvement was within
180 days of the permit date. Use the month, day, and year of the building permit,
even if the building has subsequently been substantially improved.
Based on the building’s date of construction, insurers must determine if buildings
are Post-Flood Insurance Rate Map (FIRM) or Pre-FIRM construction.
Buildings are Post-FIRM construction when the start of construction or substantial
improvement was after December 31, 1974, or on or after the effective date of
the initial FIRM for the community, whichever is later.
Buildings are Pre-FIRM construction when the start of construction or substantial
improvement was on or before December 31, 1974, or before the effective date
of the initial FIRM for the community, whichever is later.
ii. Substantial Improvement Date
A substantially improved building is a building that has undergone reconstruction,
rehabilitation, addition, or other improvement, the cost of which equals or
exceeds 50 percent (or a lower threshold if adopted and enforced by the
community) of the market value of the building before the “start of construction”
of the improvement. This term does not include a building that has undergone
reconstruction, rehabilitation, addition, or other improvement related to:
• Any project or improvement of a building to correct existing violations of a
state or local health, sanitary, or safety code specifications that have been
identified by the local code enforcement official and which are the minimum
necessary to assure safe living conditions; or
• Any alteration of a “historic building”, provided that the alteration will not
preclude the structure’s continued designation as a “historic building.”
Note: All historic buildings are Pre-FIRM construction if they meet the definitions
of “historic building” provided in Appendix K: Definitions and Acronyms.
When a building has been substantially improved, the agent must confirm if a
local community official has declared the building substantially improved. The
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 37
3. How to Write
Application Form must report both the original date of construction and the
substantial improvement date. The NFIP will use the substantial improvement date
for policy coverage and rating purposes.
iii. Date of Construction for Manufactured/Mobile Homes and Travel Trailers
Determining the date of construction differs for manufactured/mobile homes and
travel trailers depending on whether they are in a manufactured home park or
subdivision versus on individually owned lots or tracts of land. See Table 21 for
more detailed guidance.
Table 21. Date of Construction — Manufactured/Mobile Homes and Travel Trailers
Location Determine Construction Date
Manufactured Home Park
or Subdivision
• The date facilities were constructed for servicing the
manufactured home site; or
• The date of the building permit, provided that construction
began within 180 days of the permit date.
Individually Owned Lots or
Tracts of Land
• The date the manufactured home was permanently affixed
to the site; or
• The permit date, if affixed to the site within 180 days of the
building permit date.
iv. Building Under Construction
The NFIP will insure a building under construction, alteration, or repair before it is
walled and roofed, using the NFIP-issued rates based on the construction designs
and the intended use of the building. See additional eligibility information in Table 4
in Section 2: Before You Start.
A building under construction should follow the same guidance, documentation,
and process as all other buildings except photographs are not required while
the building is rated under construction. Also, if a building under construction,
alteration, or repair does not have at least two rigid exterior walls and a fully
secured roof at the time of loss, then the deductible amount will be two times the
deductible that would otherwise apply to a completed building.
8
A building under construction that is not walled and roofed is not eligible for
coverage if construction stops for more than 90 days. A cancellation form must be
completed indicating Reason Code 01 to receive a pro-rata refund for the remainder
of the policy term. Once construction begins again, a new Application Form should
be completed and submitted to reinstate coverage for a new policy term.
When the construction is complete, then the policy must be endorsed to reflect that
the building is no longer under construction and update any other rating variables
as needed.
See Section 4: How to Endorse for guidance on converting a policy once
construction is complete. The policy will not renew automatically if the building is
still under construction at time of renewal. An Application Form or recertification
questionnaire will be required to renew the policy.
8. 44 CFR Part 61, Appendix A(1)-(3), VI.A
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 38
3. How to Write
b. Number of Detached Structures on Property
When there are multiple structures located on the same property as the
insured building, enter the total number of detached structures not including
the insured building.
c. Number of Elevators
If there are elevators within the building, enter the total number of elevators,
including those located inside an enclosure. Enter zero or leave blank (no answer) if
there are no elevators.
d. Number of Floors in Building
Determine the building’s number of floors based on the number of floors above the
ground, excluding enclosures, crawlspaces (on grade or subgrade), basements, and
certain attics (if used only for storage). For example, a building with a basement
and one floor above the ground is rated as having one floor. Likewise, an elevated
building with an enclosure (either compliant or non-compliant) and one additional
floor above that is rated as having one floor. Indicate the total number of floors in
the building even if the policy covers only an individual unit.
e. Floor of Unit
If coverage is for a unit inside a multi-floor building with units located on different
floors, indicate the floor where the unit to be insured is located. For example, if the
unit is on the ninth floor of a twenty-story building, enter nine. If the building only has
one floor, enter one.
f. Total Number of Units in the Building
Determine the number of units in the building. If the building contains multiple units,
enter the total number of units in the building, even if the policy covers only a single
unit. For example, if coverage is for a unit within a four-unit building, enter four.
Count both residential and non-residential units.
g. Rental Property
Indicate if the building is a rental property. Select “Yes” if the building is a rental
property; otherwise, select “No.”
h. Building Over Water
Indicate whether the building is over water entirely, partially, or not at all.
i. Primary Residence Status
i. General Information
A primary residence is a Single-Family Home, Residential Manufactured/Mobile
Home, Residential Unit, or Two-to-Four Family Building in which the policyholder or
the policyholder’s spouse lives. The policyholder or the policyholder’s spouse may
have no more than one primary residence per person. Where the policyholder and
the policyholder’s spouse identify different primary residences, the insured must
submit the appropriate documentation for each person’s primary residence.
For a Single-Family Home, Residential Manufactured/Mobile Home, Residential
Unit, or Two-to-Four Family Building to qualify as a primary residence, the
policyholder or the policyholder’s spouse must live in the residence:
• More than 50 percent of the 365 calendar days following the current policy
effective date; or
• 50 percent or less of the 365 calendar days following the current policy
effective date, if the policyholder has only one residence and does not lease
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 39
3. How to Write
that residence to another party or use it as rental or income property at any
time during the policy term:
– Examples include, but are not limited to:
> Active-duty military personnel deployed for 50 percent or more of the
policy year in compliance with military orders;
> Persons displaced from a primary residence and living in a temporary
residence due to a federally declared disaster or a loss event on the
primary residence claimed on any line of insurance for 50 percent or
more of the policy year; or
> Persons absent from a primary residence for reasons such as routine
business travel, hospitalizations, or vacation for 50 percent or more of
the policy year.
Note: NFIP uses the term “primary residence” for rating purposes only. NFIP uses
the term “principal residence” to determine loss settlement as defined in the
Standard Flood Insurance Policy (SFIP). A principal residence is a single-family
dwelling in which, at the time of loss, the policyholder or the policyholder’s spouse
has lived for either 80 percent of the 365 days immediately preceding the loss, or
80 percent of the period of ownership, if the dwelling was owned less than 365
days. If the dwelling does not meet the definition of principal residence in the SFIP,
the NFIP will settle the building losses using actual cash value.
ii. Documentation of Primary Residence
If the policy or Application Form indicates that coverage is for a primary residence,
the insurer must verify that the address is the primary residence. When the mailing
address and the property address match, that provides sufficient verification
and no further documentation is required. If the addresses do not match, the
insurer must obtain supporting documentation. The NFIP accepts the following
documentation of primary residence:
• Homestead Tax Credit form for primary residence;
• Automobile registration;
• Proof of insurance for a vehicle;
• Documents showing where children attend school; or
• A signed and dated primary residence verification statement with the text below:
<Insured Property Address>
The above address is my primary residence, and I and/or my spouse will live
at this location for more than 50 percent of the 365 days following the policy
effective date.
PURSUANT TO 28 U.S.C. § 1746 I CERTIFY UNDER PENALTY OF PERJURY
UNDER THE LAWS OF THE UNITED STATES OF AMERICA THAT THE
FOREGOING IS TRUE AND CORRECT. I UNDERSTAND THAT ANY FALSE
STATEMENTS MAY CAUSE MY POLICY TO BE VOID, AND MAY BE PUNISHABLE
BY FINE OR IMPRISONMENT UNDER APPLICABLE FEDERAL LAW.
iii. Primary Residence and Trusts
If the policyholder is a trust and a beneficiary of the trust is using the building
as a primary residence, the beneficiary of the trust must provide documentation
of primary residence outlined above. In addition, the insurer must obtain
documentation that the person using the home as a primary residence is a
beneficiary of the trust named as the policyholder.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 40
3. How to Write
The grantor of a trust may also be eligible for the primary residence status if
the trust documents support that the grantor is a beneficiary of the trust with
the right to live in the home. The grantor must submit both the trust documents
and the primary residence documentation outlined above. The insurer must
obtain documentation that the grantor is a beneficiary of the trust named as the
policyholder, with the right to live in the home as a benefit.
D. Coverage and Deductibles
1. Maximum Coverage Limits
Table 22 and Table 23 show the maximum amounts of building and contents coverage
available for each Building Occupancy, under the Regular Program and the Emergency
Program respectively. Policies may carry building coverage not to exceed the lesser of:
• The building’s replacement cost value; or
• The maximum amount of coverage established by statute and regulation for each
Building Occupancy as shown in Tables 22 and 23.
9
See the Building Occupancy heading above for guidance on which Building Occupancy
to select for a given building.
Table 22. Maximum Coverage Limits in the Regular Program
Building Occupancy Building Coverage Contents Coverage
Single-Family Dwelling
Single-Family Home $250,000 $100,000
Residential Manufactured/Mobile Home $250,000 $100,000
Residential Unit
10
Residential Condominium Unit
(in Residential Building)
$250,000 $100,000
All Other Building Descriptions None $100,000
Multifamily Building
Two-to-Four Family Building $250,000 $100,000
Other Residential Building $500,000 $100,000
Residential Condominium Building
Residential Condominium Building
11
Not to exceed the lesser of:
• The building’s
replacement cost value; or
• Total number of units ×
$250,000.
$100,000
9. 42 U.S.C. § 4013(b); 44 C.F.R. § 61.6
10. For a Residential Unit, building coverage is only available if it is a residential condominium unit in a
residential building. A Dwelling Form policy on a Residential Unit in a cooperative or apartment building
cannot provide building coverage, only contents coverage. Likewise, a Dwelling Form policy for a Residential
Unit in a non-residential condominium building can only provide contents coverage.
11. Residential Condominium Building insured under the RCBAP Form. If a residential condominium building
is ineligible for the Residential Condominium Building occupancy and RCBAP Form, see the Condominium
Rating Information heading in this section (Scenario #1) for information on what building occupancy to
select. The building occupancy determines the applicable maximum coverage limits.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 41
3. How to Write
Building Occupancy Building Coverage Contents Coverage
Non-Residential
Non-Residential Building $500,000 $500,000
Non-Residential Manufactured/
Mobile Building
$500,000 $500,000
Non-Residential Unit None $500,000
Table 23. Maximum Coverage Limits in the Emergency Program
12
Building Occupancy Building Coverage Contents Coverage
Single-Family Dwelling
Single-Family Home $35,000
13
$10,000
Residential Manufactured/Mobile Home $35,000
13
$10,000
Residential Unit
14
Residential Condominium Unit
(in Residential Building)
$35,000
13
$10,000
All Other Building Descriptions None $10,000
Multifamily Building
Two-to-Four Family Building $35,000
13
$10,000
Other Residential Building $100,000
15
$10,000
Non-Residential
Non-Residential Building $100,000
15
$100,000
Non-Residential Manufactured/
Mobile Building
$100,000
15
$100,000
Non-Residential Unit None $100,000
2. Increased Cost of Compliance (ICC) Coverage
ICC coverage is flood insurance for expenses a policyholder incurs, above and
beyond physical damage sustained from a flooding event, to repair or rebuild a
flood-damaged building in compliance with state or local floodplain management
ordinances or laws. ICC coverage pays up to $30,000, subject to eligibility, toward
the cost of acceptable mitigation measures. Compliance activities eligible for
payment are elevation, floodproofing, relocation, demolition, or any combination of
12. If a residential condominium building is located in an Emergency Program community and thus ineligible
for the Residential Condominium Building occupancy and RCBAP Form, see the Condominium Rating
Information heading in this section (Scenario #1) for information on what building occupancy to select. The
building occupancy determines the applicable maximum coverage limits.
13. In Alaska, Guam, Hawaii, and the U.S. Virgin Islands, the amount available is $50,000.
14. For a Residential Unit, building coverage is only available if it is a residential condominium unit in a
residential building. A Dwelling Form policy on a Residential Unit in a cooperative or apartment building
cannot provide building coverage, only contents coverage. Likewise, a Dwelling Form policy for a Residential
Unit in a non-residential condominium building can only provide contents coverage.
15. In Alaska, Guam, Hawaii, and the U.S. Virgin Islands, the amount available is $150,000.
Table 22. Maximum Coverage Limits in the Regular Program
continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 42
3. How to Write
these activities. Eligible floodproofing activities apply only to non-residential buildings
and residential buildings with basements that satisfy FEMA standards (see the
Floodproofing heading in this section).
16
ICC coverage is not available for:
• Dwelling Form policies on individual condominium units including townhouse
or rowhouse condominiums (The condominium association is responsible for
complying with mitigation requirements);
• Emergency Program policies;
• Contents-only policies;
• GFIPs; or
• Detached garages, unless insured by a separate policy.
ICC coverage is in addition to the amount of building coverage purchased, and the two
combined totals cannot exceed the statutory maximum limits for building coverage.
FEMA’s system calculates the ICC premium as 1.9 percent of the policy’s building and
contents coverage premiums (inclusive of any mitigation discounts or CRS discount),
not to exceed a maximum of $75 (there is no minimum).
Please see Appendix A: Policy for additional information on ICC coverage.
3. Deductibles
Select building and contents coverage deductibles from the options in the charts below.
The minimum deductible for building coverage varies based on the building occupancy,
Pre-FIRM or Post-FIRM construction, receipt of statutory discounts, and the amount
of building coverage purchased.
17
In most cases, a higher deductible may reduce the
premium. Contents-only policies (policies with no building coverage) receive a minimum
$1,000 deductible.
Policyholders can select any combination of building and contents deductibles for
Single-Family Home, Residential Manufactured/Mobile Home, Residential Unit, and
Two-to-Four Family Building occupancies. For all other building occupancies, the NFIP
offers building and contents deductible options in fixed combinations.
Notes:
• If the building’s value is less than the minimum deductible available, then the
amount of any building loss will be less than the minimum deductible.
• If a building under construction, alteration, or repair does not have at least
two rigid exterior walls and a fully secured roof at the time of loss, then the
deductible amount will be two times the deductible that would otherwise apply to
a completed building.
• Policies in the Emergency Program have the same deductible options as shown
under the Exception: Pre-FIRM Receiving Any Statutory Discount columns in
Tables 24–26.
16. 44 C.F.R. § 60.6
17. 42 U.S.C. 4013(d); 42 U.S.C. 4019(b); 44 C.F.R. § 61.5
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 43
3. How to Write
Table 24. Deductible Options: Single-Family Home, Residential Manufactured/
Mobile Home, Residential Unit, Two-to-Four Family Building
18. Shown as: Building Deductible/Contents Deductible options in fixed combinations. Building-only policies
have the same deductible options as shown for building coverages in the table above.
Standard Building Options
Exception Building Options: Pre-FIRM
Building Receiving Any Statutory Discount Contents Options
Building Coverage of
$100,000 or less
Building Coverage
over $100,000
Building Coverage of
$100,000 or less
Building Coverage
over $100,000
Contents Coverage
of Any Amount
$1,000 $1,250 $1,500 N/A $1,000
$2,000 $2,000 $2,000 $2,000 $2,000
$5,000 $5,000 $5,000 $5,000 $5,000
$10,000 $10,000 $10,000 $10,000 $10,000
Note: For more information on statutory discounts see the Statutory Discounts heading below.
Table 25. Deductible Options: Other Residential Building, Non-Residential Building,
Non-Residential Manufactured/Mobile Building, Non-Residential Unit
Standard Building Options
18
Exception Building Options:
Pre-FIRM Building Receiving Any
Statutory Discount
18
Contents
Options
Building Coverage of
$100,000 or less
Building Coverage
over $100,000
Building Coverage of
$100,000 or less
Building Coverage
over $100,000
Contents-Only
Coverage
$1,000 / $1,000 $1,250 / $1,250 $1,500 / $1,500 N/A $1,000
$2,000 / $2,000 $2,000 / $2,000 $2,000 / $2,000 $2,000 / $2,000 $2,000
$5,000 / $5,000 $5,000 / $5,000 $5,000 / $5,000 $5,000 / $5,000 $5,000
$10,000 / $10,000 $10,000 / $10,000 $10,000 / $10,000 $10,000 / $10,000 $10,000
$25,000 / $25,000 $25,000 / $25,000 $25,000 / $25,000 $25,000 / $25,000 $25,000
$50,000 / $50,000 $50,000 / $50,000 $50,000 / $50,000 $50,000 / $50,000 $50,000
Table 26. Deductible Options: Residential Condominium Building
Standard Building Options
18
Exception Building Options: Pre-FIRM Building
Receiving Any Statutory Discount
18
Building Coverage of
$100,000 or less
Building Coverage
over $100,000
Building Coverage of
$100,000 or less
Building Coverage
over $100,000
$1,000 / $1,000 $1,250 / $1,250 $1,500 / $1,500 N/A
$2,000 / $2,000 $2,000 / $2,000 $2,000 / $2,000 $2,000 / $2,000
$5,000 / $5,000 $5,000 / $5,000 $5,000 / $5,000 $5,000 / $5,000
$10,000 / $10,000 $10,000 / $10,000 $10,000 / $10,000 $10,000 / $10,000
$25,000 / $25,000 $25,000 / $25,000 $25,000 / $25,000 $25,000 / $25,000
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 44
3. How to Write
E. Statutory Discounts
FEMA provides certain properties with statutorily-mandated discounts to encourage
community and property owner participation in the NFIP. Such properties include eligible
Pre-FIRM buildings and buildings mapped into certain specific flood zones. Properties in
the Emergency Program are also eligible for a statutory discount. Except for the Emergency
Program discount, statutory discounts gradually phase out through a statutory annual
increase cap discount
19
at each renewal date until the policy reaches its full-risk premium.
Notes:
• A lapse in coverage (for example, resulting from paying a renewal premium 30 days or
more after the expiration date of the policy) may affect eligibility for statutory discounts.
• If a property is eligible for more than one statutory discount, the discount most
beneficial to the policy applies. All policy forms including the RCBAP Form may be
eligible for a statutory discount.
• In addition to the eligibility rules below, there is a category of Leased Federal Properties
(LFPs) that must pay full-risk premiums and are thus not eligible for any statutory
discounts. See Appendix G: Leased Federal Properties for more information.
1. Pre-FIRM Discount
20
a. Eligibility
For insurance rating purposes, a building is Pre-FIRM construction if the start of
construction or substantial improvement was on or before December 31, 1974, or
before the effective date of the initial FIRM for the community (Initial FIRM Date). The
effective date of the community’s Initial FIRM Date is located in the NFIP Community
Status Book. Insurers must confirm a building’s Pre-FIRM construction status.
A Pre-FIRM building is eligible for the Pre-FIRM discount if the property:
• Qualifies as a primary residence;
• Is not a commercial property; and
• Is not designated an SRL property.
After the initial policy term when an eligible building receives the Pre-FIRM discount,
the discount phases out annually until the policy reaches its full-risk premium,
consistent with statutory caps on annual premium increases.
Notes:
• All historic buildings are Pre-FIRM construction if they meet the definition of
“historic building” provided in Appendix K: Definitions and Acronyms.
• If a property that previously qualified as Pre-FIRM construction is substantially
improved after the application date, the property is no longer considered Pre-
FIRM and the policy must be endorsed to reflect the new information. As a
result of the substantial improvement, the property is no longer eligible for the
Pre-FIRM discount, and the annual increase cap discount increases to reach
the full-risk premium more quickly as required by statute.
