The Standard Flood Insurance Policy form is shown as the flood insurance program is policy driven, i.e., while it is a government program, its rules and procedures are derived from the flood insurance policy. There are differences between this policy (SFIP) and the other policy forms, but most of the provisions apply to all policies. Differences will be discussed when approached.
The actual policy wording uses the "you," "your," and "we," "our" for ease of understanding to the policyholder. The policy in its entirety is located in EXHIBIT A at the end of this text.
Flood insurance is considered heavily "policy-driven" also because it covers specified risks in specified manners for specified amounts. If a person has automobile insurance and they have a "wreck," they feel that that is the purpose of the policy, and the same goes for most insurance policies sold to the general public. Flood insurance, however, covers risks that cannot easily be categorized easily and there can be multitudes of unanswered questions in respect to the destruction of their property by water. Further, with the advent of the program being sold by professional property and casualty agents, more technical relationships between flood insurance and homeowner's insurance, for example, are unclear. With the various courses in P&C insurance available, there has not been a course on flood insurance, at least in any great detail, even in the CPCU studies.
At this point it would seem that the policy be discussed and explained, based upon the printed policy form and since more Standard Flood Insurance Policies are sold, a look at the policy is in order. Technical details that are only of interest to regulators or serious students (actuaries, for instance) are not discussed in detail, but exclusions and restrictions are—obviously that is what is important to the agent when presenting flood insurance to a client or in assisting him with flood damage claims later.
Incidentally, the items for discussion in this section follow their order in the policies, such as items being in alphabetical order when listed.
After the usual required heading, the flood insurance policy starts with "Claim Guidelines in Case of a Flood." Claims are discussed in sufficient detail in the text so that it would be redundant to review them again. Having claims information available on the front page of a policy is good customer relations as when a claim arises from flooding, the policyholder simply looks at the first page of his policy and knows what to do. There is a lesson here:
F The policy must be kept in a safe place so that it will not be destroyed by flood or other assaults by nature.
Recent (since Dec. 2000) changes in the Flood insurance policy that are considered significant by FEMA are listed. Unless the policyholder has had previous policies, it is easy to read, and probably should be read, but otherwise, it is relatively insignificant. It does indicate that the program has become more liberal over the past few years.
Policy specifies that this form only is for non-condominium family residential buildings or a single-family dwelling unit in a Condominium. Differences in treatment between a single residence and a Condominium are outlined in the policy.
The Agreement section merely informs the policyholder that claims will be paid if the terms of the policy have been met, premiums paid, and accurate information and statements have been made. The company always has the right to take a look at the information submitted to them and revise the policy accordingly.
"Definitions" are always important in discussing with a policyholder or prospective policyholder what things mean. People have a natural distrust of "technical" insurance terms as they have all heard horror stories of people finding themselves without coverage because of some "technical term."
Flood: A flood is a "general and temporary condition of partial or complete inundation of two or more acres of normally dry land area, OR, of two or more properties (one of which belongs to the policyholder), such condition caused by overflow of inland or tidal waters. If tidewater floods the property or if a lake or large pond overflows, then this is a "flood."
Further, if there is a rapid and unusual accumulation or runoff of surface waters from any source—your neighbors duck pond, the gentle flowing stream becomes a huge torrent, etc. Notice the words "rapid" and "unusual"—a build-up of water on the property over several weeks does not qualify, especially if the water has risen so previously.
Mudflow is also covered, and is described as "a river of liquid and flowing mud on the surfaces of normally dry land areas, as when earth is carried by a current of water. Other such movements, such as landslides, slope failure, or a saturated soil mass moving by liquidity down a slope, are NOT mudflows. If the house in at the bottom of a steep gassy slope and a lot of rain causes the dirt to gravitate rapidly to the bottom of the slope—no coverage. If a river overflows and moves loose dirt-now-mud from farmlands between the river and your property and your landscaping is now wet and brown—that is why you bought the policy!
