The answers to coverage questions are primarily based on ISO forms generally used in Florida by most companies. However, we must keep in mind that all companies’ forms are NOT necessarily the same. Some companies may provide broader coverage and some may be more restrictive. IN ALL CASES, THE CONSUMER MUST REFER TO HIS OR HER OWN POLICY FOR SPECIFIC COVERAGE INFORMATION.
In catastrophic situations, some companies may be more lenient in their handling of claims and may make concessions, such as advancing additional living expense (i.e. ALE) payments, to expedite the claim process. Other companies may handle such claims in accordance with their normal procedures.
If you have additional questions that need to be added to this list or if you find any errors, please send them to the Division of Insurance Consumer Services, Bureau of Education, Advocacy and Research.
There is normally a 30-day waiting period before flood insurance goes into effect. There are two basic exceptions:
If the initial purchase of flood insurance is in connection with the making, increasing, extending, or renewing of a loan, there is no waiting period. The coverage becomes effective at the time of the loan, provided the application and presentment of premium are made at or prior to loan closing.
If the initial purchase of flood insurance is made during the 13-month period following the revision or update of a Flood Insurance Rate Map for the community, there is a 1-day waiting period.
In addition to the two basic exceptions, FEMA has issued a policy decision specifying the following four exceptions:
The 30-day waiting period will not apply when there is an existing insurance policy and an additional amount of flood insurance is required in connection with the making, increasing, extending, or renewing of a loan, such as a second mortgage, home equity loan, or refinancing. The increased amount of flood coverage will be effective as of the time of the loan closing, provided the increased amount of coverage is applied for and the presentment of additional premium is made at or prior to the loan closing.
The 30-day waiting period will not apply when an additional amount of insurance is required as a result of a map revision. The increased amount of coverage will be effective at 12:01 a.m. on the first calendar day after the date the increased amount of coverage is applied for and the presentment of additional premium is made.
The 30-day waiting period will not apply when flood insurance is required as a result of a lender’s determining a loan that does not have flood insurance coverage should be protected by flood insurance. The coverage will be effective upon the completion of an application and the presentment of payment of premium.
The 30-day waiting period will not apply when an additional amount of insurance offered in the renewal bill is being obtained in connection with the renewal of a policy.
The Standard Flood Insurance Policy (SFIP) Forms contain complete definitions of the coverages they provide. Direct physical losses by “flood” are covered. Also covered are losses resulting from flood-related erosion caused by waves or currents of water activity exceeding anticipated cyclical levels, or caused by a severe storm, flash flood, abnormal tidal surge, or the like, which result in flooding, as defined. Damage caused by mudflows, as specifically defined in the policy forms, is covered.
Walks, driveways, and paved surfaces outside building foundation walls.
Motor vehicles (with exceptions), aircraft, watercraft.
In addition, there are very important exclusions regarding contents and machinery, equipment, fixtures, etc. located at an elevation lower than the lowest elevated floor of a building. The best thing to do regarding coverage questions of this type is to refer the consumer to the terms and conditions of his or her policy.
Coverage is provided for foundation elements, including posts, pilings, piers, or other support systems for elevated buildings. Coverage also is available for basement and enclosure utility connections, certain mechanical equipment necessary for the habitability of the building, such as furnaces, hot water heaters, clothes washers and dryers, food freezers and the food in them, air conditioners, heat pumps, electrical junctions, and circuit breaker boxes. Finished structural elements such as paneling and linoleum, and contents items such as rugs and furniture are not covered. The SFIP has a complete list of covered elements and equipment.
We will pay for losses from land subsidence under certain circumstances. Subsidence of land along a lake shore or similar body of water which results from the erosion or undermining of the shoreline caused by waves or currents of water exceeding cyclical levels that result in a flood is covered. All other land subsidence is excluded. We do not insure for direct physical loss caused directly or indirectly by any of the following:
Backups through sewers or drains;
Discharges or overflows from a sump, sump pump, or related equipment;
Seepage or leaks on or through the covered property; unless there is a general condition of flooding in the area and the flood is the proximate cause of the sewer or drain backup, sump pump discharge or overflow, or seepage of water.
Only for single-family dwellings and residential condominium buildings, if several criteria are met. Replacement cost coverage is available for a single-family dwelling, including a residential condominium unit that is the policyholder’s principal residence and is insured for at least 80 percent of the unit’s replacement cost at the time of the loss, up to the maximum amount of insurance available at the inception of the policy term. Replacement cost coverage does not apply to manufactured (i.e., mobile) homes smaller than certain dimensions specified in the policy. Losses are adjusted on a replacement cost basis for residential condominium buildings insured under the Residential Condominium Building Association Policy (RCBAP). The principal residence and the 80 percent insurance to value requirements for single-family dwellings do not apply to the RCBAP. However, coverage amounts less than 80 percent of the building’s full replacement cost value at the time of loss will be subject to a co-insurance penalty.
Contents losses are always adjusted on an actual cash value basis. If the replacement cost conditions are not met, the building loss is also adjusted on an actual cash value basis. Actual cash value means the replacement cost of an insured item of property at the time of loss, less the value of physical depreciation as to the item damaged.
Increased Cost of Compliance (ICC) coverage under the Standard Flood Insurance Policy (SFIP) provides for the payment of a claim to help pay for the cost to comply with State or community floodplain management laws or ordinances from a flood event in which a building has been declared substantially damaged or repetitively damaged. When an insured building is damaged by a flood and the State or community declares the building to be substantially damaged or repetitively damaged, ICC coverage will help pay for the cost to elevate, floodproof, demolish, or relocate the building up to a maximum benefit of $30,000. This coverage is in addition to the building coverage for the repair of actual physical damages from flood under the SFIP.
Yes. The maximum amount a policyholder may collect under ICC is $30,000. This amount is in addition to the amount the policyholder receives for physical damages by flood. The total amount the policyholder receives for combined physical structural damage from flood and ICC is always capped by the maximum limit of coverage established by Congress. The maximum amount collectible for both ICC and physical damage from flood for a single-family dwelling is $250,000.
A flood insurance policyholder should immediately report any flood loss to the insurance company or agent who wrote the policy. A claims adjuster will be assigned the loss, and the policyholder must file a “proof of loss” within 60 days of the date of loss. A policyholder whose policy is with a WYO company must follow the company’s claim procedures. The 60-day time limit for filling a proof of loss remains the same.
A proof of loss-the policyholder’s valuation of claimed damages - is a sworn statement made by the policyholder that substantiates the insurance claim and is required to be submitted to the NFIP or WYO company within 60 days of the loss. A printed form usually is available from the adjuster assigned to the claim.