• Pre-FIRM buildings that do not meet the criteria above (for example, Pre-FIRM
non-primary residences, businesses, and SRL properties) are not eligible for
a Pre-FIRM discount on a new NFIP policy. However, such a building with an
existing NFIP policy may have received a Pre-FIRM discount in a prior policy
19. 42 U.S.C. 4015(e)
20. 42 U.S.C. 4014(a)(2)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 45
3. How to Write
term and may continue to be rated with a less-than-full-risk premium due to the
statutory caps on annual increases. Such Pre-FIRM buildings transition to the
full-risk premium more quickly than Pre-FIRM primary residences.
b. Lapse in Coverage
21
In general, a policyholder loses their Pre-FIRM discount if they allow a lapse (the
coverage expired or is no longer in effect) to occur. See Table 27 for impacts on
eligibility for the discount when a policy receiving the Pre-FIRM discount lapses.
Table 27. Impact of a Lapse on Pre-FIRM Discount Eligibility
SCENARIO GUIDANCE
Policy Lapsed –
No longer eligible
for the Pre-FIRM
discount
Aside from the two exceptions listed below, if a prior NFIP policy for the
building in the current applicant’s name received a Pre-FIRM discount and
lapsed on or after April 1, 2016, then the policyholder is no longer eligible
for a Pre-FIRM discount on the previously covered building.
This applies if any of the applicants for the new policy was either a
policyholder named on the expired or canceled policy or had an ownership
interest in the building at the time of cancellation or expiration.
Policy Lapsed –
Retains eligibility
for the Pre-FIRM
discount
Such a policyholder retains eligibility for a Pre-FIRM discount on the
previously covered property if either:
• The applicant was required to obtain and maintain flood insurance
for the property and allowed their coverage to lapse once no longer
subject to the requirement (such as they paid off the mortgage,
the property was remapped out of an SFHA, or the lender no longer
required the coverage, etc.)
21
; or
• The policy lapsed because the property was in a community
suspended from the NFIP and the policyholder reinstated the policy
within 180 days of the community’s reinstatement as a participating
NFIP community.
22
Note: If a prior NFIP policy on a Pre-FIRM building lapsed when not
receiving the Pre-FIRM discount, that lapse does not affect subsequent
eligibility for the Pre-FIRM discount.
23
For example, if a prior policy for a
Pre-FIRM building receiving a Newly Mapped discount lapsed, that lapse
does not make the policyholder ineligible for the Pre-FIRM discount.
c. Application
The Application Form must indicate whether a prior lapse affects the applicant’s
eligibility for the Pre-FIRM discount through the response to these two questions:
• Did the applicant have a prior NFIP policy for the building that received a
Pre-FIRM discount and lapsed?
• If yes, did the lapse occur for a valid reason?
Table 28 explains how to answer the questions based on the detailed guidance above.
21. 42 U.S.C. § 4014(g)
22. 42 U.S.C. § 4014(g); 42 U.S.C. § 4014(a)(2); 42 USC § 4012a; 44 C.F.R. § 59.24
23. The § 4014(g) prohibition on offering Pre-FIRM rates after a policy has lapsed applies only to policies
receiving the Pre-FIRM discount. 42 U.S.C. § 4014(g); 42 U.S.C. § 4014(a)(2)(A)-(E)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 46
3. How to Write
Table 28. Application Response on Lapse and Pre-FIRM Discount Eligibility
RESPONSE CONDITIONS OUTCOME
Question: Did the applicant have a prior NFIP policy for the building that received a
Pre-FIRM discount and lapsed?
Answer ‘Yes’
If the applicant had a prior NFIP policy for the
building that received a Pre-FIRM discount and
lapsed.
In this case, the lapse in
coverage may impact the
applicant’s eligibility for the
Pre-FIRM discount. Proceed
to the next question.
Answer ‘No’
If any of the following are true:
• There was not a prior NFIP policy for the
building that lapsed;
• There was not a prior NFIP policy for the
building that lapsed while receiving the Pre-
FIRM discount; or
• None of the applicants for the new policy was a
policyholder named on the expired or canceled
policy or had an ownership interest in the
building at the time of cancellation or expiration
(in other words, the current applicant is a
different policyholder).
In this case, there is no
impact on the applicant’s
eligibility for the Pre-FIRM
discount.
Question: If yes, did the lapse occur for a valid reason?
Answer ‘Yes’
If the applicant allowed a prior NFIP policy for the
building receiving the Pre-FIRM discount to lapse and
did so because either:
• The applicant was required to obtain and
maintain flood insurance for the property and
allowed their coverage to lapse once no longer
subject to the requirement; or
• The property was in a community suspended
from the NFIP and the policyholder
reinstated the policy within 180 days
of the community’s reinstatement as a
participating NFIP community.
In this case, the lapse in
coverage does not impact
the applicant’s eligibility for
the Pre-FIRM discount.
Answer ‘No’
If the applicant allowed a prior NFIP policy for the
building receiving the Pre-FIRM discount to lapse
and neither of the previous two conditions was met
(even if ood insurance was not ever required by
the lender).
In this case, the applicant
is ineligible for the Pre-
FIRM discount.
Note: The insurer system makes an automated determination on whether the
applicant is eligible for the Pre-FIRM discount based on the rules under the Eligibility
heading above (using other information provided on the Application Form) and the
response to the two lapse-related questions.
2. Newly Mapped Discount
24
A property may be eligible for the Newly Mapped discount if it was once designated
outside of the Special Flood Hazard Area (SFHA) on an effective Flood Insurance Rate
24. 42 U.S.C. 4015(i)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 47
3. How to Write
Map (FIRM) and, following a map revision, is designated within a Special Flood Hazard
Area (SFHA). The Newly Mapped discount phases out annually until reaching the
policy’s full-risk premium.
The insurer must verify the policy’s eligibility for the Newly Mapped discount, including
by confirming any prior flood zone designation before the most current FIRM.
a. Eligibility
A property may be eligible for the Newly Mapped discount if it was either:
• Previously designated in a Zone B, C, or X on the previous flood map and
newly mapped into an SFHA.
• Previously designated in a Zone D, A99, or AR and newly mapped into a
different SFHA zone.
To determine the current flood zone, use the FIRM in effect at the time of application
and payment of the total amount due. The Newly Mapped discount does not apply to
properties mapped into the SFHA on the community’s initial FIRM.
Properties newly mapped into the SFHA after April 1, 2015, are eligible for the Newly
Mapped discount if:
• The policy effective date is within 12 months of the effective FIRM revision
date; or
• The policyholder applied for the policy within 45 days of initial lender
notification, if the notification occurred within 24 months of the effective FIRM
revision date. Note: The insurer must retain a copy of the lender notification in
the underwriting file.
The following is ineligible for the Newly Mapped discount:
• Buildings and/or contents in Emergency Program communities
b. Documentation
Insurers must obtain one or more of the following to document the previous and
current flood zones:
• Special Flood Hazard Determination Form (SFHDF).
• Copy of the most recent effective flood map marked to show the exact location
and flood zone of the building. The NFIP may require additional documentation
if the building is close to the zone boundary.
• Letter signed by a local community official indicating the property address and
flood zone of the building.
• EC signed and dated by a surveyor, an engineer, an architect, or a local
community official indicating the exact location and flood zone of the building.
• Letter of Map Amendment (LOMA).
• Letter of Map Revision (LOMR).
c. Lapse in Coverage
In general, a policyholder loses their Newly Mapped discount if they allow a lapse
(the coverage expired or is no longer in effect) to occur. See Table 29 for impacts on
eligibility for the discount when a policy receiving the Newly Mapped discount lapses.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 48
3. How to Write
Table 29. Impact of a Lapse on Newly Mapped Discount Eligibility
SCENARIO GUIDANCE
Policy Lapsed –
No longer eligible
for the Newly
Mapped discount
Aside from the one exception listed below, if a prior NFIP policy for the building
in the current applicant’s name received a Newly Mapped discount and lapsed
on or after April 1, 2016, then the policyholder is no longer eligible for a Newly
Mapped discount on the previously covered building.
This applies if any of the applicants for the new policy was either a policyholder
named on the expired or canceled policy or had an ownership interest in the
building at the time of cancellation or expiration.
25
Policy Lapsed –
Retains eligibility
for the Newly
Mapped discount
Such a policyholder retains eligibility for a Newly Mapped discount on the
previously covered property if:
• The policy lapsed because the property was in a community suspended
from the NFIP and the policyholder reinstated the policy within 180 days of
the community’s reinstatement as a participating NFIP community.
26
Note: If a prior NFIP policy lapsed when not receiving the Newly Mapped
discount, that lapse does not affect subsequent eligibility for the Newly Mapped
discount. In other words, if a policy lapsed on a property before it was mapped
into an SFHA, the property may still receive the Newly Mapped discount if it
meets the other eligibility requirements.
d. Application Form
The Application Form must indicate whether an applicant is eligible for the Newly
Mapped discount through responses to these three questions:
• Did the applicant have a prior NFIP policy for the building that received a Newly
Mapped discount and lapsed?
• If yes, did the lapse occur for a valid reason?
• Is the property eligible for the Newly Mapped discount
Table 30 explains how to answer the questions based on the detailed guidance above.
Table 30. Application Response on Newly Mapped Discount Eligibility
RESPONSE CONDITIONS OUTCOME
Question: Did the applicant have a prior NFIP policy for the building that received a
Newly Mapped discount and lapsed?
Answer ‘Yes’
If the applicant had a prior NFIP policy for the
building that received a Newly Mapped discount
and lapsed.
In this case, the lapse in
coverage may impact the
applicant’s eligibility for the
Newly Mapped discount.
Proceed to the next question.
Answer ‘No’
If either of the following are true:
• There was not a prior NFIP policy on the
building that lapsed while receiving the
Newly Mapped discount; or
• None of the applicants for the new policy
was a policyholder named on the expired or
In this case, there is no
impact on the applicant’s
lapse eligibility for the Newly
Mapped discount.
25. Under 42 U.S.C. § 4015(i), a policy with a newly mapped discount must renew (in other words, not lapse)
to retain the newly mapped discount. 42 U.S.C. § 4015(i)
26. 42 U.S.C. § 4015(i); 44 C.F.R. § 59.24
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 49
3. How to Write
RESPONSE CONDITIONS OUTCOME
Answer ‘No’
continued
canceled policy or had an ownership interest
in the building at the time of cancellation
or expiration (in other words, the current
applicant is a different policyholder).
Question: If yes, did the lapse occur for a valid reason?
Answer ‘Yes’
If the applicant allowed a prior NFIP policy for the
building receiving the Newly Mapped discount to
lapse because:
• The property was in a community suspended
from the NFIP and the policyholder
reinstated the policy within 180 days
of the community’s reinstatement as a
participating NFIP community.
In this case, the lapse in
coverage does not impact the
applicant’s eligibility for the
Newly Mapped discount.
Answer ‘No’
If the applicant allowed a prior NFIP policy for the
building receiving the Newly Mapped discount to
lapse and the prior condition was not met.
In this case, the applicant is
ineligible for the Newly Mapped
discount.
Question: Is the property eligible for the Newly Mapped discount?
Answer ‘Yes’
If the property meets the Newly Mapped discount
eligibility rules under the Eligibility heading above
and the responses to the previous lapse-related
questions show that the applicant is eligible for
the Newly Mapped discount.
FEMA’s system will evaluate
whether applying the Newly
Mapped discount is most
advantageous for the
policyholder.
Answer ‘No’
If the property does not meet the Newly Mapped
discount eligibility rules under the Eligibility
heading above or the responses to the previous
lapse-related questions show that the applicant
is not eligible for the Newly Mapped discount.
FEMA’s system will not apply
the Newly Mapped discount
3. Other Statutory Discounts
Using other information provided on the Application Form, FEMA’s system automatically
determines a policy’s eligibility for other statutory discounts that may also apply to
properties located in:
• Zone AR until the policy gradually reaches its full-risk premium through an annual
increase cap discount;
27
or
• Zone A99 until the policy gradually reaches its full-risk premium through an
annual increase cap discount;
28
or
• A community in the Emergency Program until it joins the Regular Program.
4. New Policy After a Real Estate Transaction
The new owner of an NFIP-insured building can buy a new NFIP policy and receive any
statutory discount the prior policyholder receive
29
if all of the following apply:
• The building is not in condominium ownership before or after the transaction;
Table 30. Application Response on Newly Mapped Discount Eligibility continued
27. 42 U.S.C. 4014(f)
28. 42 U.S.C. 4014(e)
29. 42 U.S.C. 4015(e)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 50
3. How to Write
• The building was insured by the NFIP with building coverage at the time
of transaction;
• The new NFIP policy will be effective on, or within one year after, the
transaction date; and
• The insurer submits the prior NFIP policy number and NAIC number to FEMA and
maintains acceptable documentation of the title transfer.
Select New (at the top of the Application Form) as the policy transaction type and
enter the prior policy number in the appropriate field. The standard NFIP effective
date rules apply based on the date the applicant submitted the Application Form and
full amount due.
The insurer must maintain the closing papers to support that the new NFIP policy is
effective on, or within one year after, the real estate transaction date. Real estate
transactions also include title transfers through purchases or by other means such as
inheritances and gifts. The insurer must validate the primary residence status when
writing the new policy for the new owner to be eligible for the primary residence status
and associated HFIAA surcharge.
Note: If the previous owner received a discount that the new owner is ineligible for, the
new owner may receive the same discounted premium as the previous owner. However,
the annual increase cap (which is a component of the discounted premium) is based on
the information provided by the new owner. The discounted premium does not include
assessments, fees, or surcharges.
F. Assessments, Fees, and Surcharges
This section describes assessments, fees, and surcharges that are not part of the full-
risk premium or discounted premium but are, as applicable, required components of the
total amount due to purchase an NFIP policy. These apply to both rating engine rated and
provisionally rated policies.
1. Reserve Fund Assessment
The Reserve Fund Assessment is a percentage of the Discounted Premium (excluding
the Federal Policy Fee, HFIAA surcharge, and probation surcharge) paid on new and
renewed policies. Revenues from this statutorily-mandated assessment build an NFIP
Reserve Fund to pay claims after catastrophic flood events.
30
Table 31. Reserve Fund Assessment
Assessed Policies Reserve Fund Assessment
GFIP
31
0%
All Other Policies 18%
2. HFIAA Surcharge
The Homeowner Flood Insurance Affordability Act of 2014 (HFIAA) introduced a
mandatory annual surcharge for all new and renewed policies.
32
For more information
on primary residences see the Primary Residence Status heading above in this section.
30. 42 U.S.C. 4017A
31. The GFIP is only available to recipients of federal disaster assistance and is serviced by the
NFIP Direct Servicing Agent.
32. Pub. L. No. 113-89
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 51
3. How to Write
Table 32. HFIAA Surcharge
Property Type Surcharge
Primary Residences — A primary residence is a Single-Family Home,
Residential Manufactured/Mobile Home, Residential Unit, or Two-to-Four
Family Building in which the policyholder or the policyholder’s spouse lives.
$25
All Other NFIP policies — Non-primary residences and the following
building occupancies:
• Other Residential Building
• Residential Condominium Building
• Non-Residential Building
• Non-Residential Manufactured/Mobile Building
• Non-Residential Unit
Note: A non-primary residence is a residential building that is not the
primary residence of the policyholder.
$250
3. Federal Policy Fee
The Federal Policy Fee (FPF) is a flat charge paid by the policyholder on each new
and renewed policy to defray certain administrative expenses incurred in carrying
out the NFIP.
33
Table 33 lists the FPF applicable for each building occupancy. For building occupancies
under the Dwelling Form and General Property Form, a flat FPF applies. For Residential
Condominium Buildings the calculation involves the total number of units in the
building. For the first 20 units, the FPF is $47 per unit, reaching $940 at 20 units.
After 20 units, the formula adds $20 for each additional unit up until there are 40 total
units, with a total FPF of $1,340 at that point. Above 40 units, there is an additional
$10 per unit up until the total number of units reaches 100, at which point the total
FPF would be $1,940. Beyond 100 units, the per-unit increase is $2 regardless of the
number of additional units.
Table 33. Federal Policy Fee
Building Occupancy Federal Policy Fee Amount
• Single-Family Home
• Residential Manufactured/Mobile Home
• Residential Unit
• Two-to-Four Family Building
$47
• Other Residential Building
• Non-Residential Building
• Non-Residential Manufactured/Mobile Building
• Non-Residential Unit
$47
Residential Condominium Building
Units 1–20 $47 per unit
Units 21–40 $20 per unit
Units 41–100 $10 per unit
Units 101+ $2 per unit
33. 42 U.S.C. 4014(a)(1)(B)(iii); 4015(d); 4017(b)(5)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 52
3. How to Write
4. Probation Surcharge
The Probation Surcharge is a flat surcharge paid by the policyholder on each new
or renewed policy issued covering a property in a community that FEMA has placed
on probation because the community failed to meet NFIP floodplain management
requirements.
34
Table 34. Probation Surcharge
Fee Type Amount
Probation Surcharge $50
G. Premium Considerations
Policies may be subject to minimum or maximum rates by peril and coverage. These
minimum and maximum rates may impact how discounts, surcharges, and deductible
changes impact the premium. In some rare cases, there may be no change in premium
when there is a change in a rating element or deductible.
III. Condominium Rating Information
A. Condominium Rating Scenarios
1. Overview
Table 35 provides an overview of five principal scenarios for insuring condominiums.
The following sub-sections provide detailed guidance on each scenario and – where
rated the same as other NFIP policies – references to the General Rating Information
earlier in this section. Both condominium associations and individual condominium
unit owners can purchase NFIP coverage. The NFIP defines a condominium association
as an entity made up of condominium unit owners, where membership in the entity
is a required condition of unit ownership, that is responsible for the maintenance and
operation of:
• Common elements owned in undivided shares by unit owners; and
• Other real property in which the unit owners have use rights.
Table 35. Methods for Insuring Condominiums
SCENARIO POLICY FORM
#1 – Condominium
Association Coverage for
Residential Condominium
Building
Use the RCBAP Form to insure a residential condominium building and
contents owned by the condominium association. The condominium
association must be named as the policyholder.
• Building Occupancy: Residential Condominium Building
• Building Description: Entire Residential Condominium Building
#2 – Residential Unit Owner
Coverage in Residential
Condominium Building
Use the Dwelling Form to insure an individual residential condominium
unit and its contents in a residential condominium building. The unit
owner must be named as the policyholder.
• Building Occupancy: Residential Unit
• Building Description: Residential Condominium Unit (in
Residential Building)
34. 44 CFR 59.24
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 53
3. How to Write
SCENARIO POLICY FORM
#3 – Residential Unit Owner
Coverage in Non-Residential
Condominium Building
Use the Dwelling Form to insure an individual residential condominium
unit owner’s contents in a non-residential condominium building. The
unit owner must be named as the policyholder.
• Building Occupancy: Residential Unit
• Building Description: Residential Condominium Unit (in Non-
Residential Building)
#4 – Condominium
Association Coverage
for Non-Residential
Condominium Building
Use the General Property Form to insure a non-residential condominium
building and contents owned by the condominium association. The
condominium association must be named as the policyholder.
• Building Occupancy: Non-Residential Building
• Building Description: Commercial, Detached Garage, Government-
Owned, House of Worship, Recreation Building, Storage/Tool
Shed, or Other Non-Residential Type
#5 – Non-Residential
Unit Owner Coverage in
Residential or
Non-Residential
Condominium Building
Use the General Property Form to insure a non-residential condominium
unit owner’s contents in a residential or non-residential condominium
building. The unit owner must be named as the policyholder.