The second definition of flood is defined as the collapse or subsidence (means falling to the bottom, sinking, etc.) of land along the shore or a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood (like in a billabong?).
As with most applications, the correct premium payment must accompany the application. As stated, there are no "binders."
A technical term which means a flood that has a one percent chance of being equaled or exceeded in any year.
Any area of the building, including any sunken room or sunken portion of a room, having its floor below ground level (subgrade) on all sides.
For purposes of this insurance, one must know what a "building is:
a. A structure with two or more outside rigid walls and a fully secured roof that is affixed to a permanent site;
b. A manufactured home (a "manufactured home," also known as a mobile home, is a structure: built on a permanent chassis, transported to its site in one or more sections, and affixed to a permanent foundation), or
c. A travel trailer without wheels built on a chassis and affixed to a permanent foundation, that is regulated under the community's floodplain management and building ordinances or laws.
Building does not mean a gas or liquid storage tank or a recreational vehicle, park trailer, or other similar vehicle, except as described in above.
"Condominium" and "Condominium Association" are defined as: "Condominium:" That form of ownership of real property in which each unit owner has an undivided interest in common elements. "Condominium Association:" The entity made up of the unit owners responsible for the maintenance and operation of
a. Common elements owned in undivided shares by unit owners; and
b. Other real property in which the unit owners have use rights;
where membership in the entity' is a required condition of unit ownership.
"Direct Physical Loss By or From Flood," defined as loss or damage to insured property, directly caused by a flood. There must be evidence of physical changes to the property.
An Elevated Building is a building that has no basement and that has its lowest elevated floor raised above ground level by foundation walls, shear walls, posts, piers, pilings, or columns.
The Emergency Program is mentioned at different times, which is the initial phase of a community's participation in the National Flood Insurance Program. During this phase, only limited amounts of insurance are available under the Act.
There is an "Expense Constant" which is a flat charge that must be paid on each new or renewal policy to defray the expenses of the Federal Government related to flood insurance. Plus, there is also a Federal Policy Fee which is another flat charge that must be paid on each new or renewal policy to defray certain administrative expenses incurred in carrying out the National Flood Insurance Program. This policy fee covers expenses not covered by the expense constant.
Improvements are fixtures, alterations, installations, or additions comprising a part of the insured dwelling or the apartment insured.
This is the typical "Entire Policy" statement which consists only of the policy, application and Declarations page, any endorsements and any renewal certificate. What is interesting is that only one dwelling, specifically described in the policy, may be insured under this policy.
Pollutants are defined as substances that include, but are not limited to, any solid, liquid, gaseous, or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste. "Waste" includes, but is not limited to, materials to be recycled, reconditioned, or reclaimed.
Used over and over in this discussion, a Post-FIRM Building is a building for which construction or substantial improvement occurred after December 31, 1974, or on or after the effective date of an initial Flood Insurance Rate Map (FIRM), whichever is later.
A Probation Premium is a flat charge that must be paid you must pay on each new or renewal policy issued covering property in a community that the NFIP has placed on probation under the provisions of Federal regulations.
This term is often used in Training material, and is defined as the final phase of a community's participation in the National Flood Insurance Program. In this phase, a Flood Insurance Rate Map is in effect and full limits of coverage are available under the Act.
This is used throughout the training material and any flood insurance publications or information. A Special Flood Hazard Area is an area having special flood, or mudflow, and/or flood-related erosion hazards, and shown on a Flood Hazard Boundary Map or Flood Insurance Rate Map as Zone A, AO, Al-A30, AE, A99, AH, AR, AR/A, AR/AE. AR/AH, AR/AO, AR/AI-A30, VI-V30, VE, or V
One should know that a "valued policy" is, and that is a policy in which the insured and the insurer agree on the value if the property insured, that value being payable in the event of a total loss. The Standard Flood Insurance Policy is not a valued policy.
