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Stephen Hadhazi, Pubic Insurance Adjuster, Proudly presents:

National Flood Insurance Program Dwelling Form

Standard Flood Insurance Policy

DWELLING FORM
Summary of Significant Changes, December 31, 2000

1. Section III. Property Covered, A. Coverage A -
Building Property, 2.
Additions and extensions to buildings that are connected
by a rigid exterior wall, a solid load-bearing interior wall, a
stairway, an elevated walkway, or a roof may be insured
as part of the dwelling. At the option of the insured, these
extensions and additions may be insured separately.
Additions and extensions that are 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 insured
separately.
2. Section III. Property Covered, A. Coverage A -
Building Property, 3.
Coverage for detached carports has been eliminated.
3. Section III. Property Covered, B. Coverage B -
Personal Property 4.
Coverage has been extended to include coverage for
cooking stoves, ranges, or refrigerators belonging to the
renter, as well as 10 percent of contents coverage for
improvements made by the renter to the building.
4. Section III. Property Covered, B. Coverage B -
Personal Property, 5.
Coverage for condominium unit owners has been
extended to apply up to 10 percent of the contents
coverage for losses to interior walls, floors, and ceilings
not covered by the condominium association's master
policy.
5. Section III. Property Covered, B. Coverage B -
Personal Property, 6. Special Limits
Coverage for fine arts, collectibles, jewelry, and furs, etc.
has been increased to $2500. Also, personal property
used in a business has been added under this extension
of coverage.
6. Section III. Property Covered, C. Coverage C -
Other Coverages, 2.a. & b.
Coverage for the two loss avoidance measures
(sandbagging and relocation of property to protect it from
flood or the imminent danger of flood) has been increased
to $1,000 for each.
7. Section IV. Property Not Covered, 5.a. & b.
Coverage has been changed to pay for losses to selfpropelled
vehicles used to service the described location
or designed to assist handicapped persons provided that
the vehicles are in a building at the described location.
8. Section IV. Property Not Covered, 7.
Coverage is now specifically excluded for scrip and stored
value cards.

9. Section IV. Property Not Covered, 14.
Coverage for swimming pools, hot tubs and spas (that are
not bathroom hot tubs or spas), and their equipment is
now excluded.
10. Section V. Exclusions, B.1. & 2
The explanation of when coverage begins as it relates to a
loss in progress has been simplified.
11. Section V. Exclusions, C.
Coverage has been clarified to 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 continues to be covered. All
other land subsidence is now excluded.
12. Section V. Exclusions, D.4.b.(3)
Coverage is now excluded for water, moisture, mildew, or
mold damage caused by the policyholder's failure to
inspect and maintain the insured property after the flood
waters recede.
13. Section V. Exclusions, D.6.
Coverage is now added for damage from the pressure of
water against the insured structure with the requirement
that there be a flood in the area and the flood is the
proximate cause of damage from the pressure of water
against the insured structure.
14. Section V. Exclusions, F.
An exclusion for the cost of testing for or monitoring of
pollutants unless it is required by law or ordinance has
been added.
15. Section VII. General Conditions, G. Reduction and
Reformation of Coverage, 2.a.(2)
If it is discovered before a claim occurs that there is
incomplete rating information, the policyholder has 60
days to submit the missing rating information. Otherwise,
the coverage is limited to the amount of coverage that can
be purchased for the premium originally received and can
only be increased by an endorsement that is subject to the
appropriate waiting period (currently 30 days).
16. Section VII. General Conditions, V. Loss
Settlement, 3. Special Loss Settlement, b.(1)
Coverage for a manufactured or mobile home or a travel
trailer eligible for replacement cost coverage is limited to
1.5 times its actual cash value.

FEDERAL EMERGENCY MANAGEMENT AGENCY
NATIONAL FLOOD INSURANCE PROGRAM
STANDARD FLOOD INSURANCE POLICY
DWELLING FORM
PLEASE READ THE POLICY CAREFULLY. THE FLOOD INSURANCE PROVIDED IS SUBJECT TO LIMITATIONS,
RESTRICTIONS, AND EXCLUSIONS.