• Building Occupancy: Non-Residential Unit
• Building Description: Commercial, Government-Owned, House of
Worship, Recreation Building, Storage/Tool Shed, or Other Non-
Residential Type
2. Condominium Association Coverage for Residential Condominium Building
(Scenario #1)
Use the Residential Condominium Building Association Policy (RCBAP) Form to insure
a residential condominium building and contents that are owned by a condominium
association. The condominium association must be named as the policyholder.
Table 36 describes the specific eligibility, rating, and claims handling requirements
applicable to the RCBAP Form.
Table 36. Condominium Association Coverage for Residential Condominium
Association Building (Scenario #1)
TOPIC GUIDANCE
Eligibility Rules
Policy Form RCBAP (Building and Contents)
Program
Eligibility
Regular Program only
(RCBAPs in Emergency Program communities are only eligible for coverage under
the Dwelling Form or General Property Form, as appropriate based on the building’s
total number of units.)
Building
Eligibility
A residential condominium building (or mixed-use condominium building with non-
residential uses limited to less than 25 percent of the building’s total oor area)
with one or more units.
Notes:
• When determining non-residential uses, exclude the common areas of the
building from the building’s total floor area. Exclude areas such as garages,
lobbies, recreation rooms, storage/utility rooms, and hallways when
determining residential use of a condominium building.
Table 35. Methods for Insuring Condominiums continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 54
3. How to Write
TOPIC GUIDANCE
Building
Eligibility
continued
• A townhouse or rowhouse in the condominium form of ownership may be
insured as either an entire building (exterior, walls, and interior) or unit
(interior). If insuring as an entire building and owned by a condominium
association, it is eligible for the Residential Condominium Building
occupancy and RCBAP Form.
• Timeshare buildings in condominium ownership are eligible for the RCBAP.
• Residential condominium buildings used as hotels or motels or rented either
short or long-term are eligible for the RCBAP.
Policyholder
Eligibility
Eligible Policyholders
• The policyholder must be a condominium association.
• If the policyholder named is not clearly a condominium association,
the insurer must have legal documentation confirming the entity is a
condominium association. Acceptable examples of condominium association
documentation include:
– A copy of the condominium association bylaws; or
– A statement signed by an officer or representative of the condominium
association confirming the building is in the condominium form of ownership.
• If a Homeowners Association (HOA) is in the condominium form of ownership,
and its by-laws require purchase of flood insurance building coverage for its
members, then the HOA may purchase an RCBAP.
Ineligible Policyholders
• Buildings in the cooperative form of ownership.
• HOAs not in the condominium form of ownership.
Is the
Policyholder a
Condominium
Association?
• Select “Yes”
• If the policyholder is not a condominium association then the building is not
eligible for the RCBAP Form; in that case, select “No” and use the Dwelling
Form or General Property Form as appropriate based on the total number of
units in the building.
Property
Insured
• Condominium building.
• Individually-owned units within the building.
• Improvements within units.
• Additions and extensions attached or connected to the insured building.
• Fixtures, machinery, and equipment within the building.
• Contents owned by the association.
Note: The NFIP requires a separate policy for each building owned by a condominium
association. Coverage applies to the single building described under Building
Location on the Flood insurance Application Form and Insured Property Location on
the Declarations Page.
Other Eligibility
Rules
See guidance in Section 2: Before You Start
Geographic Location Variables
See the Geographic Location Variables heading under General Rating Information above
• Building Location
• Community Map Information and Flood Zone
• Community Rating System Discount
Table 36. Condominium Association Coverage for Residential Condominium
Association Building (Scenario #1)
continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 55
3. How to Write
TOPIC GUIDANCE
Structural Variables
Building
Occupancy
Eligible for the RCBAP Form
• Select “Residential Condominium Building”
• The building must meet the criteria for the Residential Condominium Building
occupancy to be eligible for the RCBAP Form (and vice versa since the criteria
are identical). See the Building Occupancy heading under General Rating
Information above.
Not Eligible for the RCBAP Form
• If a mixed-use single-family condominium building has non-residential uses
between 25 percent and 49 percent of the building’s total floor area, select
the “Single-Family Home” occupancy.
• If a mixed-use single-family condominium building has non-residential uses
greater than or equal to 50 percent of the building’s total floor area, select
the “Non-Residential Building” occupancy.
• If a mixed-use condominium building with two or more units has non-
residential uses greater than or equal to 25 percent of the building’s total
floor area, select the “Non-Residential Building” occupancy.
• If the policyholder is not a condominium association, select either the Single-
Family Home, Two-to-Four Family Building, or Other Residential Building
occupancy depending on the building’s total number of units.
• If the building is located in an Emergency Program community, select either
the Single-Family Home, Two-to-Four Family Building, or Other Residential
Building occupancy depending on the building’s total number of units.
• If insuring a townhouse or rowhouse in condominium ownership as a unit (as
opposed to an entire building), select the Residential Unit occupancy.
Note: The guidance in this Scenario #1 table is specic to the Residential
Condominium Building occupancy and RCBAP Form and does not cover residential
condominiums that are ineligible and thus insured under a different Building
Occupancy and policy form.
Building
Description
Select “Entire Residential Condominium Building”
Construction
Type
Not applicable to the Residential Condominium Building occupancy.
Number of
Elevators
If there are elevators within the building, enter the total number elevators, including
those located inside an enclosure.
Number of Floors
in Building
Determine a building’s number of oors based on the number of oors above the
ground, excluding enclosures, crawlspaces (on grade or subgrade), basements, and
certain attics (if used only for storage).
Total Number
of Units in the
Building
Determine the number of units in the building. If the building contains multiple units,
count the total number of units including both residential and non-residential units.
Building
Replacement
Cost Value
• The insurer must obtain Building Replacement Cost Value of the building
(including the cost of the building’s foundation) based on appraisals
commonly used in the industry.
Table 36. Condominium Association Coverage for Residential Condominium
Association Building (Scenario #1)
continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 56
3. How to Write
TOPIC GUIDANCE
Building
Replacement
Cost Value
continued
• The insurer must maintain, supporting documentation of the Building
Replacement Cost Value. Supporting documentation may include a
recent property valuation report stating the value of the building and its
foundation on a Replacement Cost Value basis to meet this requirement.
• Supporting valuation documentation is not required if the building’s square
footage is less than 1,000 square feet.
• The insurer must validate the Building RCV information at least every 3
years. See notice requirements and a sample version in Appendix I:
Policyholder Communications.
Other Structural
Variables
For guidance on other structural variables, see the Structural Variables heading
under General Rating Information above.
• Foundation Type
• First Floor Height
• Machinery & Equipment Above First Floor
• Proper Openings
• Floodproofing
• Prior NFIP Claims
• Severe Repetitive Loss Property
• Date of Construction
• Number of Detached Structures on Property
• Rental Property
• Building Over Water
• Primary Residence Status
Coverage and Deductibles
Maximum
Coverage Limits
Building: Not to exceed the lesser of:
• The building’s replacement cost value; or
• Total number of units × $250,000
Contents: Actual cash value (ACV) of commonly owned contents to a maximum of
$100,000 per building.
Notes:
• A unit owner may purchase a Dwelling Form policy with building coverage for a
residential condominium unit in a residential condominium building insured by
an RCBAP. However, the NFIP will not pay more than $250,000 for combined
coverage for a single unit under the Dwelling Form policy and the RCBAP.
Insureds may not claim the same damaged items on more than one NFIP policy.
• If insuring a residential condominium building in an Emergency Program
community, determine the appropriate Building Occupancy and apply the
associated maximum coverage limits. For the Single-Family Home and Two-to-
Four Family Building occupancies under the Dwelling Form, maximum limits of
$35,000 building and $10,000 contents apply. For the Other Residential Building
occupancy under the General Property Form, maximum limits of $100,000
building and $10,000 contents apply.
ICC Coverage Yes
Assessment
Coverage
No
Deductibles See the Deductibles heading under General Rating Information above
Table 36. Condominium Association Coverage for Residential Condominium
Association Building (Scenario #1)
continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 57
3. How to Write
TOPIC GUIDANCE
Statutory Discounts
See the Statutory Discounts heading under General Rating Information above
• Newly Mapped Discount
• Pre-FIRM Discount
• Other Statutory Discounts
Assessments, Fees, and Surcharges
Federal
Policy Fee
Number of Units Federal Policy Fee
Units 1–20 $47 per unit
Units 21–40 $20 per unit
Units 41–100 $10 per unit
Units 101+ $2 per unit
Example for a building with 130 units:
Units 1–20, add $47 per unit = $940
Units 21–40, add $20 per unit = $400
Units 41–100, add $10 per unit = $600
Units 101–130, add $2 per unit = $60
Federal Policy Fee Total = $2,000 ($940+$400+$600+$60)
Other
Assessments
and Surcharges
For guidance see the Assessments, Fees, and Surcharges heading under General
Rating Information above.
• Reserve Fund Assessment
• HFIAA Surcharge
• Probation Surcharge
Claim Settlement
Replacement
Cost Coverage
• Yes, for the building only, subject to policy provisions.
• RCV is the cost to replace property with the same type of material and
construction without deduction for depreciation.
Coinsurance
Penalty
• The RCBAP coinsurance penalty applies to building coverage only. To receive full
replacement cost, the insured must have purchased insurance in an amount
equal to 80 percent of the full replacement cost of the building at the time of
loss or the maximum amount of insurance available for that building under the
NFIP, whichever is less.
• For instructions and examples on the coinsurance penalty see the RCBAP Form,
VII. Coinsurance.
Incorrect SFIP Form
Building
Becomes
Ineligible
• If an insurer discovers that a building is not eligible for the RCBAP, the insurer
must cancel and rewrite the coverage under the correct form with the original
effective date. See additional guidance under Reason Code 22 “Cancel and
rewrite due to administrative error” in Section 6: How to Cancel.
• The provisions of the correct SFIP form apply.
Table 36. Condominium Association Coverage for Residential Condominium
Association Building (Scenario #1)
continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 58
3. How to Write
TOPIC GUIDANCE
Building
Becomes
Ineligible
continued
• The insurer must set the amount of building or contents coverage according to
the provisions of the correct SFIP form. The coverage amount on the correct
SFIP form must equal (and may not exceed) the coverage amount on the
canceled SFIP form and may not exceed the maximum coverage limits available
on the correct SFIP form. If the policyholder requests to increase coverage
above the coverage amount on the canceled SFIP form, the insurer must
follow the standard endorsement procedures for adding or increasing coverage
described in Section 4: How to Endorse.
Owner Becomes
Ineligible
• If, during a policy term, the policy fails to meet the eligibility requirements
due to a change in the form of ownership, it becomes ineligible for coverage
under the RCBAP.
• The insurer must cancel and rewrite the policy using the correct SFIP form.
• The effective date of the cancellation is the date that the form of
ownership changed.
3. Residential Unit Owner Coverage in Residential Condominium Building (Scenario #2)
a. General Information
Use t
he Dwelling Form to insure an individual residential condominium unit
and its contents in a residential condominium building. The unit owner must
be named as the policyholder. Table 37 describes the applicable eligibility and
rating requirements.
Table 37. Residential Unit Owner Coverage in Residential Condominium
Building (Scenario #2)
TOPIC GUIDANCE
Eligibility Rules
Policy Form Dwelling Form (Building and Contents)
Program Eligibility Regular Program or Emergency Program
Building
Eligibility
A residential condominium unit (or mixed-use unit with non-residential uses limited
to less than 50 percent of the unit’s total oor area) in a residential condominium
building with one or more units, including a townhouse or rowhouse
Note: See Scenario #3 for information on insuring a residential condominium unit in a
non-residential condominium building.
Policyholder
Eligibility
Eligible Policyholders
• Unit owner or tenant (with contents only policy);
• Condominium association in the name of the unit owner and the association
as their interests may appear; or
• Condominium association for an individual unit owned by the association.
Note: When the applicant is the condominium association, the lender for the
individual unit owner should not appear on the declarations page.
Is the Policyholder
a Condominium
Association?
• Generally select “No”, including if the condominium association purchases
the policy on behalf of a different unit owner.
• Only select “Yes” if the condominium association owns the individual unit.
Table 36. Condominium Association Coverage for Residential Condominium
Association Building (Scenario #1)
continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 59
3. How to Write
TOPIC GUIDANCE
Property Insured
• Building elements.
• Individually-owned contents.
• Interior walls, floor, and ceiling (not otherwise insured under a flood insurance
policy purchased by the condominium association) for not more than 10 percent
of the stated contents coverage amount.
Duplicate Coverage
• In an exception to the general rule that multiple policies with building
coverage may not insure a single building, the insurer may issue a Dwelling
Form policy with building coverage to a residential condominium unit owner in
a condominium building also covered by an RCBAP.
• However, no more than $250,000 may be paid in combined benefits for a single
unit under the Dwelling Form and the RCBAP. Insureds may not claim damaged
items under more than one policy. The NFIP will only pay for damaged items
under one policy.
Other Eligibility
Rules
See guidance in Section 2: Before You Start
Geographic Location Variables
See the Geographic Location Variables heading under General Rating Information above
• Building Location
• Community Map Information and Flood Zone
• Community Rating System Discount
Structural Variables
Building
Occupancy
• Select “Residential Unit”
• See the Building Occupancy heading under General Rating Information above
Building
Description
• Select “Residential Condominium Unit (in Residential Building)”
• See the Building Description heading under General Rating Information above
Construction Type Not applicable
Foundation Type
and First Floor
Height
The general guidance applies since even if the unit is not on the rst oor the NFIP is
still interested in the entire building’s foundation and height above ground elevation.
See the Foundation Type and First Floor Height headings under General Rating
Information above.
Building
Replacement Cost
Value
FEMA will determine Building Replacement Cost Value for the unit by using Application
Form data and industry data connected with the property address. If FEMA is
unable to determine the Building Replacement Cost Value, the insurer must obtain
the Building Replacement Cost Value for the unit based on appraisals commonly
used in the industry, and report it on the Application Form. FEMA reassesses its
determination of Building Replacement Cost Value at every renewal.
Number of Elevators Not applicable
Number of Floors in
Building
Indicate the total number of oors in the building even though the policy covers only
an individual unit. Determine the building’s number of oors based on the number of
oors above the ground, excluding enclosures, crawlspaces (on grade or subgrade),
basements, and certain attics (if used only for storage).
Floor of Unit
If coverage is for a unit inside a multi-oor building with units located on different
oors, indicate the oor where the unit to be insured is located. For example, if the
unit is on the ninth oor of a twenty-story building, enter nine.
Table 37. Residential Unit Owner Coverage in Residential Condominium
Building (Scenario #2) continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 60
3. How to Write
TOPIC GUIDANCE
Total Number
of Units in the
Building
Determine the number of units in the building. If the building contains multiple units,
enter the total number of units in the building, even though the policy covers only a
single unit. For example, if coverage is for a unit within a four-unit building, enter four.
Count both residential and non-residential units.
Other Structural
Variables
For guidance on other structural variables, see the Structural Variables heading
under General Rating Information above.
• Machinery & Equipment Above First Floor
• Proper Openings
• Floodproofing
• Square Footage
• Building Replacement Cost Value
• Prior NFIP Claims
• Severe Repetitive Loss Property
• Date of Construction
• Number of Detached Structures on Property
• Rental Property
• Building Over Water
• Primary Residence Status
Coverage and Deductibles
Maximum
Coverage Limits
Regular Program
• Building: Not to exceed the lesser of:
– The building’s replacement cost value; or
– $250,000
• Contents: $100,000
Emergency Program
• Building: Not to exceed the lesser of:
– The building’s replacement cost value; or
– $35,000
• Contents: $10,000
ICC Coverage No
Assessment
Coverage
Yes. See information in Table 38 below.
Deductibles See the Deductibles heading under General Rating Information above
Statutory Discounts
See the Statutory Discounts heading under General Rating Information above
• Newly Mapped Discount
• Pre-FIRM Discount
• Other Statutory Discounts
Assessments, Fees, and Surcharges
Federal Policy Fee $47
Table 37. Residential Unit Owner Coverage in Residential Condominium
Building (Scenario #2) continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 61
3. How to Write
TOPIC GUIDANCE
Other Assessments
and Surcharges
For guidance see the Assessments, Fees, and Surcharges heading under General
Rating Information above.
• Reserve Fund Assessment
• HFIAA Surcharge
• Probation Surcharge
Claim Settlement
Replacement Cost
Coverage
Yes, subject to policy provisions
b. Assessment Coverage
Table 38 shows how assessment coverage applies after a loss. Assessment
coverage is only available under the Dwelling Form, for residential condominium unit
owners in residential condominium buildings. Two limitations apply:
• The insured cannot use the assessment coverage under the Dwelling Form to
meet the 80 percent coinsurance provision of the RCBAP.
• The assessment coverage under the Dwelling Form does not apply to ICC
coverage or buildings subject to continuous flooding from closed basin lakes.
Note: The RCBAP and General Property Forms do not provide assessment coverage.
Table 38. Assessment Coverage After a Loss
Condition At
Time of Loss Assessment Coverage Under the Dwelling Form
No RCBAP On the
Entire Building
If the unit owner has purchased building coverage:
• Responds to a loss assessment against the unit owner for damages to
common areas, up to the building limit under the Dwelling Form.
• If there is also damage to the building elements of the unit:
– Coverage combination cannot exceed the maximum coverage limits
available for a single-family dwelling.
– Settlement of the unit building damages applies first and then the loss
assessment.
If RCBAP Insured
to at Least
80 Percent of
the Building
Replacement Cost
If the unit owner has purchased building coverage:
• The loss assessment coverage under the Dwelling Form will pay that
part of a loss that exceeds 80 percent of the association’s building
replacement cost.
• The loss assessment coverage under the Dwelling Form will not cover the
association’s policy deductible purchased by the condominium association.
• The RCBAP is primary and the Dwelling Form is considered excess.
• Coverage combination cannot exceed the maximum coverage limits
available for a single-family dwelling.
If RCBAP Insured
to Less Than
80 Percent of
the Building
Replacement Cost
If the unit owner has purchased building coverage:
• The RCBAP is primary and the Dwelling Form is considered excess.
• The Dwelling Form will respond to a loss assessment resulting from the
coinsurance penalty under the RCBAP, even if the loss did not meet the
RCBAP limits.
Table 37. Residential Unit Owner Coverage in Residential Condominium
Building (Scenario #2) continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 62
3. How to Write
4. Residential Unit Owner Coverage in Non-Residential Condominium
Building (Scenario #3)
Use the Dwelling Form to insure an individual residential condominium unit owner’s
contents in a non-residential condominium building. The unit owner must be named as
the policyholder. Table 39 describes the applicable eligibility and rating requirements.
Table 39. Residential Unit Owner Coverage in Non-Residential
Condominium Building (Scenario #3)
TOPIC GUIDANCE
Eligibility Rules
Policy Form Dwelling Form (Contents Only)
Program Eligibility Regular Program or Emergency Program
Building
Eligibility
A residential condominium unit (or mixed-use unit with non-residential uses limited to
less than 50 percent of the unit’s total oor area) in a non-residential condominium
building with one or more units, including a townhouse or rowhouse
Policyholder
Eligibility
Eligible Policyholders
• Unit owner;
• Condominium association in the name of the unit owner and the association
as their interests may appear; or
• Condominium association for an individual unit owned by the association.
Note: When the applicant is the condominium association, the lender for the
individual unit owner should not appear on the declarations page.
Is the Policyholder
a Condominium
Association?
• Generally select “No”, including if the condominium association purchases
the policy on behalf of a different unit owner.
• Only select “Yes” if the condominium association owns the individual unit.
Property Insured
• Individually-owned contents.
• Interior walls, floor, and ceiling (not otherwise insured under a flood insurance
policy purchased by the condominium association) for not more than 10 percent
of the stated contents coverage amount.
