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DHS FEMA NFIP Services - eWaterwark Article
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NFIP Rule Changes
The following changes to the NFIP were implemented effective October 1, 2006. For more details about
these changes, refer to the NFIP's
Flood Insurance Manual accessible online or order a hardcopy subscription for $25
from FEMA's Map Service Center (MSC). To order by phone, call the MSC toll free at 800-358-9616 or fax
your order to the MSC at 800-358-9620.
Severe Repetitive Loss Program
Properties that flood repeatedly cause financial hardship for the owners and have a significant,
adverse financial impact on the NFIP, as well. In 2000, the NFIP established a Special Direct Facility
(SDF) to identify those insured properties most prone to repeated flooding and to enable easier
tracking of mitigation activities that would remove these properties from harm's way.
In response to legislation in the Flood Insurance Reform Act (FIRA) of 2004, the NFIP has now created
a new category of repetitive loss--Severe Repetitive Loss (SRL) properties--for identification and
mitigation. See "
Tracking Severe Repetitive Losses" for a description of this new program and how it
impacts those policies already held in the SDF.
The Flood Insurance Manual contains a new SRL section about Severe Repetitive Loss properties
that provides details about changes in the SDF's policies and procedures. The new definition for
Severe Repetitive Loss properties is on page DEF 8 of the manual.
New Photo Requirements
FEMA is making it easier to correctly rate policies for elevated buildings by requiring that all
Elevation Certificates certified on or after January 1, 2007, or later be accompanied by at least
two recent photographs.
Preferred Risk Policies and Prior Losses
Preferred Risk Policies (PRPs) offer eligible NFIP policyholders financial protection from flooding
at a moderate cost. A building's eligibility for the PRP is based on several requirements, including
its flood loss history. If one of the following conditions exists, regardless of any change(s) in
ownership of the building, then the building is not eligible for the PRP:
- 2 flood insurance claim payments, each more than $1,000; or
- 3 or more flood insurance claim payments, regardless of amount; or
- 2 Federal flood disaster relief payments (including loans and grants), each more than $1,000; or
- 3 Federal flood disaster relief payments (including loans and grants), regardless of amount; or
- 1 flood insurance claim payment and 1 Federal flood disaster relief payment (including loans and
grants), each more than $1,000.
FEMA has clarified the PRP eligibility criteria pertaining to receipt of
Federal flood disaster relief payments. Federal flood disaster relief payments (including loans and
grants) are counted only if the building suffered flood damage. A flood insurance claim payment
(building and/or contents) and a Federal flood disaster relief payment (including loans and grants)
for the same loss are considered a single payment.
Clarifying Crawl Space Rating
Determining which rating table to use for a building constructed before the Flood Insurance Rate Map
(FIRM) was published for the area in which the structure is located can become more complex if the
building has a crawl space. As of October 1, 2006, Pre-FIRM buildings with subgrade crawl spaces may
now--for the first time--use optional Post-FIRM elevation rating, provided that the lowest floor is
below the Base Flood Elevation. The building must be reported statistically as a "submit-for-rate"
policy using Risk Rating Method 2. To process these risks, agents must follow the submit-for-rate
procedures on pages RATE 23-24. This is the only Pre-FIRM construction that can be rated using the
submit-for-rate procedure.
Cancellation Code 01
Clarification has been provided in the manual's October 1, 2006, changes for situations in which an
insured wants to cancel his or her policy because the building has been foreclosed or because it
has sustained flood damage equal to or greater than its replacement cost and is considered a total
loss. In such cases, agents must use cancellation/nullification reason code "01" on the
Cancellation/Nullification Request Form and submit this with proper documentation to the current NFIP
insurer to process the cancellation of the flood insurance policy.
CRS Changes
A number of new communities have joined the Community Rating System or have improved their class
rating as of October 1, 2006. See "Increasing Policyholder Discounts" for these changes and
"First-Rate Community" for a description of the first community to receive the CRS Class 1 rating.
Start of Waiting Period
There is a standard 30-day waiting period for new applications and for endorsements to increase
coverage. If the application or endorsement form and the premium payment are received at the NFIP
within 10 days from the date of application or endorsement request, or if mailed by certified mail
within 4 days from the date of application or endorsement request, then the waiting period will be
calculated from the application or endorsement date.
An October 1, 2006, clarification states that agents must count the application date (or the
endorsement date) plus 9 days to determine if the application or endorsement and premium payment
were received within 10 days. When these materials are sent by certified mail, agents count the
application date (or endorsement date) plus 3 days to determine if the application or endorsement
and premium payment were received within 4 days.
Getting the Details
You will find all recent enhancements to the
Flood Insurance Manual by accessing the manual online or by ordering it from FEMA's
Map Service Center (800-358-9616). Semiannual revisions are identified by a vertical bar in the
page margin next to the text, table, or illustration that has been changed.
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| Last Modified:
Friday, 21 January 2011 |
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