THIS POLICY COVERS ONLY:
1. A NON-CONDOMINIUM RESIDENTIAL BUILDING DESIGNED FOR PRINCIPAL USE AS A DWELLING PLACE FOR
ONE TO FOUR FAMILIES, OR
2. A SINGLE-FAMILY DWELLING UNIT IN A CONDOMINIUM BUILDING.
I. AGREEMENT
The Federal Emergency Management Agency (FEMA)
provides flood insurance under the terms of the National
Flood Insurance Act of 1968 and its amendments, and
Title 44 of the Code of Federal Regulations (CFR).
We will pay you for direct physical loss by or from flood
to your insured property if you:
1. Have paid the correct premium;
2. Comply with all terms and conditions of this policy;
and
3. Have furnished accurate information and statements.
We have the right to review the information you give us at
any time and to revise your policy based on our review.
II. DEFINITIONS
A. In this policy, "you" and "your" refer to the insured(s)
shown on the Declarations Page of this policy and
your spouse, if a resident of the same household.
"Insured(s)" includes: Any mortgagee and loss payee
named in the Application and Declarations Page,
as well as any other mortgagee or loss payee
determined to exist at the time of loss in the order of
precedence. "We," "us," and "our" refer to the insurer.
Some definitions are complex because they are provided
as they appear in the law or regulations, or result from
court cases. The precise definitions are intended to protect
you.
Flood, as used in this flood insurance policy, means:
1. 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 (at least
one of which is your property) from:
a. Overflow of inland or tidal waters;
b. Unusual and rapid accumulation or runoff of
surface waters from any source;
c. Mudflow.
2. Collapse or subsidence of land along the shore of 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 as defined in A.1.a. above.
B. The following are the other key definitions that we use
in this policy:
1. Act. The National Flood Insurance Act of 1968 and
any amendments to it.
2. Actual Cash Value. The cost to replace an insured
item of property at the time of loss, less the value of
its physical depreciation.
3. Application. The statement made and signed by you
or your agent in applying for this policy. The
application gives information we use to determine
the eligibility of the risk, the kind of policy to be
issued, and the correct premium payment. The
application is part of this flood insurance policy. For
us to issue you a policy, the correct premium
payment must accompany the application.
4. Base Flood. A flood having a one percent chance of
being equaled or exceeded in any given year.

5. Basement. 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.
6. Building.
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 B.6.c. above.
7. Cancellation. The ending of the insurance coverage
provided by this policy before the expiration date.
8. Condominium. That form of ownership of real
property in which each unit owner has an undivided
interest in common elements.
9. 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.
10. Declarations Page. A computer-generated summary
of information you provided in the application for
insurance. The Declarations Page also describes the
term of the policy, limits of coverage, and displays
the premium and our name. The Declarations Page
is a part of this flood insurance policy.
11. Described Location. The location where the insured
building(s) or personal property are found. The
described location is shown on the Declarations
Page.
12. Direct Physical Loss By or From Flood. Loss or
damage to insured property, directly caused by a
flood. There must be evidence of physical changes
to the property.
13. Dwelling. A building designed for use as a residence
for no more than four families or a single-family unit
in a building under a condominium form of
ownership.
14. Elevated Building. 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.
15. Emergency Program. 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.
16. Expense Constant. A flat charge you must pay on
each new or renewal policy to defray the expenses of
the Federal Government related to flood insurance.
17. Federal Policy Fee. A flat charge you must pay on
each new or renewal policy to defray certain
administrative expenses incurred in carrying out the
National Flood Insurance Program. This fee covers
expenses not covered by the expense constant.
18. Improvements. Fixtures, alterations, installations, or
additions comprising a part of the insured dwelling or
the apartment in which you reside.
19. Mudflow. 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 earth movements,
such as landslide, slope failure, or a saturated soil
mass moving by liquidity down a slope, are not
mudflows.
20. National Flood Insurance Program (NFIP). The
program of flood insurance coverage and floodplain
management administered under the Act and
applicable Federal regulations in Title 44 of the Code
of Federal Regulations, Subchapter B.