Other Eligibility
Rules
See guidance in Section 2: Before You Start
Geographic Location Variables
See the Geographic Location Variables heading under General Rating Information above
• Building Location
• Community Map Information and Flood Zone
• Community Rating System Discount
Structural Variables
Building
Occupancy
• Select “Residential Unit”
• See the Building Occupancy heading under General Rating Information above
Building
Description
• Select “Residential Condominium Unit (in Non-Residential Building)”
• See the Building Description heading under General Rating Information above
Construction Type Not applicable
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 63
3. How to Write
TOPIC GUIDANCE
Foundation Type
and First Floor
Height
The general guidance applies since even if the unit is not on the rst oor the NFIP is
still interested in the whole building’s foundation and height above ground elevation.
See the Foundation Type and First Floor Height headings under General Rating
Information above.
Building
Replacement Cost
Value
FEMA will determine Building Replacement Cost Value for the unit by using
Application Form data and industry data connected with the property address. If
FEMA is unable to determine the Building Replacement Cost Value, the insurer
must obtain the Building Replacement Cost Value for the unit based on appraisals
commonly used in the industry, and report it on the Application Form. FEMA
reassesses its determination of Building Replacement Cost Value at every renewal.
Number of Elevators Not applicable
Number of Floors
in Building
Indicate the total number of oors in the building even though the policy covers only
an individual unit. Determine the building’s number of oors based on the number of
oors above the ground, excluding enclosures, crawlspaces (on grade or subgrade),
basements, and certain attics (if used only for storage).
Floor of Unit
If coverage is for a unit inside a multi-oor building with units located on different
oors, indicate the oor where the unit to be insured is located. For example, if the
unit is on the ninth oor of a twenty-story building, enter nine.
Total Number
of Units in the
Building
Determine the number of units in the building. If the building contains multiple units,
enter the total number of units in the building, even though the policy covers only a
single unit. For example, if coverage is for a unit within a four-unit building, enter four.
Count both residential and non-residential units.
Other Structural
Variables
For guidance on other structural variables, see the Structural Variables heading
under General Rating Information above.
• Machinery & Equipment Above First Floor
• Proper Openings
• Floodproofing
• Square Footage
• Building Replacement Cost Value
• Prior NFIP Claims
• Severe Repetitive Loss Property
• Date of Construction
• Number of Detached Structures on Property
• Rental Property
• Building Over Water
• Primary Residence Status
Coverage and Deductibles
Maximum
Coverage Limits
Regular Program
• Contents: $100,000
Emergency Program
• Contents: $10,000
ICC Coverage No
Assessment
Coverage
No
Deductibles See the Deductibles heading under General Rating Information above
Table 39. Residential Unit Owner Coverage in Non-Residential
Condominium Building (Scenario #3) continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 64
3. How to Write
TOPIC GUIDANCE
Statutory Discounts
See the Statutory Discounts heading under General Rating Information above
• Newly Mapped Discount
• Pre-FIRM Discount
• Other Statutory Discounts
Assessments, Fees, and Surcharges
Federal Policy Fee $47
Other Assessments
and Surcharges
For guidance see the Assessments, Fees, and Surcharges heading under General
Rating Information above.
• Reserve Fund Assessment
• HFIAA Surcharge
• Probation Surcharge
Claim Settlement
Replacement Cost
Coverage
No
5. Condominium Association Coverage for Non-Residential Condominium
Building (Scenario #4)
Use the General Property Form to insure a non-residential condominium building and
the commonly owned contents. The condominium association must be named as the
policyholder. Table 40 describes the applicable eligibility and rating requirements.
Table 40. Condominium Association Coverage for Non-Residential
Condominium Building (Scenario #4)
TOPIC GUIDANCE
Eligibility Rules
Policy Form General Property Form (Building and Contents)
Program Eligibility Regular Program or Emergency Program
Building
Eligibility
• Non-residential condominium building with one or more units
• Mixed-use condominium building if non-residential uses are 25 percent or more
of the building’s total floor area.
Policyholder
Eligibility
Non-residential condominium association
Is the Policyholder
a Condominium
Association?
Select “Yes”
Table 39. Residential Unit Owner Coverage in Non-Residential
Condominium Building (Scenario #3) continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 65
3. How to Write
TOPIC GUIDANCE
Property Insured
The property insured includes:
• Condominium building.
• Individually owned units within the building.
• Improvements within units.
• Additions and extensions attached or connected to the insured building.
• Fixtures, machinery, and equipment within building.
• Contents owned by the association.
• Non-residential common building elements and the contents..
Note: The NFIP requires a separate policy for each building owned by a condominium
association. Coverage applies to the single building described under Building Location
on the Application Form and Insured Property Location on the Declarations Page.
Other Eligibility
Rules
See guidance in Section 2: Before You Start
Geographic Location Variables
See the Geographic Location Variables heading under General Rating Information above
• Building Location
• Community Map Information and Flood Zone
• Community Rating System Discount
Structural Variables
Building
Occupancy
• Select “Non-Residential Building”
• See the Building Occupancy heading under General Rating Information above.
Building
Description
Select one of the following that best describes the building:
• Commercial
• Detached Garage
• Government-Owned
• House of Worship
• Recreation Building
• Storage/Tool Shed
• Other Non-Residential Type
See the Building Description heading under General Rating Information above
Construction Type Not applicable to the Non-Residential Building occupancy.
Number of Elevators
If there are elevators within the building, enter the total number elevators, including
those located inside an enclosure.
Number of Floors in
Building
Determine the building’s number of oors based on the number of oors above the
ground, excluding enclosures, crawlspaces (on grade or subgrade), basements, and
certain attics (if used only for storage).
Total Number
of Units in the
Building
Determine the number of units in the building. If the building contains multiple units,
count the total number of units in the building including both residential and non-
residential units.
Table 40. Condominium Association Coverage for Non-Residential
Condominium Building (Scenario #4) continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 66
3. How to Write
TOPIC GUIDANCE
Building
Replacement
Cost Value
• The insurer must obtain the Building Replacement Cost Value (including the cost
of the building’s foundation) based on appraisals commonly used in the industry.
• The insurer must maintain supporting documentation of the Building
Replacement Cost Value. Supporting documentation may include a recent
property valuation report stating the value of the building and its foundation
on a replacement cost value basis to meet this requirement.
• Supporting Building Replacement Cost Value documentation is not required if:
– The building description is either Storage/Tool Shed or Detached Garage; or
– The building’s square footage is less than 1,000 square feet.
• The insurer must validate the Building Replacement Cost Value information at
least every 3 years. See notice requirements and a sample version in Appendix I:
Policyholder Communications.
Other Structural
Variables
For guidance on other structural variables, see the Structural Variables heading
under General Rating Information above.
• Foundation Type
• First Floor Height
• Machinery & Equipment Above First Floor
• Proper Openings
• Floodproofing
• Prior NFIP Claims
• Severe Repetitive Loss Property
• Date of Construction
• Number of Detached Structures on Property
• Rental Property
• Building Over Water
• Primary Residence Status
Coverage and Deductibles
Maximum Coverage
Limits
Regular Program
• Building: Not to exceed the lesser of:
– The building’s replacement cost value; or
– $500,000
• Contents: $500,000
Emergency Program
• Building: Not to exceed the lesser of:
– The building’s replacement cost value; or
– $100,000
• Contents: $100,000
ICC Coverage Yes
Assessment
Coverage
No
Deductibles See the Deductibles heading under General Rating Information above
Table 40. Condominium Association Coverage for Non-Residential
Condominium Building (Scenario #4) continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 67
3. How to Write
TOPIC GUIDANCE
Statutory Discounts
See the Statutory Discounts heading under General Rating Information above
• Newly Mapped Discount
• Pre-FIRM Discount
• Other Statutory Discounts
Assessments, Fees, and Surcharges
Federal Policy Fee $47
Other Assessments
and Surcharges
For guidance see the Assessments, Fees, and Surcharges heading under General
Rating Information above.
• Reserve Fund Assessment
• HFIAA Surcharge
• Probation Surcharge
Claim Settlement
Replacement Cost
Coverage
No
6. Non-Residential Unit Owner Coverage in Residential or Non-Residential
Condominium Building (Scenario #5)
Use th
e General Property Form to insure a non-residential condominium unit owner’s
contents in a residential or non-residential building. The unit owner must be named as
the policyholder. Table 41 describes the applicable eligibility and rating requirements.
Table 41. Non-Residential Unit Owner Coverage in Residential or
Non-Residential Condominium (Scenario #5)
TOPIC GUIDANCE
Eligibility Rules
Policy Form General Property Form (Contents Only)
Program Eligibility Regular Program and Emergency Program
Building Eligibility
A non-residential condominium unit in a residential or non-residential condominium
building with one or more units, including a townhouse or rowhouse.
Property Insured
• Contents of non-residential condominium unit.
• A condominium unit owner may apply up to 10 percent of the contents coverage
limit, chosen by the policyholder, to cover loss to interior walls, floor, and ceiling
that are not insured under a policy issued to the condominium association
insuring the condominium building.
• A tenant may apply up to 10 percent of the contents coverage limit to
improvements:
– Made a part of the building the tenant occupies; and
– The tenant acquired, or made at the tenant’s expense, even though the tenant
cannot legally remove.
• This coverage does not increase the amount of insurance that applies to insured
personal property
Table 40. Condominium Association Coverage for Non-Residential
Condominium Building (Scenario #4) continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 68
3. How to Write
TOPIC GUIDANCE
Policyholder
Eligibility
Eligible Policyholders
• Unit owner; or
• Tenant.
Is the Policyholder
a Condominium
Association?
• Generally select “No”, including if the condominium association purchases
the policy on behalf of a different unit owner.
• Only select “Yes” if the condominium association owns the individual unit.
Other Eligibility
Rules
See guidance in Section 2: Before You Start
Geographic Location Variables
See the Geographic Location Variables heading under General Rating Information above
• Building Location
• Community Map Information and Flood Zone
• Community Rating System Discount
Structural Variables
Building
Occupancy
• Select “Non-Residential Building”
• See the Building Occupancy heading under General Rating Information above.
Building
Description
Select one of the following that best describes the building:
• Commercial
• Government-Owned
• House of Worship
• Recreation Building
• Storage/Tool Shed
• Other Non-Residential Type
See the Building Description heading under General Rating Information above
Construction Type Not applicable
Foundation Type &
First Floor Height
The general guidance applies since even if the unit is not on the rst oor the NFIP is
still interested in the entire building’s foundation and height above ground elevation.
See the Foundation Type and First Floor Height headings under General Rating
Information above.
Building
Replacement Cost
Value
• The insurer must obtain the Building Replacement Cost Value for the unit based
on appraisals commonly used in the industry.
• The insurer must maintain supporting documentation of the Building
Replacement Cost Value. Supporting documentation may include a recent
property valuation report stating the value of the unit on a replacement cost
value basis to meet this requirement.
• Supporting Building Replacement Cost Value documentation is not required if:
– The building description is either Storage/Tool Shed or Detached Garage; or
– The building’s square footage is less than 1,000 square feet.
• The insurer must update the Building Replacement Cost Value information at
least every 3 years. See notice requirements and a sample version in Appendix I:
Policyholder Communications.
Number of Elevators Not applicable
Table 41. Non-Residential Unit Owner Coverage in Residential or
Non-Residential Condominium (Scenario #5) continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 69
3. How to Write
TOPIC GUIDANCE
Number of Floors in
Building
Indicate the total number of oors in the building even though the policy covers only
an individual unit. Determine the building’s number of oors based on the number of
oors above the ground, excluding enclosures, crawlspaces (on grade or subgrade),
basements, and certain attics (if used only for storage).
Floor of Unit
If coverage is for a unit inside a multi-oor building with units located on different
oors, indicate the oor where the unit to be insured is located. For example, if the
unit is on the ninth oor of a twenty-story building, enter nine.
Total Number of
Units in the
Building
Determine the number of units in the building. If the building contains multiple units,
enter the total number of units in the building, even though the policy covers only a
single unit. For example, if coverage is for a unit within a four-unit building, enter four.
Count both residential and non-residential units.
Other Structural
Variables
For guidance on other structural variables, see the Structural Variables heading under
General Rating Information above.
• Machinery & Equipment Above First Floor
• Proper Openings
• Floodproofing
• Prior NFIP Claims
• Severe Repetitive Loss Property
• Date of Construction
• Number of Detached Structures on Property
• Rental Property
• Building Over Water
• Primary Residence Status
Coverage and Deductibles
Maximum Coverage
Limits
Regular Program
• Contents: $500,000
Emergency Program
• Contents: $100,000
ICC Coverage No
Assessment
Coverage
No
Deductibles See the Deductibles heading under General Rating Information above
Statutory Discounts
See the Statutory Discounts heading under General Rating Information above
• Newly Mapped Discount
• Pre-FIRM Discount
• Other Statutory Discounts
Assessments, Fees, and Surcharges
Federal Policy Fee $47
Other Assessments
and Surcharges
For guidance see the Assessments, Fees, and Surcharges heading under General
Rating Information above.
• Reserve Fund Assessment
• HFIAA Surcharge
• Probation Surcharge
Table 41. Non-Residential Unit Owner Coverage in Residential or
Non-Residential Condominium (Scenario #5) continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 70
3. How to Write
TOPIC GUIDANCE
Claim Settlement
Replacement Cost
Coverage
No
B. Applying the Condominium Rating Scenarios
Tables 42–44 apply the five scenarios above to various specific situations that can arise
when writing policies for condominium buildings and units. The tables clarify what Building
Occupancy and Building Description to select and what condominium rating scenario and
policy form applies.
Table 42: Single-Family Residential Building or Individual Residential
Townhouse or Rowhouse in a Condominium Complex
Situation
Is the Policyholder
a Condominium
Association?
Building
Occupancy
Building
Description
Rating
Scenario &
Policy Form
Type of
Coverage
Available
Residential Condominium Building or Unit in Such a Building
Single-Family
Residential
Condominium
Building
(a one-unit
building in a
condominium
complex)
YES
(Purchased by the
condominium association
to insure the entire
building)
Residential
Condominium
Building
Entire
Residential
Condominium
Building
Scenario #1:
RCBAP
Building and
Contents
YES or NO
(Purchased by or on behalf
of the unit owner – which
may be the association
– to insure the building’s
single unit, whether or
not the condominium
association has an RCBAP
on the building)
Residential
Unit
Residential
Condominium
Unit (in
Residential
Building)
Scenario #2:
Dwelling
Building and
Contents
Townhouse or Rowhouse Condominium
Individual
Residential
Townhouse or
Rowhouse
(in a row of
townhouse
or rowhouse
condominiums
but insured as a
single building)
YES
(Purchased by the
condominium association
to insure the entire
building)
Residential
Condominium
Building
Entire
Residential
Condominium
Building
Scenario #1:
RCBAP
Building and
Contents
Table 41. Non-Residential Unit Owner Coverage in Residential or
Non-Residential Condominium (Scenario #5) continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 71
3. How to Write
Situation
Is the Policyholder
a Condominium
Association?
Building
Occupancy
Building
Description
Rating
Scenario &
Policy Form
Type of
Coverage
Available
Individual
Residential
Townhouse or
Rowhouse
continued
YES or NO
(Purchased by or on behalf
of the unit owner – which
may be the association –
to insure the townhouse
or rowhouse’s single
unit, whether or not the
condominium association
has an RCBAP on the
building)
Residential
Unit
Residential
Condominium
Unit (in
Residential
Building)
Scenario #2:
Dwelling
Building and
Contents
Table 43: Residential Condominium Building with 2-4 Units, or a Unit
in Such a Building (Non-Townhouse/Rowhouse)
Situation
Is the Policyholder
a Condominium
Association?
Building
Occupancy
Building
Description
Rating
Scenario &
Policy Form
Type of
Coverage
Available
Residential Condominium Building or Unit in Such a Building
Residential
Condominium
Building with
2–4 Units
YES
(Purchased by
the condominium
association to insure
the entire building)
Residential
Condominium
Building
Entire Residential
Condominium
Building
Scenario #1:
RCBAP
Building and
Contents
Residential Unit
in 2–4 Family
Residential
Condominium
Building
YES or NO
(Purchased by or
on behalf of a unit
owner – which may be
the association – to
insure an individual
unit, whether or not
the condominium
association has an
RCBAP on the building)
Residential
Unit
Residential
Condominium Unit
(in Residential
Building)
Scenario #2:
Dwelling
Building and
Contents
Non-Residential
Unit in
2–4 Family
Residential
Condominium
Building
YES or NO
(Purchased by or
on behalf of a unit
owner – which may be
the association – to
insure an individual
unit, whether or not
the condominium
association has an
RCBAP on the building)
Non-Residential
Unit
Pick one:
• Commercial
• Government-
Owned
• House of Worship
• Recreation
Building
• Storage/Tool Shed
• Other Non-
Residential Type
Scenario #5:
General
Property
Contents
Table 42: Single-Family Residential Building or Individual Residential
Townhouse or Rowhouse in a Condominium Complex continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 72
3. How to Write
Table 44: Residential Condominium Building with Five or More Units, or
a Unit in Such a Building (Non-Townhouse/Rowhouse)
Situation
Is the Policyholder
a Condominium
Association?
Building
Occupancy
Building
Description
Rating
Scenario &
Policy Form
Type of
Coverage
Available
Residential Condominium Building or Unit in Such a Building
Residential
Condominium
Building with
Five or More
Units
YES
(Purchased by
the condominium
association to insure
the entire building)
Residential
Condominium
Building
Entire Residential
Condominium
Building
Scenario #1:
RCBAP
Building and
Contents
Residential Unit
in Residential
Condominium
Building with
Five or More
Units
YES or NO
(Purchased by or
on behalf of a unit
owner – which may be
the association – to
insure an individual
unit, whether or not
the condominium
association has an
RCBAP on the building)
Residential
Unit
Residential
Condominium Unit
(in Residential
Building)
Scenario #2:
Dwelling
Building and
Contents
Non-Residential
Unit in
Residential
Condominium
Building with
Five or More
Units
YES or NO
(Purchased by or
on behalf of a unit
owner – which may be
the association – to
insure an individual
unit, whether or not
the condominium
association has an
RCBAP on the building)
Non-Residential
Unit
Pick one:
• Commercial
• Government-
Owned
• House of Worship
• Recreation
Building
• Storage/Tool Shed
• Other Non-
Residential Type
Scenario #5:
General
Property
Contents
Table 45. Non-Residential Condominium Building, or Unit in Such a Building
Situation
Is the Policyholder
a Condominium
Association?
Building
Occupancy Building Description
Rating
Scenario &
Policy Form
Type of
Coverage
Available
Single-Unit Non-Residential Condominium Building, or Unit in Such a Building
Non-Residential
Single-Unit
Condominium
Building
(in a
condominium
complex)
YES
(Purchased by
the condominium
association to insure
the entire building)
Non-Residential
Building
Pick one:
• Commercial
• Detached Garage
• Government-Owned
• House of Worship
• Recreation Building
• Storage/Tool Shed
• Other Non-
Residential Type
Scenario #4:
General
Property
Building and
Contents
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 73
3. How to Write
Situation
Is the Policyholder
a Condominium
Association?