Coverage under the Flood Insurance policy falls into four categories.
This policy insures the dwelling shown on the policy against direct physical loss by or from flood to:
1. The dwelling at the described location or for a period of 45 days at another location if the property has been removed to safety (discussed later).
2. Additions and extensions attached to and in contact with the dwelling by means of a rigid exterior wall, a solid load-bearing interior wall, a stairway, an elevated walkway, or a roof. If the policyholder desired, additions and extensions connected by any of these methods may be separately insured. Additions and extensions attached to and in contact with the building by means of a common interior wall that is not a solid load-bearing wall are always considered part of the dwelling and cannot be separately insured.
3. A detached garage at the described location. Coverage is limited to no more than 10 percent of the limit of liability on the dwelling. Example: Maximum amount of liability $250,000. The detached garage can be insured for up to $25,000. However, that reduces the limit on the residence to $225,000.Use of this insurance is at the option of the policyholder. Note: The policy does not cover any detached garage used or held for use for residential (i.e., dwelling), business, or farming purposes.
F Whenever there is a 10% limit of liability offered in this policy, such is at the option of the policyholder and if used, will reduce the maximum amount of liability
accordingly.
4. Materials and supplies to be used for construction, alteration, or repair of the dwelling or a detached garage while the materials and supplies are stored in a fully enclosed building at the described location or on an adjacent property.
5. A building under construction, alteration, or repair at the described location, however, if the structure is not yet walled or roofed, then coverage applies only while such work is in progress; or if such work is halted, only for a period of up to 90 continuous days thereafter.
However, coverage does not apply until the building is walled and roofed if the lowest floor, including the basement floor, of a non-elevated building or the lowest elevated floor of an elevated building is:
(1) Below the base flood elevation in Zones AH, AE, AI-A30, AR, AR/AE, AR/AH, AR/AI-A30, AR/A, AR/AO; or
(2) Below the base flood elevation adjusted to include the effect of wave action in Zones VE or VI-V30.
The lowest floor levels are based on the bottom of the lowest horizontal structural member of the floor in Zones VE or V I -V30 and the top of the floor in Zones AH, AE, Al-A30, AR, AR/AE, AR/AH, AR/Al-A30, AR/A, AR/AO.
6. A manufactured home or a travel trailer as described in the Definitions section
If the manufactured home or travel trailer is in a special flood hazard area, it must be anchored in the following manner at the time of the loss:
a. By over-the-top or frame ties to ground anchors; or
b. In accordance with the manufacturer's specifications; or
c. In compliance with the community's floodplain management requir ments;
unless it has been continuously insured by the NFIP at the same described location since September 30, 1982.
7. The following items of property which are covered under Coverage A only:
a. Awnings and canopies;
b. Blinds;
c. Built-in dishwashers,
d. Built-in microwave ovens;
e. Carpet permanently installed over unfinished flooring;
f. Central air conditioners,
g. Elevator equipment;
h. Fire sprinkler systems;
i. Walk-in freezers;
j. Furnaces and radiators;
k Garbage disposal units;
1. Hot water heaters, including solar water heaters;
m. Light fixtures.
n. Outdoor antennas and aerials fastened to buildings;
o. Permanently installed cupboards, bookcases, cabinets, paneling, and wallpaper;
p. Plumbing fixtures;
q. Pumps and machinery for operating pumps;
r. Ranges, cooking stoves, and ovens;
s. Refrigerators: and
t. Wall mirrors, permanently mounted.