21. Policy. The entire written contract between you and
us. It includes:
a. This printed form;
b. The application and Declarations Page;
c. Any endorsement(s) that may be issued; and
d. Any renewal certificate indicating that coverage
has been instituted for a new policy and new
policy term.
Only one dwelling, which you specifically described
in the application, may be insured under this policy.
22. Pollutants. 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.
Page 3 of 19
23. Post-FIRM Building. 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.
24. Probation Premium. A flat charge 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 44 CFR 59.24.
25. Regular Program. 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.
26. Special Flood Hazard Area. 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,
A1-A30, AE, A99, AH, AR, AR/A, AR/AE, AR/AH,
AR/AO, AR/A1-A30, V1-V30, VE, or V.
27. Unit. A single-family unit you own in a condominium
building.
28. Valued Policy. A policy in which the insured and the
insurer agree on the value of the property insured,
that value being payable in the event of a total loss.
The Standard Flood Insurance Policy is not a valued
policy.
III. PROPERTY COVERED
A. COVERAGE A - BUILDING PROPERTY
We insure 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 as set forth in
III.C.2.b., Property Removed to Safety.
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. At your option, 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 loadbearing
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. Use of this insurance
is at your option but reduces the building limit of
liability. We do not cover any detached garage used
or held for use for residential (i.e., dwelling),
business, or farming purposes.
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.
a. If the structure is not yet walled or roofed as
described in the definition for building (see II.B.
6.a.) then coverage applies:
(1) Only while such work is in progress; or
(2) If such work is halted, only for a period of up
to 90 continuous days thereafter.
b. 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, A1-A30, AR, AR/AE, AR/AH,
AR/A1-A30, AR/A, AR/AO; or
(2) Below the base flood elevation adjusted to
include the effect of wave action in Zones VE
or V1-V30.
The lowest floor levels are based on the bottom
of the lowest horizontal structural member of the
floor in Zones VE or V1-V30 and the top of the
floor in Zones AH, AE, A1-A30, AR, AR/AE,
AR/AH, AR/A1-A30, AR/A, AR/AO.
6. A manufactured home or a travel trailer as described
in the Definitions section (see II.B.6.b. and II.B.6.c.).
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 requirements;
Page 4 of 19
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;
l. 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 installed.
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/AE, 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 necessary 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.
B. COVERAGE B - PERSONAL PROPERTY
1. If you have purchased personal property coverage,
we insure against direct physical loss by or from
flood to personal property inside a building at the
described location, if:
a. The property is owned by you or your household
family members; and
b. At your option, the property is owned by guests
or servants.
Personal property is also covered for a period of 45
days at another location as set forth in III.C.2.b.,
Property Removed to Safety.
Personal property in a building that is not fully
enclosed must be secured to prevent flotation out of
the building. 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.
2. Coverage for personal property includes the following
property, subject to B.1. above, which is covered
under Coverage B only:
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.
3. Coverage for 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/AE, AR/AH, AR/A1-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.
Page 5 of 19
4. If you are a tenant and have insured personal
property under Coverage B in this policy, we will
cover such property, including your cooking stove or
range and refrigerator. The policy will also cover
improvements made or acquired solely at your
expense in the dwelling or apartment in which you
reside, but for not more than 10 percent of the limit of
liability shown for personal property on the
Declarations Page. Use of this insurance is at your
option but reduces the personal property limit of
liability.
5. If you are the owner of a unit and have insured
personal property under Coverage B in this policy,
we will also cover your interior walls, floor, and ceiling
(not otherwise covered under a flood insurance
policy purchased by your condominium
association) for not more than 10 percent of the limit
of liability shown for personal property on the
Declarations Page. Use of this insurance is at your
option but reduces the personal property limit of
liability.
6. Special Limits. We 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. We will pay only for the functional value of antiques.
C. COVERAGE C - OTHER COVERAGES
1. Debris Removal
a. We will pay the expense to remove non-owned
debris on or in insured property and owned
debris anywhere.
b. If you or a member of your household perform
the removal work, the value of your work will be
based on the Federal minimum wage.
c. This coverage does not increase the Coverage A
or Coverage B limit of liability.