Building
Occupancy Building Description
Rating
Scenario &
Policy Form
Type of
Coverage
Available
Non-Residential
Single-Unit
Condominium
Building
continued
YES or NO
(Purchased by or on
behalf of the unit
owner – which may be
the association – to
insure the building’s
single unit, whether or
not the condominium
association has a
General Property Form
policy on the building)
Non-
Residential
Unit
Pick one:
• Commercial
• Government-Owned
• House of Worship
• Recreation Building
• Storage/Tool Shed
• Other Non-
Residential Type
Scenario #5:
General
Property
Contents
Non-Residential Condominium Building with Multiple Units, or Unit in Such a Building
Non-Residential
Condominium
Building with
Multiple Units
YES
(Purchased by
the condominium
association to insure
the entire building)
Non-Residential
Building
Pick one:
• Commercial
• Government-Owned
• House of Worship
• Recreation Building
• Storage/Tool Shed
• Other Non-
Residential Type
Scenario #4:
General
Property
Building and
Contents
Non-Residential
Unit in a Non-
Residential
Condominium
Building with
Multiple Units
YES or NO
(Purchased by or
on behalf of a unit
owner – which may be
the association – to
insure an individual
unit, whether or not
the condominium
association has a
General Property Form
policy on the building)
Non-Residential
Unit
Pick one:
• Commercial
• Government-Owned
• House of Worship
• Recreation Building
• Storage/Tool Shed
• Other Non-
Residential Type
Scenario #5:
General
Property
Contents
Residential
Unit in a Non-
Residential
Condominium
Building with
Multiple Units
YES or NO
(Purchased by or
on behalf of a unit
owner – which may be
the association – to
insure an individual
unit, whether or not
the condominium
association has a
General Property Form
policy on the building)
Residential Unit
Residential
Condominium Unit
(in Non-Residential
Building)
Scenario #3:
Dwelling
Contents
Table 45. Non-Residential Condominium Building, or Unit in Such a Building continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 74
3. How to Write
IV. Provisional Rating Information
A. General Information
Insurers should use provisional rates to enable coverage when the FEMA system is
unavailable, and when FEMA has provided guidance to use provisional rating.
When the system is once again available to provide a rating engine rate, the insurer will
finish processing the policy or, if the policy was already submitted to FEMA’s system with
the provisional rate, endorse the policy to a rating engine rate. FEMA highly recommends
that the insurer endorse the policy to a rating engine rate within 60 days of the Application
Form submission. The following rules govern use of provisional rating:
• Provisionally rated policies are valid for 1 year.
• Provisionally rated policies cannot be renewed.
• Provisionally rated policies may be endorsed during the policy term or by new
application at renewal to obtain a rating engine rate.
• The insurer must submit the endorsement to FEMA for a premium before any claim
payment in the event of a loss.
• When writing a provisionally rated policy, use the effective date rules in Section 2:
Before You Start No waiting period applies when endorsing to a rating engine rate
unless the policyholder requests increased or additional coverage, in which case
that coverage is subject to a waiting period consistent with the guidance in Section
4: How to Endorse.
• A provisionally rated policy cannot be canceled and rewritten as another provisionally
rated policy.
• The insurer may not endorse a provisionally rated policy to increase coverage until the
policy is endorsed to a rating engine rate.
B. Eligibility
FEMA authorizes NFIP insurers to use provisional rates (at their discretion) in the
following scenarios:
• Planned FEMA maintenance windows.
• Geolocation variable issues – When FEMA’s system does not return one or more
geolocation variables required for rating (for example, distance to flooding source)
based on the submitted geolocation. This does not include scenarios where
FEMA’s geocoder cannot successfully produce a latitude and longitude for a
submitted address.
• Unplanned outages:
– Unplanned FEMA system outage; or
– Issue between FEMA and insurer system where the responsible party is unclear. If
it applied provisional rates, the insurer must report the root cause of the system
issue to FEMA once determined.
FEMA does not authorize NFIP insurers to use provisional rates in the following situations:
• Planned NFIP insurer or vendor maintenance windows
• Known NFIP insurer or vendor system issues
• Issues with FEMA third-party tools: Geocoder, First Floor Height Tool, Replacement
Cost Value
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 75
3. How to Write
The following are eligible for provisional rating:
• All building occupancies
• All policy forms
• All foundation types
• Regular Program and Emergency Program communities
C. Rates
Table 46 shows the provisional rates used to determine premium for all policy types.
Table 46: Provisional Rates for All Policy Types
Policy Type Premium
Building Coverage $5.30 / $1,000 of Building Limit
Contents Coverage $9.80 / $1,000 of Contents Limit
For provisionally rated policies, calculate the building and contents premiums by
applying the rate per thousand to the amount of coverage requested. Provisionally rated
policies are subject to the ICC premium, calculated as 1.9 percent of the building and
contents coverage premiums. The building, contents, and ICC premiums combine to an
adjusted premium. The Reserve Fund Assessment, Federal Policy Fee, HFIAA Surcharge,
and Probation Surcharge (if applicable), and Federal Policy Fee are applied to that
adjusted premium to calculate the total amount due. For additional information, see the
Assessments, Fees and Surcharges heading under General Rating Information above.
Provisionally rated policies are not eligible for CRS discounts. Follow the steps in Table 47
to determine the total amount due.
Table 47. Calculate Premium for a Provisional-Rated Policy
Step Action Reference/Guidance
1 Apply the rate
$5.30 per $1,000 of Building Limits and $9.80 per $1,000 of
Contents Limits.
2
Apply standard
deductible
Apply deductible of $2,000 building / $2,000 contents (only
option).
3
Add ICC premium
(if eligible)
If eligible for ICC coverage, apply 1.9 percent of the building and
contents coverage premiums. For more information about ICC
eligibility, see the ICC Coverage heading above.
4
Apply Reserve
Fund Assessment
Apply 18 percent of the adjusted premium (building, contents, and
ICC premiums).
5
Add HFIAA
Surcharge
See Table 32 “HFIAA Surcharge” under the Assessments, Fees,
and Surcharges heading above to determine the applicable
surcharge.
6
Add Federal
Policy Fee
See Table 33 “Federal Policy Fee” under the Assessments, Fees,
and Surcharges heading above for the applicable fee.
7
Add Probation
Surcharge
Insurer must determine if the community is on NFIP probation. Add
a $50 Probation Surcharge if the community is on probation.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 3 • 76
3. How to Write
D. Premium Adjustments
When the system is available to obtain a rating engine rate, the insurer must submit all
required rating information by endorsement to FEMA. Follow the guidance in Section 4:
How to Endorse on premium-bearing endorsements, in particular the Refund heading if
the rating engine rate is lower than the provisional rate the policyholder initially paid. If the
rating engine rate is higher, follow the guidance under the Reformation Due to Insufficient
Premium or Rating Information heading in Section 2 Before You Start.
E. Notification
The insurer must provide notice to the policyholder, agent and lender (if applicable)
that provisional rating was used and explaining the provisional rating process, the non-
renewability of a provisionally rated policy, the inability to file a claim on a provisionally
rated policy before endorsement to a rating engine rate, and FEMA’s recommendation that
the policy should be re-rated promptly using the endorsement process. See the sample
notification letter in Appendix I: Policyholder Communications.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 4 • 1
4. How to Endorse
This section provides guidance on how to endorse a policy. An endorsement is a change or
correction to an existing NFIP policy that may or may not affect premium.
I. Endorsement Process
A. General Change Endorsement Form
To endorse a policy, submit a completed Endorsement Form (FF-206-FY-21-119 or a
similar request) and attach an updated copy of the Flood Insurance Application Form (FF-
206-FY-21-117) reflecting only the changes to the policy. Supporting documentation and
premium must be submitted with the endorsement request when necessary. Copies of the
forms are located in Appendix B: Forms.
The Endorsement Form cannot be used to:
• Renew a policy;
• Extend or change a policy term; or
• Correct the effective date of a policy.
Please see Reason Code 22 in Section 6: How to Cancel for additional information on
when to cancel and rewrite a policy.
Policies cannot be endorsed to account for rating plan changes during a policy term,
including changes that would decrease premium. Premium-bearing changes must reflect
the rating plan and CRS discounts in place on the policy’s effective date.
Note: If the FEMA system is not available when trying to process an endorsement
transaction, submit the endorsement as soon as the system becomes available.
B. Signatures
A signature is required for all endorsements. The policyholder must sign the General
Change Endorsement Form or similar document when there is a request to reduce policy
limits, increase the deductible, assign the policy, or change the agent of record.
Note: Signatures are not required on the Application Form when it is submitted with the
General Change Endorsement Form (FF-206-FY-21-119).
Insurers can accept electronic endorsement submissions. See the Administrative Topics
heading in Section 2: Before You Start for additional information on electronic signatures.
C. Non-Premium and Premium-Bearing Changes
Endorsement requests may be non-premium or premium-bearing. An endorsement request
can also include non-premium and premium-bearing changes in the same transaction.
When combined, the effective date for the premium-bearing change should be used as the
transaction effective date.
1. Non-Premium Changes
Non-premium changes are endorsements that do not require additional premium to
process the transaction. Examples of non-premium changes include:
• Changing the mailing address.
• Assigning the policy.
• Changing a mortgagee.
• Changing the agent of record.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 4 • 2
4. How to Endorse
a. Process for Submitting a Non-Premium Change
Below is a high-level summary of the process for submitting a non-premium change.
• Agent – Using the insurer system, work with the policyholder to complete the
Endorsement Form and update the Application Form with the endorsement
information and submit it to the insurer.
• Insurer – Validate the endorsement information, determine the endorsement
effective date, issue the policy and declarations page, and report policy data
to FEMA.
2. Premium-Bearing Changes
Premium-bearing changes are endorsements that impact rating variables, which may
change the policy premium and result in a refund or insufficient premium. Similar to the
application process, FEMA will provide the insurer the updated cost information for the
premium-bearing endorsement, using the rating plan and CRS discount in place on the
policy’s effective date. As explained in the process below, the insurer must take the
prorated premium, if necessary, using the determined endorsement effective date and
determine whether a refund or insufficient premium applies.
Examples of premium-bearing changes include:
• Rating adjustment.
• Rating correction.
• Coverage or deductible change.
• Rate category change.
• Adding an Elevation Certificate (EC).
a. Process for Submitting a Premium Change
Below is a high-level summary of the process for submitting a premium change.
• Agent – Using the insurer system, work with the policyholder to complete
the Endorsement Form; update the Application Form with the endorsement
information; and submit the information to FEMA for a premium quote.
• FEMA – Calculate the premium with the updated endorsement information
using the rating plan and CRS discount in place on the policy’s effective date
for the full term; send the updated cost information to the insurer system.
• Insurer – Determine whether a refund or insufficient premium applies.
• Agent – Apprise the policyholder of the total amount due and, if they want to
proceed, collect the premium and any supporting documentation and submit it
to the insurer.
• Insurer – Validate the payment; confirm the policy effective date; issue
a revised declarations page; and report policy data to FEMA. Note: If the
endorsement effective date changes, a new premium quote is required.
b. Statutory Annual Increase Cap
Most premium rates may not increase by more than 18 percent each year, whether
at renewal or by endorsement, except when increasing coverage, decreasing the
amount of the deductible, or reflecting a change in the CRS discount.
1
Certain
premium-bearing changes that are similar to writing a new policy are also exempt
from the 18 percent cap on annual rate increases, for example an endorsement for
1. 42 U.S.C. 4015(e)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 4 • 3
4. How to Endorse
a Policy Form update or correction, completed construction, or a property address
correction (if keyed incorrectly).
D. Refund
Insurers must refund premium if an endorsement results in lowered premium. Insurers
must process the return premium on policy terms for which they are the insurer of record.
The Federal Policy Fee and Probation Surcharge (if applicable) are not subject to calculation
of return premiums. Insurers may not process an endorsement refund for canceled or
inactive policies.
1. Prior Term Refunds (PTRs)
For a return premium request that covers more than two policy terms, lapses in
coverage do not extend the number of policy terms a premium refund can cover. The
insurer must include any lapse in coverage when determining the number of years
allowed for a refund, and must provide proper documentation. The insurer must
reimburse FEMA for any refunds exceeding the allowable amount.
The insurer may choose to process the return premium request or submit the request
and documentation to FEMA for processing. The documentation must include:
• The insurer’s statistical records or declarations pages for each policy term with
evidence of premium payments; and
• An endorsement request with supporting documentation, if applicable, for each
policy term and the premium refund calculation for each policy term.
The insurers should send the request and documentation to FEMA by email at:
NFIPUnderwritingMailbox@fema.dhs.gov.
FEMA will notify the insurer of the premium refunded and the Expense Allowance due
to the NFIP. The insurer must maintain this documentation as part of their underwriting
files. FEMA will return refund requests that are inaccurate or incomplete.
E. Insufficient Premium
If an endorsement results in a higher premium, the insurer must collect the additional
premium before processing the endorsement. The procedures for processing such an
endorsement depend on whether the endorsement is elective (optional for the policyholder)
or required (needed to properly rate the policy). Note that these distinctions are only
relevant when the premium previously paid is insufficient, not when an endorsement
results in a refund. Table 1 describes the procedures that apply in each case.
Table 1. Procedures if a Premium-Bearing Endorsement
Results in Insufficient Premium
Type of Premium-Bearing
Endorsement Procedure If Premium Insufficient
Elective Endorsement
Including but not limited to:
• Coverage or
deductible change
• The insurer must collect the additional premium and receive
payment before processing the endorsement.
• If the insurer receives the full amount due, it processes the
endorsement.
• If the insurer receives payment but less than the full amount due
to purchase the endorsement requested, it must proceed with
endorsing the policy to the amount of coverage that the premium
received can purchase after deducting the costs of all applicable
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 4 • 4
4. How to Endorse
Type of Premium-Bearing
Endorsement Procedure If Premium Insufficient
Elective Endorsement
continued
fees and surcharges. See the applicable procedures under the
Reformation Due to Insufficient Premium or Rating Information
heading in Section 2: Before You Start.
• If the insurer receives no payment, it must nullify the endorsement.
Required Endorsement
Including but not limited to:
• Rating adjustment
• Rating correction
• Correcting or updating the
policy form
• Rate category change
• Knowing that the policy’s current rating is incorrect, the insurer must
endorse the policy whether or not it receives additional premium.
• The insurer must collect the additional premium. If the insurer
receives the full amount due, it processes the endorsement.
• If the insurer receives no payment or a payment less than the full
amount due, see the applicable procedures under the Reformation
Due to Insufficient Premium or Rating Information heading in Section
2: Before You Start. The insurer must process the endorsement to
correct the rating and reform the policy by reducing coverage to the
amount that the premium received can purchase.
Note: When processing a rating correction involving an incorrect
property location or flood zone, follow the guidance under the
Exception When Reforming a Policy Due to an Incorrect Geolocation or
Flood Zone heading in Section 2: Before You Start.
2
II. Coverage and Deductible Changes
A. Adding or Increasing Coverage
Policyholders may add or increase coverage on their policy any time during the policy term.
Upon receiving a completed Endorsement Form and updated Application Form reflecting
only the changes to the policy, FEMA will provide the insurer updated cost information
using the endorsement effective date determined by the insurer based on the guidance
below. The insurer must receive payment before processing an endorsement to add or
increase coverage (see detailed guidance under the Insufficient Premium heading above).
1. Effective Dates for Endorsements Adding or Increasing Coverage
In general, endorsements adding or increasing coverage become effective following a
30-day waiting period. However, there are three exceptions listed below:
• Map Revision Exception: Coverage becomes effective after a 1-day waiting
period during the first 13 months following a flood map revision newly
identifying a building as located within a Special Flood Hazard Area (SFHA)
when it was previously identified as outside of an SFHA.
• Loan Exception: If the initial purchase of additional or increased flood
insurance coverage is in connection with making, increasing, extending, or
renewing a loan secured by the insured property (for example, a mortgage loan)
– and if the NFIP receives the endorsement request and full amount due within
specified timeframes – then no waiting period applies and coverage becomes
effective as of the time of the loan closing.
Table 1. Procedures if a Premium-Bearing Endorsement
Results in Insufficient Premium continued
2. 42 U.S.C. 4015(f)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 4 • 5
4. How to Endorse
• Post-Wildfire Exception: Coverage becomes effective after a 1-day waiting
period if:
– The insured property is privately-owned (property not owned by a federal, state,
local, territorial, or tribal government) and experiences damage caused by a
flood that originated on federal land;
– Post-wildfire conditions on federal lands caused or worsened the flooding; and
– The policyholder purchased the additional or increased coverage either:
> On or before the fire containment date; or
> During the 60-calendar day period following the fire containment date.
See the Effective Dates for New Policies and Endorsements heading in Section 2:
Before You Start for additional information on the 30-day waiting period rule and the
three exceptions.
B. Reducing Coverage
1. Reduction in Building Coverage
During a policy term, policyholders may only reduce building coverage to align the
coverage amount with the current replacement cost value of the insured building or due
to the removal of a portion of the building. Insurers may not accept endorsements that
reduce building coverage without valid explanation. For example, a valid explanation
would be, “A wing of the building was damaged by fire and the building was repaired
without the wing.”
2. Reduction in Contents Coverage
During a policy term, policyholders may only reduce contents coverage when they sell or
remove a portion of the contents, reducing the contents’ value to less than the amount
insured. Insurers may not accept endorsements that reduce contents coverage without
valid explanation. For example, a valid explanation would be, “The policyholder moved out
of the house and a limited amount of insured contents remain at the described location.”
3. Effective Dates for Endorsements Reducing Coverage
The effective date of an endorsement reducing coverage should be the day after
the occurrence causing the request to reduce coverage. The effective date of the
endorsement cannot be earlier than that day.
C. Removing Coverage
Insurers may only remove coverage upon the policyholder’s request in the following instances:
• The building or contents are no longer at the described location.
• The policyholder no longer owns the property.
• There is more than one NFIP policy with building coverage insuring the same building.
• The policyholder wants to remove building coverage while retaining contents
coverage on a Dwelling Form policy insuring a residential condominium unit, only if
there is a Residential Condominium Building Association Policy (RCBAP) in force.
Table 2 outlines how to determine the endorsement effective date and terms eligible for
refund, depending on the reason for removing coverage.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 4 • 6
4. How to Endorse
Table 2. Effective Dates for Endorsements Removing Coverage
Scenario
Endorsement Effective Date &
Terms Eligible For Refund
Building or contents are no longer at
the described location
The date when the building or contents were no
longer at the described location, subject to a
limitation of no more than 5 years prior to the
effective date of the current policy term.
The policyholder no longer owns
the property
The date when the policyholder ceased
ownership of the property, subject to a
limitation of no more than 5 years prior to the
effective date of the current policy term.
For duplicate coverage
• More than one NFIP policy with building
coverage insuring the same building.
• Building coverage removed while retaining
contents coverage for a Dwelling Form
policy insuring a residential condominium
unit if there is a RCBAP in force.
The date when the duplicate coverage began,
subject to a limitation of no more than 5
years prior to the effective date of the current
policy term.
1. Duplicate Coverage
The NFIP does not permit duplicate coverage. Insurers must issue only one building
coverage policy per building, with the exception of condominium coverage as noted
below. If there is more than one policy with building coverage for the same building,
only one building policy can remain in force. The insurer must cancel the policy with the
later effective date, the policy with the earlier effective date will continue. The policy
that remains in force must list all building owners as policyholders, and insurers must
cancel or remove building coverage on all other policies for that building.
When duplicate coverage occurs, the insurer may endorse the policy to remove the
duplicate building coverage effective the date when the duplicate coverage began but
no more than 5 years prior to the effective date of the current policy term. See Table 2
above. The insurer may also cancel the policy for duplicate coverage. Refer to Section
6: How to Cancel for further guidance on canceling a duplicate policy.
If different policyholders have more than one policy covering the same building, the
building owner must choose which policy to keep and the building owner must be
named as a policyholder. For example, if a tenant purchased building coverage, the
insurer must either remove the building coverage from the policy, endorse the policy to
add the building owner as a policyholder, or cancel the policy.
If there is more than one building at the location of the insured property, use the
Application Form’s Building Location section to clearly identify the building to be
insured. For example, five buildings with the same property location may be insured
with separate policies. If necessary, use identifiers such as Building A, B, or C, or
“Smith Hall” in the second line of the street address to distinguish the buildings. Also
select the Building Description that best corresponds to the insured building. If there
are multiple buildings at the same address and the specific building identification is
not clear, a photo of the building or a sketch showing the location of the building on
the property to be insured should be retained in the policy file. This will help in proper
identification of the insured building for the adjustment of claims, especially for multiple
non-residential buildings at the same location.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 4 • 7
4. How to Endorse
When insuring a building with one or more additions, the policyholder must choose
between purchasing one policy or separate policies for the building and each addition
and extension. See Section 2: Before You Start for further guidance on additions and
extensions.