8. Items of property in a building enclosure below the lowest elevated floor of an elevated post-FIRM building located in Zones A1-A30, AE, AH, AR, AR/A, AR/E, AR/AH. AR/A1-A30, V1-V30, or VE, or in a basement, regardless of the Zone. Coverage is limited to the following:
a. Any of the following items, if installed in their functioning locations and, if nec- essary for operation, connected to a power source:
(1) Central air conditioners;
(2) Cisterns and the water in them;
(3) Drywall for walls and ceilings in a basement and the cost of labor to nail it, unfinished and unfloated and not taped, to the framing;
(4) Electrical junction and circuit breaker boxes;
(5) Electrical outlets and switches;
(6) Elevators, dumbwaiters, and related equipment, except for related equipment installed below the base flood elevation after September 30, 1987;
(7) Fuel tanks and the fuel in them;
(8) Furnaces and hot water heaters;
(9) Heat pumps;
(10) Nonflammable insulation in a basement;
(11) Pumps and tanks used in solar energy systems;
(12) Stairways and staircases attached to the building, not-separated from it by elevated walkways;
(13) Sump pumps;
(14) Water softeners and the chemicals in them, water filters, and faucets installed as an integral part of the plumbing system;
(15) Well water tanks and pumps;
(16) Required utility connections for any item in this list; and
(17) Footings, foundations, posts, pilings, piers, or other foundation walls and anchorage systems required to support a building.
b. Clean-up.
If personal property coverage has been purchased, the insurance policy insures against direct physical loss by or from flood to personal property inside a building at the described location, provided that the property is owned by the policyholder or household family members, and (coverage at the option of the policyholder) the property is owned by guests or servants.
Personal property is also covered for a period of 45 days at another location if it has been removed for safety.
Personal property in a building that is not fully enclosed must be secured to prevent flotation out of the building.
F If the personal property does float out during a flood, it will be conclusively presumed that it was not reasonably secured. In that case there is no coverage for such property.
Personal property that is covered under this policy and which is only covered under this section includes:
a. Air conditioning units, portable or window type;
b. Carpets, not permanently installed, over unfinished flooring
c. Carpets over finished flooring;
d. Clothes washers and dryers,
e. "Cook-out" grills;
f. Food freezers, other than walk-in, and food in any freezer; and
g. Portable microwave ovens and portable dishwashers.
Coverage for property located are in a building enclosure below the lowest elevated floor of an elevated post-FIRM building located in Zones AIA30, AE, AH, AR, AR/A, AR/AE, AR/AH, AR/Al-A30, V1-V30, or VE, or in a basement, regardless of the Zone, is limited to the following items, if installed in their functioning locations and, if necessary for operation, connected to a power source:
a. Air conditioning units, portable or window type;
b. Clothes washers and dryers; and
c. Food freezers, other than walk-in, and food in any freezer.
This allows the policy to cover personal property of a tenant under Coverage B. The policy will then cover such personal property, including a cooking stove or range and refrigerator. The policy will also cover improvements made or acquired solely at the expense of the policyholder in the dwelling or apartment in which he resides, but for not more than 10 percent of the limit of liability shown for personal property on the Declarations Page.
For a condominium unit owner that has insured personal property under this coverage, the policy will also cover interior walls, floor, and ceiling (not otherwise covered under a flood insurance policy purchased by the condominium association) for not more than 10 percent of the limit of liability shown for personal property on the Declarations Page
This policy will pay no more than $2,500 for any one loss to one or more of the following kinds of personal property:
a. Artwork, photographs, collectibles, or memorabilia, including but not limited to, porcelain or other figures, and sports cards;
b. Rare books or autographed items;
c. Jewelry, watches, precious and semiprecious stones, or articles of gold, silver, or platinum;
d. Furs or any article containing fur which represents its principal value, or
e Personal property used in any business.
7. The policy will pay only for the functional value of antiques.
This policy allows for payment for the expense to remove non-owned debris on or in insured property and owned debris anywhere and if the policyholder or a member of his household performs the removal work, the value of the work will be based on the Federal minimum wage. This coverage does not increase the Coverage A or Coverage B limit of liability.