2. Loss Avoidance Measures
a. Sandbags, Supplies, and Labor
(1) We will pay up to $1,000 for costs you incur
to protect the insured building from a flood
or imminent danger of flood, for the
following:
(a) Your reasonable expenses to buy:
(i) Sandbags, including sand to fill
them;
(ii) Fill for temporary levees;
(iii) Pumps; and
(iv) Plastic sheeting and lumber used in
connection with these items.
(b) The value of work, at the Federal
minimum wage, that you or a member of
your household perform.
(2) 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.
b. Property Removed to Safety
(1) We will pay up to $1,000 for the reasonable
expenses you incur 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.
Page 6 of 19
Reasonable expenses include the value of
work, at the Federal minimum wage, that you
or a member of your household perform.
(2) If you move insured property 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,
we will cover such property while at that
location for a period of 45 consecutive days
from the date you begin to move it there. 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 II.B.6.b. and c., 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.
3. Condominium Loss Assessments
a. If this policy insures a unit, we will pay, up to the
Coverage A limit of liability, your share of loss
assessments charged against you by the
condominium association in accordance with
the condominium association's articles of
association, declarations and your 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.
b. We will not pay any loss assessment charged
against you:
(1) And the condominium association by any
governmental body;
(2) That results from a deductible under the
insurance purchased by the condominium
association insuring common elements;
(3) That results from a loss to personal property,
including contents of a condominium
building;
(4) 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;
(5) 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
(6) To the extent that payment under this policy
for a condominium building loss, in
combination with any recovery available to
you as a 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.
D. COVERAGE D - INCREASED COST OF COMPLIANCE
1. General
This policy pays you to comply with a State or local
floodplain management law or ordinance affecting
repair or reconstruction of a structure suffering flood
damage. Compliance activities eligible for payment
are: elevation, floodproofing, relocation, or demolition
(or any combination of these activities) of your
structure. Eligible floodproofing activities are limited
to:
a. Nonresidential structures.
b. Residential structures with basements that
satisfy FEMA's standards published in the Code
of Federal Regulations [44 CFR 60.6 (b) or (c)].
2. Limit of Liability
We will pay you up to $30,000 under this Coverage D
- Increased Cost of Compliance, which only applies to
policies with building coverage (Coverage A). Our
payment of claims under Coverage D is in addition to
the amount of coverage which you selected on the
application and which appears on the Declarations
Page. But the maximum you can collect under this
policy for both Coverage A - Building Property and
Coverage D - Increased Cost of Compliance cannot
exceed the maximum permitted under the Act. We do
not charge a separate deductible for a claim under
Coverage D.

3. Eligibility
a. A structure covered under Coverage A - Building
Property sustaining a loss caused by a flood as
defined by this policy must:
(1) Be a "repetitive loss structure." A repetitive
loss structure is one that meets the following
conditions:
(a) The structure is covered by a contract of
flood insurance issued under the NFIP.
(b) The structure has suffered flood
damage on two occasions during a 10-
year period which ends on the date of
the second loss.
(c) The cost to repair the flood damage, on
average, equaled or exceeded 25
percent of the market value of the
structure at the time of each flood loss.
(d) In addition to the current claim, the NFIP
must have paid the previous qualifying
claim, and the State or community must
have a cumulative, substantial damage
provision or repetitive loss provision in
its floodplain management law or
ordinance being enforced against the
structure; or
(2) Be a structure that has had flood damage in
which the cost to repair equals or exceeds
50 percent of the market value of the
structure at the time of the flood. The State
or community must have a substantial
damage provision in its floodplain
management law or ordinance being
enforced against the structure.
b. This Coverage D pays you to comply with State or
local floodplain management laws or ordinances
that meet the minimum standards of the National
Flood Insurance Program found in the Code of
Federal Regulations at 44 CFR 60.3. We pay for
compliance activities that exceed those standards
under these conditions:
(1) 3.a.(1) above.