2. Condominium Coverage
Insurers may issue more than one building coverage policy for the same building if
one is an RCBAP for the condominium association and the other a Dwelling Form
policy for a residential condominium unit owner; however, condominium units shall not
receive duplicate coverage or coverage that exceeds the maximum coverage limits. The
combined building coverage between the Dwelling Form policy and the RCBAP cannot
exceed $250,000 for the unit.
For all unit policies, insurers must specify the individual unit insured in the Building
Location section of the Application Form.
D. Changing Deductibles
During the current policy term, insurers can increase or decrease deductibles consistent with
the available options listed in Section 3: How to Write and according to the guidance below.
1. Deductible Increases
Policyholders may increase deductibles during the current policy term. The earliest
effective date of the increased deductible is the date the insurer receives the
endorsement request.
However, if a policyholder with a provisionally rated policy and standard $2,000
deductible selects a higher deductible when transitioning to a rating engine rate, use
the effective date of the current policy term. See Rate Category Change below for
additional information.
2. Deductible Decreases
Insurers may decrease deductibles during the current policy term only in the
following instances:
• If the property has a mortgage and the mortgagee requires a lower deductible.
In this case, the same waiting period guidance above (and in Section 2: Before
You Start) for endorsements that add or increase coverage also applies to
deductible decreases. Therefore, the earliest effective date of a decreased
deductible is generally:
– 30 days from the date the insurer receives the endorsement request; or
– The time of the loan closing, if the mortgagee requests the change in
connection with making, increasing, extending, or renewing a loan secured by
the insured property (for example, a mortgage loan) – and if the NFIP receives
the endorsement request and full amount due within specified timeframes.
• If a policyholder with a provisionally rated policy and standard $2,000
deductible selects a lower deductible when transitioning to a rating engine rate.
– Use the effective date of the current policy term. See Rate Category Change
below for additional information.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 4 • 8
4. How to Endorse
E. Coverage Changes During the Renewal Cycle
The waiting period rules above apply to all endorsements throughout the policy term
including coverage increases before the renewal date. The Renewal Notice the insurer sent
might not reflect endorsement requests received close to the expiration date (for example,
a request to add or increase coverage received within 75 days of the policy expiration
date). When an insurer receives a request for a coverage endorsement close to renewal, it
should submit the policy number and the requested changes to FEMA. FEMA will provide
updated quotes for the renewal coverage options.
1. Adding or Increasing Coverage at Renewal
If the insurer receives a request to add or increase coverage after sending a Renewal
Notice and more than 30 days before the current policy expiration date:
• The insurer shall issue a revised Renewal Notice; and
• If the insurer receives the total amount due for the added or increased coverage
before the end of the 30-day grace period following the policy expiration date,
the added or increased coverage becomes effective at 12:01 a.m. on the policy
renewal date.
If the insurer receives a request to add or increase coverage less than 30 days before
the current policy expiration date, the following rules apply:
• If the endorsement request is to increase coverage to an amount less than Option
B and the insurer receives the additional premium for the increased coverage
before the end of the 30-day grace period following the policy expiration date, the
increased coverage becomes effective at 12:01 a.m. on the policy renewal date.
• If the endorsement request is to add or increase coverage to an amount greater
than Option B, the insurer must issue the renewal policy without the added
coverage or using the Option B coverage amounts, as applicable, and then endorse
the policy with the requested coverage subject to the appropriate waiting period.
2. Reducing Coverage on a Future Renewal Effective Date
If the insurer receives a request to reduce coverage on a policy that renewed with a
future effective date and it receives the request before the effective date, the insurer
may reduce coverage effective on the policy renewal date. The insurer must submit
a completed Endorsement Form and updated Application Form reflecting only the
changes to the policy to FEMA, to obtain the new premium amount. No additional
documentation is required to reduce coverage at the renewal date.
III. Other Premium-Bearing Changes
Upon receiving a completed Endorsement Form and updated Application Form reflecting only
the changes to the policy, FEMA will provide the insurer updated cost information using the
endorsement effective date determined by the insurer based on the guidance below. See
the Refund and Insufficient Premium headings above for additional information on how to
process such premium-bearing changes.
A. Rating Adjustment
A rating adjustment is a type of premium-bearing change used to reflect an update in a
rating variable since the policy was issued. In other words, the prior information used to
rate the policy was correct but now an event has occurred that requires the insurer to add,
update, or change one or more rating variables. For example, a home had one floor at time
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 4 • 9
4. How to Endorse
of renewal but midway through the term the policyholder added an additional floor. Table 3
shows how to determine the endorsement effective date when applying a rating adjustment.
Table 3. Endorsement Effective Date When Applying a Rating Adjustment
PREMIUM STATUS ENDORSEMENT EFFECTIVE DATE
Refund or
Insufficient Premium
If the event that triggered the rating adjustment occurred during
the current policy term, use the event date as the endorsement
effective date.
If the event that triggered the rating adjustment occurred before the
current policy term, use the effective date of the current policy term.
B. Rating Correction
A rating correction is a type of premium-bearing change used to correct one or more rating
variables that were incorrect in a prior transaction on the policy. For example, policy data
indicated a home was one floor but in fact it is two floors. Table 4 shows how to determine
the endorsement effective date when endorsing for a rating correction.
Table 4. Endorsement Effective Date When Applying a Rating Correction
PREMIUM STATUS ENDORSEMENT EFFECTIVE DATE
Refund
If the rating issue first affected the current policy term (either from
the start of the policy term or a portion through an incorrectly rated
endorsement), use the date the rating issue first affected the policy.
If the rating issue first affected the policy during a previous policy term,
use the date the rating issue first affected the policy but no more than
5 years prior to the effective date of the current policy term.
Insufficient
Premium
If the rating issue first affected the current policy term (either from
the start of the policy term or a portion through an incorrectly rated
endorsement), use the date the rating issue first affected the policy.
If the rating issue first affected the policy during a previous policy
term, use the effective date of the current policy term.
Note: For rating corrections involving an incorrect property location or flood zone, see
different effective date guidance under the Exception When Reforming a Policy Due to an
Incorrect Geolocation or Flood Zone heading in Section 2: Before You Start.
3
C. Adding an Elevation Certificate
A policyholder may request to add an EC to help determine the building’s First Floor Height.
When EC information is provided, FEMA’s system compares the EC information with the
FEMA-determined First Floor Height and provides the lowest premium for the policyholder.
An endorsement to add EC information will not result in insufficient premium.
Upon receiving a completed Endorsement Form and updated Application Form reflecting
only the changes to the policy, FEMA will provide the insurer the updated annual cost
for a full policy term. If the updated cost is lower than the premium previously paid, the
3. 42 U.S.C. 4015(f)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 4 • 10
4. How to Endorse
insurer must calculate the refund amount based on the effective date of the current policy
term. See the Refund heading above for additional information on how to process such a
premium-bearing endorsement.
Table 5. Endorsement Effective Date When Using an EC
FIRST FLOOR HEIGHT PREMIUM STATUS
ENDORSEMENT
EFFECTIVE DATE
Higher First Floor Height value
than FEMA determined
This produces a lower premium
Refund
The effective date of the
current policy term
Lower First Floor Height value
than FEMA determined
This results in no change to premium
No Change
N/A
D. Community Information
1. Change in Program Status
The insurer must submit an endorsement request to revise the policy rating to reflect
the correct community status when the community converts from the Emergency
Program to the Regular Program.
2. Change in Community Rating System (CRS) Status
If a community’s CRS class changes or a given policy’s eligibility for a CRS discount
changes midway through a policy term, any resulting adjustment to the CRS discount
applies only at the next policy renewal.
E. Construction Completed
For a building under construction, when the construction is complete, then the policy
must be endorsed to reflect that the building is no longer under construction and update
any other rating variables as needed. Follow the guidance under the Rating Adjustment
heading above.
If an EC was used to determine the First Floor Height, an updated EC and photos based
on finished construction are required.
F. Incorrect Policy Form
If the insurer discovers that a policy requires a different Standard Flood Insurance Policy
(SFIP) form, how it processes the change depends on the specific issue:
• If the policy form was correct before but an event changed the applicable policy
form, the insurer must endorse the policy to the correct form. Follow the guidance
under the Rating Adjustment heading above regarding refunds, insufficient premium,
and effective dates.
• If the policy was written using an incorrect policy form, the insurer must likewise
endorse the policy to the correct form. Follow the guidance under the Rating
Correction heading above.
However, in either case, if the policy is currently written on the Dwelling Form or General
Property Form when the Residential Condominium Building Association Policy Form is
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 4 • 11
4. How to Endorse
appropriate, or vice versa, the insurer must cancel and rewrite the coverage under the
correct form with the original effective date. See additional guidance under Reason Code
22 “Cancel and rewrite due to administrative error” in Section 6: How to Cancel.
The insurer must set the amount of building or contents coverage according to the
provisions of the correct policy form. The coverage amount under the correct policy form
must equal (and may not exceed) the coverage amount under the prior policy form, and
may not exceed the maximum coverage limits available on the correct policy form. If the
premium previously received is insufficient to restore the originally requested amount of
coverage under the correct policy form, the insurer must follow applicable procedures
under the Reformation Due to Insufficient Premium or Rating Information heading in
Section 2: Before You Start. If the policyholder requests to increase coverage above the
prior coverage amount, the insurer must follow the standard endorsement procedures for
adding or increasing coverage included in this section, including endorsement effective
date rules.
Before making any loss payment, the insurer must complete the policy endorsement or
cancel/rewrite to correct the policy form. The provisions of the correct policy form apply,
as does the guidance in Section 2: Before You Start on how to handle a claim involving
policy reformation.
G. Property Address Corrections
The insurer may endorse a policy to correct a property address without FEMA approval, but
may not change an address to insure a different building at the same or another location.
(A different building would require a new policy.) When processing a property address
correction, the insurer must include documentation substantiating the change in the
underwriting file. Examples include a typographical error correction, addition of a specific
unit number, or a U.S. Postal Service address revision.
A property address endorsement is generally considered as a non-premium change such as
a U.S. Postal Service address (911) change. However, when a property address correction
indicates a possible building location change that may impact its geocoding (for example,
1000 Water Street corrected to 2000 Water Street), then the insurer must cancel and
rewrite the policy using the correct address. A property address correction is exempt of the
annual increase cap.
If a claim is pending, the insurer must obtain authorization from FEMA before correcting the
address and making a claim payment. The authorization (waiver) must indicate that:
• The building description, coverage, and rating elements belong to the building at the
address indicated on the endorsement; and
• The policyholder has no insurable interest in the building at the prior, incorrect address.
Insurers may not endorse or transfer a flood policy to change the insured building, location,
or unit. Examples include relocating to a different building, a unit within the same building
or moving a mobile home or travel trailer to a new location. To insure a different building
at the same location or another location, the policyholder must purchase a new policy for
each additional building identified.
H. Rate Category Change
A policy issued with a provisional rate should be endorsed to a rating engine rate during the
initial policy term. FEMA highly recommends that the insurer endorse the policy to a rating
engine rate within 60 days of the Application Form submission. Such an endorsement
may result in either a premium refund or insufficient premium. Upon receiving a completed
Endorsement Form and updated Application Form, FEMA will provide the insurer the
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 4 • 12
4. How to Endorse
updated annual cost for a full policy term. The insurer must calculate the refund amount
or amount due. See the Refund and Insufficient Premium headings above for additional
information on how to process such a premium-bearing endorsement.
Table 6. Endorsement Effective Date for a Rate Category Change
PREMIUM STATUS ENDORSEMENT EFFECTIVE DATE
Refund or
Insufficient
Premium
Use the effective date of the current policy term.
I. Examples of Other Premium-Bearing Changes
Table 7 lists some examples of what FEMA considers a rating adjustment, rating
correction, or other types of endorsements. The table also includes documentation
requirements when applicable, indication if premium is exempt from the 18 percent cap
on annual rate increases, and what selections to make on the Endorsement Form. See
guidance above for effective date rules.
Table 7. Examples of Other Premium-Bearing Endorsements
Endorsement
Scenario
Documentation
Requirements
Exempt From
18% Cap On
Annual Rate
Increases
Endorsement Form
Reason For Change
Options
(Select from the
options below)
Endorsement Form
Type Of Change
Options
(Select Premium
Change and the option
specified below)
Adding an
Elevation
Certificate
• EC
• Photos
• Building
Information
• Adding an Elevation
Certificate
Building
Description
• Building
Information
• Rating Adjustment
• Rating Correction
Building
Occupancy
• Building
Information
• Rating Adjustment
• Rating Correction
Change in
Community
Rating System
Exempt
• N/A (Effective at
next policy renewal)
• N/A (Effective at next
policy renewal)
Change in
Program Status
• Community
Information
• Rating Adjustment
Construction
Type
• Building
Information
• Rating Adjustment
• Rating Correction
Flood Openings
See the Proper Openings
heading in Section 3: How
to Write for additional
information
• Building
Information
• Rating Adjustment
Floodproofed
See the Floodproofing
heading in Section 3: How
to Write for additional
information
• Building
Information
• Rating Adjustment
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 4 • 13
4. How to Endorse
Endorsement
Scenario
Documentation
Requirements
Exempt From
18% Cap On
Annual Rate
Increases
Endorsement Form
Reason For Change
Options
(Select from the
options below)
Endorsement Form
Type Of Change
Options
(Select Premium
Change and the option
specified below)
Foundation Type
• Building
Information
• Rating Adjustment
• Rating Correction
Machinery and
Equipment
Discount Eligible
• Building
Information
• Rating Adjustment
Number of Floors
• Building
Information
• Rating Adjustment
• Rating Correction
Policy Form Exempt
• Policy Form
• Rating Adjustment
• Rating Correction
• Or not an endorsement
but instead a cancel/
rewrite
Primary
Residence
Status
See the Primary
Residence Status heading
in Section 3: How to Write
for additional information.
• Building
Information
• Rating Adjustment
• Rating Correction
Property Address
Correction
Exempt (if
cancel/rewrite)
• Property Address
(Correction)
• Non-premium change
if due to a U.S. Postal
Service address
(911) change
• Or not an endorsement
but instead a cancel/
rewrite
Rate Category
Change
• Rate Category • Rate Category Change
Replacement
Cost Value
• Building
Information
• Rating Adjustment
• Rating Correction
Statutory
Discount
See the Statutory
Discounts heading in
Section 3: How to Write
for additional information.
• Statutory
Discounts
• Rating Adjustment
• Rating Correction
Substantially
Improved
Exempt
• Building
Information
• Rating Correction
• Rating Adjustment
Construction
Completed
If using an EC, provide
an updated EC and
photos based on finished
construction.
Exempt
• Construction
Completed
• Rating Adjustment
IV. Assignment of a Policy
The owner of an insured building may provide written consent to assign a flood insurance policy with building
coverage to the purchaser of the building. Owners may not assign contents-only policies or policies on
Table 7. Examples of Other Premium-Bearing Endorsements continued
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 4 • 14
4. How to Endorse
buildings under construction. The seller must sign the assignment endorsement on or before
the closing date, and the new building owner has up to 30 days beyond the closing date
(closing date plus 29 days) to submit the Endorsement Form to the insurer for processing.
If the building is a primary residence, the insurer must validate the primary residence status
at the time of assignment for the assignee to be eligible for the primary residence status.
Note: A new owner may receive the same discounted premium as the previous owner.
However, the annual increase cap (which is a component of the discounted premium) is
based on the information provided by the new owner. The discounted premium does not
include assessments, fees, or surcharges.
A. Assignment with Building Purchase
The owner and seller of an insured building may assign the flood policy to the
purchaser of the insured building. The assignment becomes effective on the date of
the ownership transfer.
B. Assignment without Building Purchase
The owner of an insured building may assign the flood policy to the new building owner,
effective on the date of the ownership transfer. Examples include inheritance, gifting,
divorce, estate, trust, or foreclosure.
Note: Policyholders cannot assign policies that cover buildings under construction or for
contents only.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 5 • 1
5. How to Renew
NOTE: This section applies to renewing NFIP policies that are already
under the new pricing methodology.
This section provides information and guidance on how to renew an NFIP flood
insurance policy.
I. General Information
See Table 1 below for general policy renewal information.
Table 1. General Renewal Information
SUBJECT GUIDANCE
Policy Terms
• The Standard Flood Insurance Policy (SFIP) contract is for one year only.
• All policies expire at 12:01 a.m. on the last day of the one-year
policy term.
• A new policy term and new contractual agreement between the
policyholder and the insurer begins when an expiring policy renews.
Rating Plan
• All policies renew using the rating plan and Community Rating System
(CRS) discounts in effect on the policy renewal effective date.
Premium Payment
• The insurer must receive the total amount due to renew the policy at
the coverage amount offered on the renewal bill.
• Paying the premium 30 days or more after the expiration date of the
policy causes a lapse in coverage that may affect policy rating (see the
Statutory Discounts heading in Section 3: How to Write).
• All references to days are calendar days, not business days.
Severe Repetitive Loss
(SRL) Properties
• The NFIP Special Direct Facility, operated by NFIP Direct, processes the
policy renewals for SRL properties (see Appendix F: SRL Properties for
more information).
II. Renewal Process
A. Starting the Renewal Process
Before generating the Renewal Notice, the insurer must send the policy number, along with
any changes to policy information, to FEMA. FEMA will provide the premium options for the
policy renewal. The premium amount(s) may reflect updates to certain rating variables,
such as the building replacement cost value (see Section 3: How to Write for information
on rating variables). The insurer should request the renewal quote no sooner than 90 days
before the policy expiration date.
All renewals will increase or decrease to their full-risk premium, subject to the statutory
caps on annual increases.
1. Renewal Notice
The insurer must send a Renewal Notice to the payor listed on the policy declarations
page at least 45 days before the policy expiration date. The insurer must also send
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 5 • 2
5. How to Renew
a copy of the Renewal Notice to all parties listed on the policy declarations page. The
Renewal Notice copy should state “THIS IS NOT A BILL.” See detailed Renewal Notice
requirements in Appendix I: Policyholder Communications.
2. Amounts of Insurance on the Renewal Notice
The insurer must submit required policy information so FEMA’s system can calculate the
premium to renew the policy. The insurer may present the payor with two coverage options:
• Option A – Renewing for the Same Amounts of Insurance:
– This option provides the current amounts of insurance and applicable
deductibles.
• Option B – Renewing for Higher Amounts of Insurance:
– This option provides an inflation option of 10 percent for building coverage and
5 percent for contents coverage with applicable deductibles.
– The amount of insurance offered cannot exceed the maximum limits.
– The minimum deductible may change based on the amount of insurance offered
at renewal.
3. Final Notice
If the insurer does not receive the premium payment by the policy expiration date, it
must send a Final Notice, on the policy expiration date, to all parties listed on the prior
policy declarations page.
The Final Notice must include the same information printed on the Renewal Notice and
state that coverage has expired. See detailed Final Notice requirements in Appendix I:
Policyholder Communications.
Lender Protection
Coverage will continue for lenders listed on the declarations page for 30 days from the
date the Final Notice was sent, as required under the Mortgage Clause of the SFIP (see
Appendix A: Policy).
Therefore, the following requirements apply:
• The Final Notice to the lender must indicate that coverage will terminate if the
premium is not received within this 30-day period.
• The insurer must be able to reproduce copies of the Final Notice to the mortgagee.
• The insurer must have processes in place to verify when the Final Notice was sent.
Notice Type
B. Renewal Notification Requirements
Table 2 below summarizes renewal notification requirements.
Table 2. Renewal Notification Requirements
Payor
All Other Parties Listed on the
Declarations Page
Renewal Notice
Insurer sends the Renewal Notice
for payment at least 45 days before
the policy expiration date.