If it is necessary to purchase sandbags or other supplies to help avoid further loss, the policy will pay up to $1,000 for costs incurred to protect the insured building from a flood or imminent danger of flood, such amount to be used for reasonable expenses to buy Sandbags, including sand to fill them; Fill for temporary levees; pumps; and plastic sheeting and lumber used in connection with these items, plus the value of the work performed by the policyholder or family member (labor cost determined by the Federal minimum wage).
This coverage for Sandbags, Supplies, and Labor applies only if damage to insured property by or from flood is imminent, and the threat of flood damage is apparent enough to lead a person of common prudence to anticipate flood damage. One of the following must also occur:
(a) A general and temporary condition of flooding in the area near the described location must occur, even if the flood does not reach the insured building; or
(b) A legally authorized official must issue an evacuation order or other civil order for the community in which the insured building is located calling for measures to preserve life and property from the peril of flood.
This coverage does not increase the Coverage A or Coverage B limit of liability.
The policy will pay up to $1,000 for the reasonable expenses the policyholder incurs to move insured property to a place other than the described location that contains the property in order to protect it from flood or the imminent danger of flood. The value of work will be determined by the Federal minimum wage.
If the insured property is moved to a location other than the described location that contains the property, in order to protect it from flood or the imminent danger of flood, such property will be covered by the policy while such property is at that location for a period of 45 consecutive days from the date the movement of property commenced. The personal property that is moved must be placed in a fully enclosed building or otherwise reasonably protected from the elements.
Any property removed, including a moveable home (described in the policy, i.e., a mobile home) must be placed above ground level or outside of the special flood hazard area.
This coverage does not increase the Coverage A or Coverage B limit of liability.
If this policy insures a condominium unit, it will pay, up to the Coverage A limit of liability, the policyholder's share of loss assessments charged against him by the condominium association in accordance with the condominium association's articles of association, declarations and the policyholder's deed.
The assessment must be made as a result of direct physical loss by or from flood during the policy term, to the building's common elements.
The policy will not pay for any loss assessment charged against the policyholder and the condominium association by any governmental body that results from a deductible under the insurance purchased by the condominium association insuring common elements or from a loss to personal property, including contents of a condominium building.
There is a coinsurance penalty in this provision as the policy will not pay for a loss that results from a loss sustained by the condominium association that was not reimbursed under a flood insurance policy written in the name of the association under the Act because the building was not, at the time of loss, insured for an amount equal to the lesser of (a) 80 percent or more of its full replacement cost; or (b) the maximum amount of insurance permitted under the Act; to the extent that; payment under this policy for a condominium building loss, in combination with payments under any other NFIP policies for the same building loss exceeds the maximum amount of insurance permitted- under the Act for that kind of building or (duplication of coverage) to the extent that payment under this policy for a condominium building loss, in combination with any recovery available to the tenant in common under any NFIP condominium association policies for the same building loss, exceeds the amount of insurance permitted under the Act for a single-family dwelling.
Loss assessment coverage does not increase the Coverage A limit of liability.
There are certain State or local floodplain management law or ordinance affecting repair or reconstruction of a structure suffering flood damage and the policy will pay for such compliance when eligible for payment and which are elevation, floodproofing, relocation, or demolition (or any combination of these activities) of the insured structure. Eligible floodproofing activities are limited to nonresidential structures and residential structures with basements that satisfy the Federal Code. This has been covered extensively in the previous discussion of Increased Cost of Compliance (ICC) and does not bear repeating.
This is quite important as the policy does not cover certain property:
1. Personal property not inside the fully enclosed building;
2. A building, and personal property in it, located entirely in, on, or over water or seaward of mean high tide if it was constructed or substantially improved after September 30, 1982;
3. Open structures, including a building used as a boathouse or any structure or building into which boats are floated, and personal property located in, on, or over water;
4. Recreational vehicles other than travel trailers described in the policy, whether affixed to a permanent foundation or on wheels;
5. Self-propelled vehicles or machines, including their parts and equipment. However, the policy will cover self-propelled vehicles or machines not licensed for use on public roads that are 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;
6. Land; land values, lawns, trees, shrubs, plants, growing crops, or animals;
7. Accounts, bills, coins, currency, deeds, evidences of debt, medals, money, scrip, stored value, cards, postage stamps, securities, bullion, manuscripts, or other valuable papers;
8. Underground structures and equipment, including wells, septic tanks, and septic systems;
9. Those portions of walks, walkways, decks, driveways, patios, and other surfaces, all whether protected by a roof or not, located outside the perimeter, exterior walls of the insured building or the building in which the insured unit is located;
10. Containers, including related equipment, such as, but not limited to, tanks containing gases or liquids;
11. Buildings or units and all their contents if more than 49 percent of the actual cash value of the building or unit is below ground, unless the lowest level is at or above the base flood elevation and is below ground by reason of earth having been used as insulation material in conjunction with energy efficient building techniques;
12. Fences, retaining walls, seawalls, bulkheads, wharves, piers, bridges, and docks;
13. Aircraft or watercraft, or their furnishings and equipment;
14. Hot tubs and spas that are not bathroom fixtures, and swimming pools, and their equipment such as, but not limited to, heaters, filters, pumps, and pipes, wherever located;
15. Property not eligible for flood insurance pursuant to the provisions of the Coastal Barrier Resources Act and the Coastal Barrier Improvement Act and amendments to these acts;
16. Personal property owned in common with other unit owners comprising the membership of a condominium association.
Exclusions are always important in understanding an insurance policy, and Flood Insurance is no exception.
F The policy only provides coverages for direct physical loss by or from flood.
This means, in case there was any question of what exclusions are, the policy does not pay for :
1. Loss of revenue or profits.
2. Loss of access to the insured property or described locations.
3. Loss of use of the insured property or described locations.
4. Loss from interruption of business or production.
5. Any additional living expenses incurred while the insured building is being repaired or in unable to be occupied for any reason.
6. The cost of complying with any ordinance or law requiring of regulating the construction, demolition, remodeling, renovation, or repair of property, including removal of any resulting debris. This exclusion does not apply to any eligible activities that we describe in Coverage D - increased Cost of Compliance, or
7. Any other economic loss.
This policy does not cover loss to property caused directly by earth movement even if the earth movement is caused by flood. Some examples of earth movement that we do not cover are
1. Earthquake.
2. Landslide.
3. Land subsidence.
4. Sinkholes.
5. Destabilization or movement of land that results from accumulation of water in subsurface land areas.
We do, however, pay for losses from mudflow and land subsidence as a result of erosion that are specifically covered under the definition of flood
Further, the policy does not cover direct physical loss caused directly or indirectly by any of the following:
1. The pressure or weight of ice.
2. Freezing or thawing;
3. Rain, snow, sleet, hail, or water spray;
4. Water, moisture, mildew, or mold damage that results primarily from any condition that is substantially confined to the dwelling or within the control of the policyholder, including (but not limited to
(1) Design, structural, or mechanical defects;
(2) Failure, stoppage, or breakage of water or sewer lines, drains, pumps, fixtures, or equipment; or
(3) Failure to inspect and maintain the property after a flood recedes.
Also excluded is water or waterborne material that backs up through sewers or drains, discharges or overflows from a sump, sump pump, or related equipment; or seeps or leaks on or through the covered property—unless there is a flood 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.
Other exclusions include:
(Check the policy wording for any exclusion in regards to property owned or leased by the Federal Government, or for testing/monitoring of pollutants.)
There is a deductible, which is shown on the Declarations Page. However, when 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, the deductible amount will be two times the deductible that would otherwise apply to a completed building.
In each loss from flood, separate deductibles apply to the building and personal property insured by this policy. The deductible does not apply to Loss Avoidance Measures; Condominium Loss Assessments; or Increased Cost of Compliance.