Insurer sends a copy of the Renewal
Notice at least 45 days before the
policy expiration date.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 5 • 3
5. How to Renew
Table 2. Renewal Notification Requirements continued
Notice Type Payor
All Other Parties Listed on the
Declarations Page
Final Notice
Insurer sends the Final Notice on
the policy expiration date.
Insurer sends a copy of the Final
Notice on the policy expiration date.
Policy
Declarations Page
Insurer sends the policy
declarations page after
receiving payment.
Insurer sends the policy declarations
page after receiving payment.
C. Premium Payment
The payor may pay the premium by check, credit card, or electronically. The insurer must
receive the premium within 30 days of the policy expiration date (includes policy expiration
date plus 29 days).
Table 3. Premium Payment
METHOD GUIDANCE
Check The payor can pay by a check payable to the insurer.
Credit Card
The payor can make a payment by credit card, if the insurer accepts
credit card payments.
Electronic Transfers
The insurer may use electronic transfers if its process includes
authentication of signatures and dates of receipt of premium.
Certified Mail
The payor can submit a payment by certified mail, and the payment
receipt date is the certified mail date. The term certified mail extends
to certified mail sent via the U.S. Postal Service or reputable third-
party delivery services that provide proof of the actual mailing and
delivery date to the insurer.
1. Invalid Payment
A payment is invalid if there are non-sufficient funds (NSF) in the account, such as a
successfully completed reversal (dispute) of an electronic payment, or the payment is
non-negotiable for any other reason. The insurer may not use the receipt date of an
invalid payment to determine the effective date of a policy renewal. Upon notification
that the payment is invalid, the insurer must:
• Cancel or nullify the transaction associated with that payment; and
• Send notification of the cancellation or nullification to the policyholder, agent, and
lender(s), if applicable.
If the insurer receives a new valid payment, it must process the transaction based on
the new premium receipt date. The insurer must determine the effective date of the
transaction based on the new payment receipt date, subject to the effective date rules.
Note: A new Flood Insurance Application Form is required if the renewal effective date
is changed.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 5 • 4
5. How to Renew
2. Insufficient Payment
An insufficient payment is when the insurer receives a payment less than the
amount shown on the bill, resulting in an underpayment. The insurer must send an
underpayment notice for the additional premium.
• If the insurer receives the additional premium within 30 days of the underpayment
notice, the policy will renew at the original requested amount.
• If the insurer does not receive the additional premium within 30 days of the
underpayment notice, then the insurer must reduce the coverage to the amount
that the premium received will purchase.
For more information, see the Reformation Due to Insufficient Premium or Rating
Information heading in Section 2: Before You Start.
D. Determine the Renewal Effective Date
The date the insurer receives the premium will determine the renewal effective date, except
for payments sent by certified mail. See Table 3 for more information on certified mail and
use Table 4 to determine the renewal effective date.
Table 4. Determine the Renewal Effective Date
RECEIPT DATE RENEWAL DATE EXAMPLE
Within 30 days
of the policy
expiration date
The insurer renews the policy
with the same effective date and
policy number as the previous term
without a lapse in coverage.
1
If the policy expires on May 1
and the insurer receives payment
before May 30, then the effective
date of the policy is May 1.
On or after 30 days
following the policy
expiration date
Due to the lapse in coverage,
the insurer cannot renew the
expired policy. The insurer must
receive a new Application Form
with payment after validating the
rate. The standard 30-day waiting
period will apply; the lapse may
affect policy rating.
If the policy expires on May 1 and
the insurer receives payment on
June 15, the insurer must require a
new Application Form with the full
annual premium and apply the 30-
day waiting period.
Note: If the last day of the grace period falls on a Saturday, Sunday, or holiday, the
deadline does not extend to the next business day.
Upon receipt of the total amount due, the insurer must send the policy declarations page
to the policyholder and all parties listed on the policy.
III. Additional Information
A. Renewal by Application or Recertification Questionnaire
If the insurer does not have all the updated policy information required to calculate the
renewal premium, it may not generate a Renewal Notice until it obtains the information
through an Application Form or Recertification Questionnaire submitted by the agent.
2
No less than 45 days before policy expiration, the insurer must notify any lender listed
on the declarations page of the requirement for renewal by use of an Application Form
1. 44 CFR Part 61, Appendix A(1)-(3), VII.E.2
2. 44 CFR Part 61, Appendix A(1)-(2), VII.E.4; 44 CFR Part 61, Appendix A(3), VII.E.3.c
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 5 • 5
5. How to Renew
or Recertification Questionnaire. On the expiration date, the insurer must send the Final
Notice to the payor and all parties listed on the prior policy declarations page.
Examples of situations that may require an Application Form or Recertification
Questionnaire include, but are not limited to:
• FEMA re-underwriting requirements resulting from an audit, quality review, or
program changes.
• Substantial improvement of the building.
• New additions or extensions to the building (even when not a substantial
improvement).
• The building was under construction during the previous policy term.
• Need for a rating correction discovered by the insurer during an internal quality review.
• An incorrect geolocation or flood zone (see related guidance under the Exception
When Reforming a Policy Due to an Incorrect Geolocation or Flood Zone heading in
Section 2: Before You Start).
B. Nonrenewal
The insurer may not renew a policy for an ineligible risk.
If a property becomes ineligible for coverage during a policy term, the insurer may not
generate a Renewal Notice or renew the policy. Examples of such situations include, but are
not limited to:
• The NFIP suspended the community in which the building is located.
• A state or local authority declared the property in violation of its floodplain
management regulations (a Section 1316 property).
• A structure that no longer meets NFIP eligibility requirements (see the Building
Eligibility heading in Section 2: Before You Start).
On the expiration date, the insurer must notify all parties listed on the prior policy
declarations page of the non-renewal by sending a Final Notice.
If the insurer discovers that the property was not eligible for coverage at time of application,
see Reason Code 06 in Section 6: How to Cancel for additional guidance.
Note: A policy may not renew with provisional rates. FEMA highly recommends that the insurer
endorse the policy to a rating engine rate within 60 days of the Application Form submission.
C. Coverage Changes During the Renewal Cycle
The Renewal Notice the insurer sent might not reflect endorsement requests received close
to the expiration date (for example, a request to add or increase coverage received within
75 days of the policy expiration date). When an insurer receives a request for a coverage
endorsement close to renewal, it should submit the policy number and the requested
changes to FEMA. FEMA will provide updated quotes for the renewal coverage options.
1. Adding or Increasing Coverage at Renewal
If the insurer receives a request to add or increase coverage after sending a Renewal
Notice and more than 30 days before the current policy expiration date:
• The insurer shall issue a revised Renewal Notice; and
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 5 • 6
5. How to Renew
• If the insurer receives the total amount due for the added or increased coverage
before the end of the 30-day grace period following the policy expiration date,
the added or increased coverage becomes effective at 12:01 a.m. on the policy
renewal date.
If the insurer receives a request to add or increase coverage less than 30 days before
the current policy expiration date, the following rules apply:
• If the endorsement request is to increase coverage to an amount less than Option
B and the insurer receives the additional premium for the increased coverage
before the end of the 30-day grace period following the policy expiration date, the
increased coverage becomes effective at 12:01 a.m. on the policy renewal date.
• If the endorsement request is to add coverage or increase coverage to an amount
greater than Option B, the insurer must issue the renewal policy without the
added coverage or using the Option B coverage amounts, as applicable, and then
endorse the policy with the requested coverage subject to the appropriate waiting
period. See the Adding or Increasing Coverage heading in Section 4: How to
Endorse for additional information.
2. Reducing Coverage on a Future Renewal Effective Date
If the insurer receives a request to reduce coverage on a policy that renewed with a
future effective date and it receives the request before the effective date, the insurer
may reduce coverage effective on the policy renewal date. See the Reducing Coverage
heading in Section 4: How to Endorse for further guidance.
3. Other Premium-Bearing Endorsements at Renewal
If the insurer receives a request to update other premium-bearing changes at renewal,
the insurer must send the policy number, along with any changes to policy information,
to FEMA. FEMA will provide the new renewal premium due for the policy term. If the
policy has renewed, see Section 4: How to Endorse for further guidance.
D. Transfer of Business at Renewal
A transfer of business occurs when either:
• A policyholder or agent moves any or all of their existing business from one insurer
to another; or
• A WYO company moves all of its existing business to another WYO company or to
the NFIP Direct.
For more information on transfer of business, including when this occurs at renewal, see
the Assignment and Transfer of Business heading in Section 2: Before You Start.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 6 • 1
6. How to Cancel
Under certain circumstances, NFIP insurers may cancel flood insurance policies through
the remainder of a policy’s term or for the entire term. NFIP insurers may also nullify or
void a policy through the policy’s entire term, where eligible. This section describes the
procedures for canceling, nullifying, or voiding a policy and whether the policyholder is
entitled to a full, partial, or no refund.
I. General Information
• To cancel or nullify (void) a policy, a completed cancellation/nullification or similar
request with proper documentation must be submitted to the insurer.
• The receipt date of the cancellation or nullification request is the date the insurer
receives the request with the proper documentation. If additional documentation
is required by the insurer, it must be received within 60 days of the insurer’s
notification in order to retain the original receipt date. If received more than 60
days after the notification, then the receipt date will be the date the additional
documentation was received.
• Unless otherwise specified within the reason code description, a policy may be
canceled for up to 5 years prior to the receipt date of the cancellation request,
if applicable. Insurers must include any lapse in coverage when determining the
number of years allowed for a refund as a lapse in coverage does not extend the
number of policy terms allowed.
• If there is an open claim on a policy, then the policy cannot be canceled.
• If there is a closed paid claim on a policy term, then that policy term cannot be
canceled, except under reason codes 1, 2, 3, 4, 10, and 21 which allow cancellation
after the loss date.
• If there is a claim closed without payment on a policy term, the policy term can
be canceled.
• After processing a cancellation or nullification request, the insurer must provide
the policyholder and all interested parties with a notice advising of the cancellation
or nullification. Interested parties include any additional policyholders, additional
lenders, loss payees, trustees, or disaster assistance agencies.
Note: A copy of the Flood Insurance Cancellation/Nullification Request Form is in Appendix
B: Forms.
II. Valid Cancellation Reason Codes
The tables that follow provide the valid reason codes for canceling or nullifying an NFIP
policy, with specific conditions applicable to each.
Table 1 shows how the valid reason codes
are grouped by topic rather than numerical order.
Table 1: Valid Cancellation Reason Codes
TOPIC REASON CODES
A. No Insurable Interest
01 – Building sold, removed, or destroyed
02 – Contents sold, removed, or destroyed
07 – Property closing did not occur
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 6 • 2
6. How To Cancel
TOPIC REASON CODES
B. Establish a Common
Expiration Date
03 – Policy canceled and rewritten to establish a
common expiration date with other insurance
coverage for the same building
C. Duplicate Coverage
04 – Duplicate NFIP policies
10 – Condominium unit or association policy
converting to RCBAP
26 – Duplicate policy from a source other than NFIP
D. Not Eligible for
Coverage
06 – Property not eligible for coverage at time of
application
27 – Property becomes ineligible for coverage during
policy term
29 – Building physically altered and no longer eligible
for NFIP coverage
E. Lender No Longer
Requires Insurance
28 – Insurance no longer required by lender
F. Invalid Payment
or Fraud
05 – Invalid payment
23 – Fraud or Misrepresentation
30 – Insufficient premium to retain coverage
G. Other Reason Codes
13 – Nullification prior to policy effective date
20 – SRL written with incorrect insurer
21 – Continuous lake flooding or closed basin lakes
22 – Cancel and rewrite due to administrative error
For specific guidance on each reason code please see the tables below.
Note: Over time FEMA has retired some reason codes.
A. No Insurable Interest
Reason Code 01 Building sold, removed, or destroyed
1
Conditions
The insurer may cancel the policy if the policyholder had an insurable interest
in the insured property during the policy term, but no longer has an insurable
interest. For example:
• The policyholder sold or transferred ownership of the insured building and
no longer has an insurable interest in the insured building.
• Relocation or destruction of the insured building.
• The builder or developer requests to cancel a policy mid-term because
ownership transferred to a newly-created condominium association and
the association purchased a policy under its name.
• The lienholder foreclosed on the building.
Table 1: Valid Cancellation Reason Codes continued
1. 44 CFR Part 61, Appendix A(1)-(3), VIII.D.2; 44 CFR § 62.5(b)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 6 • 3
6. How To Cancel
Reason Code 01 Building sold, removed, or destroyed
1
Cancellation
Effective Date
The date the policyholder ceased to have an insurable interest in the
building. Examples include the date of the sale of the building or the date the
policyholder removed the building from the described location.
Policy Terms
Eligible for Refund
The term the policyholder ceased to have an insurable interest and
subsequent renewed policy terms but no more than 5 years prior to the date
of the cancellation request.
Type of Refund
A pro-rata premium refund excluding the Federal Policy Fee and Probation
Surcharge is applied to the policy term canceled. For any subsequent
renewed terms eligible for refund, full premium refunds including surcharges
and fees apply.
Required
Documentation
Evidence of the sale, transfer, removal, or destruction of the building, such as:
• Bill of sale;
• Settlement statement;
• Closing disclosure statement;
• Proof of removal;
• Proof of destruction; or
• Court documentation for foreclosed buildings.
Reason Code 02 Contents sold, removed, or destroyed
2
Conditions
The insurer may cancel a contents-only policy if the policyholder had an
insurable interest in the insured property during the policy term, but no longer
has an insurable interest. For example:
• The policyholder sold or transferred ownership of the insured contents.
• The contents were completely removed or relocated from the
described location.
• The contents were destroyed by any peril.
Cancellation
Effective Date
The date the policyholder ceased to have an insurable interest in the contents
at the described location, or the removal date of the contents from the
described location.
Policy Terms
Eligible for Refund
The term the policyholder ceased to have an insurable interest and
subsequent renewed policy terms but no more than 5 years prior to the date
of the cancellation request.
Type of Refund
A pro-rata premium refund excluding the Federal Policy Fee and Probation
Surcharge is applied to the policy term canceled. For any subsequent
renewed terms eligible for refund, full premium refunds including surcharges
and fees apply.
Required
Documentation
Evidence of contents sold, removed, or destroyed such as:
• Bill of sale;
• Inventory record;
• Proof of destruction; or
• In the case of residential contents, a signed statement from the
policyholder or a policyholder’s representative.
2. 44 CFR Part 61, Appendix A(1)-(3), VIII.D.2; 44 CFR § 62.5(b)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 6 • 4
6. How To Cancel
Reason Code 07 Property closing did not occur
3
Conditions
The insurer may nullify (void) a policy when the policyholder never had an
insurable interest in the property listed on the Flood Insurance Application
Form because the property closing did not occur. This typically occurs when:
• The anticipated transfer of the property (typically, but not always, a loan
closing) does not take place.
Cancellation
Effective Date
The policy will be nullified from the beginning of the policy term.
Policy Terms
Eligible for Refund
Current policy term.
Type of Refund
Full premium refund including fees and surcharges, less any claim payments
made during the nullified policy term.
Required
Documentation
A signed cancellation request or a signed statement from the policyholder
that the closing did not occur. See the sample verification letter in Appendix I:
Policyholder Communications.
B. Establish a Common Expiration Date
Reason Code 03
Policy canceled and rewritten to establish a common expiration date with
other insurance coverage for the same building
4
Conditions
The insurer may cancel and rewrite an NFIP policy with building coverage to
establish a common expiration date with other insurance coverage if:
• The other insurance coverage is for building coverage on the same building
insured by the existing NFIP policy being canceled and rewritten;
• The agent submits a new Application Form and premium;
• The insurer remains the same for the new NFIP policy with the same or
higher amounts of coverage; and
• The coverage for the new policy is effective before canceling the
existing policy.
Note: The new policy is not subject to a waiting period. However, coverage
beyond the limits of the canceled policy will be subject to a 30-day
waiting period.
Cancellation
Effective Date
The cancellation effective date is the effective date of the new flood policy.
Policy Terms
Eligible for Refund
Current policy term.
Type of Refund
Pro-rated premium refund calculated from the effective date of the new
policy to the end date of the previous policy, including ICC premium, and
Reserve Fund Assessment, but not the HFIAA Surcharge Federal Policy Fee or
Probation Surcharge.
Required
Documentation
• A copy of the new flood policy declarations page; and
• A copy of the other insurance policy declarations page.
Note: These pages must show the building address and policy effective dates.
3. 44 CFR Part 61, Appendix A(1)-(3), VIII.B.1.c
4. 44 CFR Part 61, Appendix A(1)-(3), VIII.C; 44 CFR § 62.5(d)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 6 • 5
6. How To Cancel
C. Duplicate Coverage
Reason Code 04 Duplicate NFIP policies
5
Conditions
Duplicate Policies with Same Policyholder
If the same policyholder has more than one policy covering the same building,
contents, or both, then the insurer must cancel the policy with the later
effective date. The policy with the earlier effective date will continue.
However, if both policies have the same policy effective date, the policyholder
may choose which policy will remain in effect.
Notwithstanding the above, the insurer may cancel the policy with the earlier
effective date for one of the following reasons:
• Cancellation of the earlier policy to establish a common expiration date with
other insurance coverage for the same building (see Reason Code 03).
• Cancellation of a Dwelling Form policy with only building coverage on
a residential condominium unit that is also insured by a Residential
Condominium Building Association Policy (RCBAP) on the building that was
issued at the maximum limit for building coverage (see Reason Code 10).
• The policy with the earlier effective date expired more than 30 days before
the cancellation request.
• The policy with the earlier effective date is a Group Flood Insurance Policy
(GFIP) and the policy with the later effective date is a regular SFIP.
Duplicate Policies with Different Policyholders
If different policyholders have more than one policy covering the same
building, the building owner must choose which policy to keep and the
building owner must be named as a policyholder. For example, if a tenant
purchased building coverage, the insurer must either remove the building
coverage from the policy, endorse the policy to add the building owner as a
policyholder, or cancel the policy.
Cancellation
Effective Date
Consistent with the guidance above, the cancellation effective date will
be either:
• If the duplicate policies have the same effective date, then the effective
date of the policy the insured chooses to cancel; or
• If the duplicate policies have different effective dates, then the effective
date of the later policy.
Note: If the premiums for the two policies differ, the insurer must verify that
the rating of the policy that will remain in effect is correct.
Policy Terms
Eligible for Refund
The policy term the duplicate coverage began and subsequent renewed policy
terms but no more than 5 years prior to the date of the cancellation request.
Type of Refund
If a duplicate policy with same effective date or later effective date is
canceled, then a full premium refund including surcharges and fees applies to
the policy term canceled and any subsequent renewed terms.
• If an exception to allow cancellation of the earlier policy applies, then a
pro-rata premium refund excluding the Federal Policy Fee and Probation
Surcharge is applied to the policy term canceled. For any subsequent
renewed terms eligible for refund, full premium refunds including
5. 44 CFR Part 61, Appendix A(1)-(3), VIII.D.3; 44 CFR § 62.5(e)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 6 • 6
6. How To Cancel
Reason Code 04 Duplicate NFIP policies
5
Type of Refund
continued
surcharges and fees apply. When the policy with the earlier effective date
expired more than 30 days before the cancellation request:
– If the earlier policy was a Dwelling Form policy with only building
coverage on a condominium unit canceled due to a duplicate RCBAP
issued at the maximum limit for building coverage, then the refund
provisions of Reason Code 10 apply.
– If the earlier policy is canceled to establish a common expiration date
with other insurance coverage for the same building, then the refund
provisions of Reason Code 03 apply.
– No refund of premium, surcharges, or fees applies to a canceled GFIP.
Required
Documentation
Copies of the duplicate policies’ declarations pages.