Not so stated in the policy, but for general rating information,
F the NFIP standard deductible is either $500 or $1,000.
However, the insured may choose a deductible amount different from the standard $500 for Post-FIRM or the $1,000 for structures in the Emergency Program and those rated using Pre-FIRM rates in certain Zones ("A" and "V" Zones). The optional deductible amount may be applied to policies insuring properties in either the Emergency Program or Regular Program communities.
Policyholders who want to reduce deductibles from the standard of $1,000 for Pre-FIRM SFHA risks may opt to purchase separate $500 deductibles for building and contents coverages, for an additional premium.
Deductibles can be increased during the policy period by submitting a General Change Endorsement Form. The deductible can be reduced through the submission of a new application at the time of renewal (Note: it is not necessary to complete the entire application). Deductibles cannot be reduced midterm unless required by the mortgagee and written authorization is provided by the mortgagee. There will be a 30-day waiting period after submission to reduce the deductible.
1. Flood insurance is considered heavily "policy-driven"
A. because the government pays for all losses.
B. because it covers specified risks in specified manners for specified amounts.
C. as opposed to Homeowner's insurance which is loss-driven.
D. and is also considered as an umbrella policy.
2. In additional to flooding damage, the Standard Fire Insurance Policy (SFIP) covers
A. losses due to wind when combined with water damage.
B. mudflow.
C. policyholder liability when removing or destroying damaged property after an approved flood loss.
D. losses due to theft after flood damages renders the residence unlivable.
3. A technical term which means a flood that has a one percent chance of being equaled or exceeded in any year is
A. Maximum Flow Exposure (MFE).
B. Base Flood Elevation (BFE)
C. Wave Height Adjustment.
D. Exposure Constant.
4. "Direct Physical Loss By or From Flood," is defined as loss or damage to insured property, directly caused by a flood but there must be
A. a loss of at least 20% of the total property value
B. an equal amount of damage to contents.
C. evidence of physical changes to the property
D. complete and total devastation of the insured building.
5. The SFIP affords coverage to a building under construction, alteration, or repair at the described location, however, if the structure is not yet walled or roofed, then coverage applies only while such work is in progress; or if such work is halted,
A. only for a period of up to 90 continuous days thereafter.
B. then the policy is considered to be held in abeyance and any loss payments will not be paid as long as the delay does not exceed 2 years.
C. the policy is terminated but can be resumed when work starts again, at any time.
D. the policy is nullified ab initio (from inception)
6. If personal property does float out during a flood,
A. the estimated value of the property will be covered.
B. the provable value of the property that floated out will be covered.
C. then the entire SFIP will become nullified.
D. it will be conclusively presumed that it was not reasonably secured, in which case there is no coverage for such property
7. Jacob had two paintings that had been in his family for years and were valued at more than $1 million each. During a flood to Jacob's insured residence, the paintings were totally destroyed.
A. There is absolutely no coverage for artwork of any kind.
B. The total amount of the appraised value of the artwork will be paid.
C. The maximum loss for any artwork and other such articles, would be $2,500.
D. The maximum insured amount for his residence would be applied in determining how much the insurer will pay, i.e, if the house is insured for $250,000, then he could receive $250,000 total for the two paintings and other such contents.
8. The policy will pay for the reasonable expenses the policyholder incurs to move insured property to a place other than the described location that contains the property in order to protect it from flood or the imminent danger of flood, in an amount
A. up to the maximum amount of the total insurance on the building.
B. up to $1,000
C. up to the maximum amount of the total insurance on the contents.
D. felt appropriate by the appraiser, up to $10,000.
9. The SFIP will pay for
A. Loss of revenue or profits.
B. Loss of access to the insured property or described locations.
C. Loss of use of the insured property or described locations.
D. Staircases and walkways that are attached to the building.
10. The NFIP standard deductible is
A. either $500 or $1,000.
B. $30,000.
C. $2,500.
D. always $1,000.