Reason Code 10 Condominium unit or association policy converting to RCBAP
6
Conditions
An insurer may cancel a Dwelling Form policy for a residential condominium
unit (whether the unit owner is a policyholder or the condominium
association) if:
• The Dwelling Form policy has only building coverage and is replaced by
an RCBAP; and
• The combined limits of the Dwelling Form policy and the RCBAP
exceed either:
– The maximum amount of building coverage available for the individual
unit; or
– The building replacement cost value of the unit.
Cancellation
Effective Date
The cancellation effective date is the effective date of the RCBAP.
Policy Terms
Eligible for Refund
The term the RCBAP coverage became effective in and subsequent
renewed policy terms but no more than 5 years prior to the date of the
cancellation request.
Type of Refund
A pro-rata premium refund excluding the Federal Policy Fee and Probation
Surcharge is applied to the policy term canceled. For any subsequent
renewed terms eligible for refund, full premium refunds including surcharges
and fees apply.
Required
Documentation
• A copy of the RCBAP declarations page; and
• Documentation showing the replacement cost value of the unit, if
applicable.
6. 44 CFR Part 61, Appendix A(1)-(3), VIII.C & VIII.D.3; 44 CFR § 62.5(e)(2)(v)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 6 • 7
6. How To Cancel
Reason Code 26 Duplicate policy from source other than NFIP
7
Conditions
An NFIP insurer may cancel a policy if:
• The policy was replaced by a non-NFIP flood insurance policy; and
• The policyholder did not intend to purchase or renew the NFIP policy
because they purchased a duplicate non-NFIP flood insurance policy; and
• The request was submitted within 60 days of the NFIP policy
becoming effective.
The NFIP will presume that a policyholder did not intend to renew their policy
if they purchased a duplicate non-NFIP policy on or before the NFIP policy’s
purchase or renewal date.
If the policyholder requested to cancel or not renew the NFIP policy before
the NFIP policy effective date, see Reason Code 13 “Nullification prior to the
effective date.”
Note: FEMA must review and approve all other requests under this reason
code that do not meet the above conditions. These requests with supporting
documentation can be emailed to NFIPUnderwritingmailbox@fema.dhs.gov
with an explanation of the circumstances.
Cancellation
Effective Date
The effective date of the NFIP policy (nullified).
Policy Terms
Eligible for Refund
Current policy term.
Type of Refund Full premium refund, including fees and surcharges.
Required
Documentation
Evidence of a valid duplicate non-NFIP flood insurance policy, such as a
declarations page or copy of the Application Form and paid receipt
D. Not Eligible for Coverage
Reason Code 06 Property not eligible for coverage
8
Conditions
An insurer issues a policy for an ineligible property. See the Standard Flood
Insurance Policy (SFIP) and Eligibility for NFIP Coverage heading in Section 2:
Before You Start for guidance on properties not eligible for coverage.
Examples of a property not eligible at the time of application include:
• Structures that do not meet the definition of a building.
• Contents not located in an eligible building.
• Policies issued under an incorrect community number for buildings not
located in an NFIP participating community.
• Buildings located in a Coastal Barrier Resources System (CBRS).
• Buildings declared in violation of local floodplain management
requirements pursuant to section 1316 of the NFIA before purchase of the
flood insurance policy.
Cancellation
Effective Date
The insurer must nullify (void) the policy from its initial effective date.
7. 44 CFR Part 61, Appendix A(1)-(3), VIII.C
8. 44 CFR Part 61, Appendix A(1)-(3), VIII.B.1&2; 44 CFR § 62.5(a)(1)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 6 • 8
6. How To Cancel
Reason Code 06 Property not eligible for coverage
8
Policy Terms
Eligible for Refund
All policy terms since the date of commencement of the policy, but no more
than 5 years prior to the date of receipt of verifiable evidence that the
property was ineligible for coverage at the time of the initial application.
Type of Refund
A full premium refund including fees and surcharges, less the amount of any
claims paid during the nullified policy terms.
If the policy has any paid claims and the policyholder does not return the
claim payment(s), the insurer must verify the loss history of the property with
FEMA (NFIPUnderwritingMailbox@fema.dhs.gov) before issuing refunds for
more than two policy terms:
• If the premium refund is greater than the amount of any paid claims, the
net refund paid to the policyholder is the difference between the premium
refund and the amount of the paid claims.
• If the premium refund is less than the amount of any paid claims, the
insurer must reimburse FEMA for the difference between the premium
refund amount and the paid claims.
Required
Documentation
A cancellation request that identifies the basis for ineligibility and the date the
property became ineligible, with supporting documentation.
Examples of supporting documentation that may demonstrate ineligibility include:
• Property tax records
• A Section 1316 declaration (floodplain management violation)
• Coastal Barrier Resources Act (CBRA) determination
• Photographs
Reason Code 27 Property becomes ineligible for coverage during policy term
9
Conditions
A property eligible for coverage at time of application becomes ineligible
during the policy term. See the Standard Flood Insurance Policy (SFIP)
and Eligibility for NFIP Coverage heading in Section 2: Before You Start for
guidance on properties not eligible for coverage.
Examples of a property eligible at the time of application but later
ineligible include:
• Buildings declared in violation of local floodplain management
requirements pursuant to section 1316 of the NFIA prior to renewal of the
flood insurance policy.
• Buildings located in an NFIP participating community suspended after the
issuance of the flood policy.
• Annexation of the property to a non-participating community after issuance
of the flood policy.
Note: This reason code does not cover a building physically altered such that
it is no longer eligible for NFIP coverage. See Reason Code 29.
Cancellation
Effective Date
The insurer may not renew the policy. If the policy has renewed, the insurer
must nullify (void) the policy from the first renewal date after the property
became ineligible.
9. 44 CFR § 62.5(a)(2)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 6 • 9
6. How To Cancel
Reason Code 27 Property becomes ineligible for coverage during policy term
9
Policy Terms
Eligible for Refund
All policy terms since the first renewal date after the property became
ineligible, but no more than 5 years before the date of receipt of verifiable
evidence that the property was eligible for coverage at the time of the initial
application, but later became ineligible for coverage.
Type of Refund
A full premium refund including fees and surcharges, less the amount of any
claims paid during the nullified policy terms.
If the policy has any paid claims and the policyholder does not return the
claim payment(s), the insurer must verify the loss history of the property with
FEMA (NFIPUnderwritingMailbox@fema.dhs.gov) before issuing refunds for
more than two policy terms:
• If the premium refund is greater than the amount of any paid claims, the
net refund paid to the policyholder is the difference between the premium
refund and the amount of the paid claims.
• If the premium refund is less than the amount of any paid claims, the
insurer must reimburse FEMA for the difference between the premium
refund amount and the paid claims.
Required
Documentation
Identification of the basis for ineligibility and the date the property became
ineligible, with supporting documentation.
Examples of supporting documentation that may demonstrate ineligibility include:
• Property tax records
• A Section 1316 declaration (floodplain management violation)
• Coastal Barrier Resources Act (CBRA) determination
• Photographs
Reason Code 29 Building physically altered and no longer eligible for NFIP coverage
10
Conditions
A policy insuring a building or its contents, or both, where the building has
been physically altered in such a manner that the building and its contents
are no longer eligible for flood insurance coverage. (For example, the
policyholder removes a mobile home from a permanent foundation and places
it on wheels.)
Cancellation
Effective Date
The date the building became ineligible for coverage.
Policy Terms
Eligible for Refund
Current policy term.
Type of Refund
A pro-rata premium refund excluding the HFIAA Surcharge, Federal Policy Fee
and Probation Surcharge.
Required
Documentation
Documentation verifying the building’s ineligibility for NFIP coverage, such
as photographs.
10. 44 CFR Part 61, Appendix A(1)-(3), VIII.D.4; 44 CFR § 62.5(f)(3)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 6 • 10
6. How To Cancel
E. Lender No Longer Requires Insurance
Reason Code 28 Insurance no longer required by lender
11
Conditions
The policyholder was subject to a requirement by a lender, loss payee, or other
federal agency to obtain and maintain flood insurance pursuant to statute,
regulation, or contract, but there is no longer such a requirement.
Examples of such situations include but are not limited to:
• Required for a loan closing, but it was later discovered that the building
was not located in an SFHA at the time of closing.
• Required because a building was located in an SFHA but FEMA issued
a map revision, Letter of Determination Review (LODR), Letter of Map
Revision (LOMR), or Letter of Map Amendment (LOMA) that removed the
building from the SFHA.
• Required because a building was located in an SFHA but FEMA issued a
LODR indicating the building is not located in an SFHA.
• Determined that flood insurance is no longer required for a structure on a
residential property that is detached from the primary residential structure
and not itself a residence.
• Required as part of a loan closing and the borrower has paid off the
mortgage loan.
Note: Lenders have discretion to impose flood insurance requirements beyond
the mandatory purchase requirement. For example, they may require flood
insurance outside of SFHAs. Therefore, insurers may use this cancellation
reason even for properties not located in SFHAs, if the lender no longer
requires the policy.
Cancellation
Effective Date
The date the insurer receives the request.
Policy Terms
Eligible for Refund
Current policy term.
Type of Refund
A pro-rata premium refund excluding the HFIAA Surcharge, Federal Policy
Fee and Probation Surcharge applies to the policy term canceled. For any
subsequent renewed terms eligible for refund, full premium refunds including
surcharges and fees apply.
Required
Documentation
In lieu of a signed cancellation request, a signed statement from the
policyholder that the lender no longer requires a flood policy. See the sample
verification letter regarding the requirement to maintain flood insurance
coverage in Appendix I: Policyholder Communications.
F. Invalid Payment or Fraud
Reason Code 05 Invalid payment
12
Conditions
Valid reasons to nullify (void) the policy for an invalid payment include:
• A policyholder’s check payment to the agent or insurer is returned for
non-sufficient funds or rejected.
• A policyholder’s electronic payment to the agent or insurer is rejected
or disputed.
Note: Reason Code 05 is not valid if an agent advances insurance agency
funds without first receiving payment from the policyholder.
11. 44 CFR Part 61, Appendix A(1)-(3), VIII.C; 44 CFR § 62.5(c)
12. 44 CFR Part 61, Appendix A(1)-(3), VIII.B.1.d
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 6 • 11
6. How To Cancel
Reason Code 05 Invalid payment
12
Cancellation
Effective Date
The policy is nullified as of the effective date of the policy.
Policy Terms
Eligible for Refund
Current policy term. However, if a claim was paid for a policy that is void, the
policyholder must return the claim payment to FEMA, or the insurer must
offset the amount of the claim payment from the premiums to be refunded,
before the insurer will process the refund.
Type of Refund
When invalid payment is presented to the agent:
• The insurer must provide a full refund to the agent, including all fees and
surcharges, for returned or rejected policyholder payments to the agent.
When invalid payment is presented to the insurer:
• There is no refund for returned or rejected payments paid by the
policyholder directly to the insurer.
Required
Documentation
The notice of returned or rejected payment.
Reason Code 23 Fraud or Misrepresentation
13
Conditions
• NFIP insurers must cancel a policy for fraud committed by the policyholder
or the agent.
• NFIP insurers may cancel a policy for misrepresentation of a material fact
by the policyholder or agent.
Cancellation
Effective Date
The date of the fraudulent act or material misrepresentation of fact.
Policy Terms
Eligible for Refund
N/A
Type of Refund
• The policyholder is not eligible for a refund of any premiums, fees, or
surcharges.
• If the agent did not commit or participate in the fraud or
misrepresentation, there is no reduction to the insurer’s expense
allowance.
Required
Documentation
Notification from FEMA that the situation qualifies for cancellation under this
reason code.
Reason Code 30 Insufficient premium to retain coverage
14
Conditions
Consistent with the reformation procedures described under the Reformation
Due to Insufficient Premium or Rating Information heading in Section 2:
Before You Start, an insurer may cancel a policy if:
• The premium the insurer received for the policy, after deducting the costs
of all applicable fees and surcharges, is insufficient to buy any amount of
coverage; and
13. 44 CFR Part 61, Appendix A(1)-(3), VIII.A; 44 CFR § 62.5(f)(1)
14. 44 CFR Part 61, Appendix A(1)-(3), VIII.D.1
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 6 • 12
6. How To Cancel
Reason Code 30 Insufficient premium to retain coverage
14
Conditions
continued
• The policyholder does not pay the additional amount of premium owed to
increase coverage to the originally requested amount or to a lesser amount
within 30 days of the underpayment notice.
Note: This cancellation code does not apply in the case of an incorrect
geolocation or flood zone, due to the exception to general reformation
rules described in Section 2: Before You Start. For the portion of the policy
term before the date the insurer discovered the incorrect geolocation or
flood zone (the “date of discovery”), the policyholder receives the originally
requested coverage amount without paying additional premium (or providing
additional rating information, if insufficient). Therefore, the insurer cannot
cancel the policy.
Cancellation
Effective Date
The policy effective date.
Policy Terms
Eligible for Refund
The term when the insurer discovered the premium was insufficient and, if the
policy renewed before reformation occurred, the subsequent renewal term.
Type of Refund
A full premium refund, including fees and surcharges, will apply to the current
policy term and subsequent renewal terms if the policy renewed. However, if a
claim was paid before discovery of the insufficient premium, the insurer must
contact FEMA for additional underwriting and claims guidance.
Required
Documentation
A copy of the underpayment letter sent due to reformation of the policy, along
with documentation showing the original amount of coverage and premium paid.
G. Other Reason Codes
Reason Code 13 Nullification prior to policy effective date
15
Conditions
• The policyholder paid the premium for a policy renewal or a new policy; and
• Before the effective date of the new or renewal policy, the policyholder
decided they do not want the policy to go into effect; and
• The property is not subject to a requirement to obtain and maintain flood
insurance pursuant to any statute, regulation, or contract.
Cancellation
Effective Date
The policy is nullified from the effective date of the policy term.
Policy Terms
Eligible for Refund
Nullified policy term.
Type of Refund
Full premium refund, including fees and surcharges. However, if a claim was
paid for the policy, the policyholder must return the claim payment to FEMA, or
the insurer must offset the amount of the claim payment from the premiums
to be refunded, before the insurer will process the refund.
Required
Documentation
A signed statement from the policyholder to nullify the new or renewal
policy and that the lender no longer requires flood insurance. See sample
verification letter regarding the requirement to maintain flood insurance
coverage in Appendix I: Policyholder Communications.
15. 44 CFR Part 61, Appendix A(1)-(3), VIII.B.1.e; 44 CFR § 62.5(a)(3)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 6 • 13
6. How To Cancel
Reason Code 20 SRL written with incorrect insurer
16
Conditions
A WYO company issues or renews a policy that FEMA requires to be serviced
by the NFIP Direct’s Special Direct Facility (SDF) because the policy covers a
Severe Repetitive Loss (SRL) property.
Cancellation
Effective Date
The cancellation effective date will be the effective date of the policy term
when the property was designated as SRL.
Policy Terms
Eligible for Refund
Current policy term.
Type of Refund Full premium refund including fees and surcharges is sent to the SDF.
Required
Documentation
Property address is identified as an SRL property on the FEMA Repetitive
Loss list.
Reason Code 21 Continuous lake flooding or closed basin lakes
Conditions
• FEMA notification of a continuous lake flooding or closed basin
lakes property.
• The cancellation can be for only one term of a policy.
Cancellation
Effective Date
Must be day after the date of loss.
Policy Terms
Eligible for Refund
N/A
Type of Refund No premium refund allowed.
Required
Documentation
FEMA notification of a continuous lake flooding or closed basin lakes property.
Reason Code 22 Cancel and rewrite due to administrative error
17
Conditions
Provided there are no paid or pending claims for the applicable policy term(s),
the insurer may cancel and rewrite a policy to correct an administrative error,
including but not limited to:
• An incorrect policy effective date;
• System constraints that prevent a legitimate correction;
• A rating correction; or
• Incorrect use of the Dwelling Form when the RCBAP Form was appropriate,
or vice versa.
Cancellation
Effective Date
The cancellation date and the rewritten policy’s effective date must be the
effective date of the policy term when the administrative error first occurred.
Policy Terms
Eligible for Refund
In determining the number of policy years for refund eligibility, do not include
terms that expired before a lapse in coverage.
Type of Refund
Full premium refund including fees and surcharges. The insurer will apply the
refund to the newly rewritten policy and refund any excess premium, fees,
surcharges, or assessments paid.
Required
Documentation
Documentation of the administrative error.
16. 44 CFR § 62.5(f)(2)
17. 44 CFR § 62.5(f)(2)
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 6 • 14
6. How To Cancel
III. Processing a Cancellation or Nullification Request
A. Signatures
The insurer may accept electronic submissions if their business process includes
signature authentication and records receipt dates. Please see the Electronic Signatures
heading in Section 2: Before You Start for more information.
1. Policyholder’s Signature
In general, all policyholders must sign and date a cancellation or nullification
request, except:
• All requests using reason codes 5, 6, 21, 22, 23, 27 and 30.
• Requests using reason code 1, if the building was foreclosed on and the lender is
entitled to the refund.
• Requests using reason code 29, if the covered building that was eligible for
coverage became ineligible midterm due to physical alteration of the building.
• Request using reason code 4, where the insurer created a duplicate policy.
2. Agent Signature
Agents must sign and date the cancellation or nullification request for all cancellation
reason codes, except 6, 21, 22, 23, 27 and 30.
B. Premium Refunds
Insurers must process the return premium on policy terms for which they are the insurer
of record.
If the premium refund is for more than two policy terms and the insurer is unable to
process the additional terms within their system, then the insurer may submit the request
and documentation for the additional terms to FEMA for processing. The documentation
must include:
• A policy cancellation request and the premium refund calculation for each policy term.
• The insurer’s statistical records or declarations pages for each policy term and
evidence of premium payments.
• A completed Prior Term Refund (PTR) Worksheet.
Insurers may send requests and documentation to FEMA by email to:
NFIPUnderwritingMailbox@fema.dhs.gov.
FEMA notifies the insurers of the premium refunded and the Expense Allowance due to the
NFIP. The insurers must maintain this documentation as part of their underwriting files.
FEMA will return rejected refund requests.
OCTOBER 2021 RISK RATING 2.0 NFIP FLOOD INSURANCE MANUAL 6 • 15
6. How To Cancel
C. Cancellation Processing Outcomes
Reason
Code
Signature
Required
Premium Refund
(Including ICC
and Reserve Fund
Assessment) HFIAA Surcharge
Probation
Surcharge
Federal
Policy Fee
Producer Commission
(Direct Business Only)
Policyholder
Agent, or
Both
Full
Refund
Pro
Rated
Full
Refund
Pro
Rated
No
Refund
Full
Refund
No
Refund
Full
Refund
No
Refund
Full
Deduction
Pro
Rated Retained
A. No Insurable Interest
1
* × × × × ×
2 Both
× × × × ×
7 Both
× × × × ×
B. Establish Common Expiration Date
3 Both
× × × × ×
C. Duplicate Coverage
4
* ×* ×* ×* ×* ×*
10 Both
× × × × ×
26 Both
× × × × ×
D. Not Eligible for Coverage
6
* × × × × ×
27
* × × × × ×
29
* × × × × ×
E. Lender No Longer Requires Insurance
28 Both
× × × × ×
F. Insufficient Premium or Fraud
5 Agent
× × × × ×
23
*
NO REFUND OF PREMIUM, FEDERAL POLICY FEE, RESERVE FUND
ASSESSMENT, OR HFIAA SURCHARGE ALLOWED
×
30
* × × × × ×
G. Other Reason Codes
13 Both
× × × × ×
20 Both
× × × × ×
21
*
NO REFUND OF PREMIUM, FEDERAL POLICY FEE, RESERVE FUND
ASSESSMENT, OR HFIAA SURCHARGE ALLOWED
×
22
*
×
×
× × ×
* See the Signatures heading above.
×* See Reason Code 04 description for when a full refund may apply.
This page is intentionally left blank.