(2) Elevation or floodproofing in any risk zone to
preliminary or advisory base flood
elevations provided by FEMA which the
State or local government has adopted and
is enforcing for flood-damaged structures in
such areas. (This includes compliance
activities in B, C, X, or D zones which are
being changed to zones with base flood
elevations. This also includes compliance
activities in zones where base flood
elevations are being increased, and a flooddamaged
structure must comply with the
higher advisory base flood elevation.)
Increased Cost of Compliance coverage
does not apply to situations in B, C, X, or D
zones where the community has derived its
own elevations and is enforcing elevation or
floodproofing requirements for flooddamaged
structures to elevations derived
solely by the community.
(3) Elevation or floodproofing above the base
flood elevation to meet State or local
"freeboard" requirements, i.e., that a
structure must be elevated above the base
flood elevation.
c. Under the minimum NFIP criteria at 44 CFR 60.3
(b)(4), States and communities must require the
elevation or floodproofing of structures in
unnumbered A zones to the base flood elevation
where elevation data is obtained from a Federal,
State, or other source. Such compliance activities
are also eligible for Coverage D.
d. This coverage will also pay for the incremental
cost, after demolition or relocation, of elevating or
floodproofing a structure during its rebuilding at
the same or another site to meet State or local
floodplain management laws or ordinances,
subject to Exclusion D.5.g. below.
e. This coverage will also pay to bring a flooddamaged
structure into compliance with State or
local floodplain management laws or ordinances
even if the structure had received a variance
before the present loss from the applicable
floodplain management requirements.
4. Conditions
a. When a structure covered under Coverage A -
Building Property sustains a loss caused by a
flood, our payment for the loss under this
Coverage D will be for the increased cost to
elevate, floodproof, relocate, or demolish (or any
combination of these activities) caused by the
enforcement of current State or local floodplain
management ordinances or laws. Our payment for
eligible demolition activities will be for the cost to
demolish and clear the site of the building debris
or a portion thereof caused by the enforcement of
current State or local floodplain management
ordinances or laws. Eligible activities for the cost of
clearing the site will include those necessary to
discontinue utility service to the site and ensure
proper abandonment of on-site utilities.
b. When the building is repaired or rebuilt, it must be
intended for the same occupancy as the present
building unless otherwise required by current
floodplain management ordinances or laws.
Page 8 of 19
5. Exclusions
Under this Coverage D - Increased Cost of
Compliance, we will not pay for:
a. The cost to comply with any floodplain
management law or ordinance in communities
participating in the Emergency Program.
b. The cost associated with enforcement of any
ordinance or law that requires any insured or
others to test for, monitor, clean up, remove,
contain, treat, detoxify or neutralize, or in any way
respond to, or assess the effects of pollutants.
c. The loss in value to any insured building or other
structure due to the requirements of any ordinance
or law.
d. The loss in residual value of the undamaged
portion of a building demolished as a consequence
of enforcement of any State or local
floodplain management law or ordinance.
e. Any Increased Cost of Compliance under this
Coverage D:
(1) Until the building is elevated, floodproofed,
demolished, or relocated on the same or to
another premises; and
(2) Unless the building is elevated, floodproofed,
demolished, or relocated as soon as
reasonably possible after the loss, not to
exceed 2 years (see 3.b.).
f. Any code upgrade requirements, e.g., plumbing or
electrical wiring, not specifically related to the State
or local floodplain management law or ordinance.
g. Any compliance activities needed to bring
additions or improvements made after the loss
occurred into compliance with State or local
floodplain management laws or ordinances.
h. Loss due to any ordinance or law that you were
required to comply with before the current loss.
i. Any rebuilding activity to standards that do not
meet the NFIP's minimum requirements. This
includes any situation where you have received
from the State or community a variance in
connection with the current flood loss to rebuild
the property to an elevation below the base flood
elevation.
j. Increased Cost of Compliance for a garage or
carport.
k. Any structure insured under an NFIP Group Flood
Insurance Policy.
l. Assessments made by a condominium
association on individual condominium unit
owners to pay increased costs of repairing
commonly owned buildings after a flood in
compliance with State or local floodplain
management ordinances or laws.
6. Other Provisions
a. Increased Cost of Compliance coverage will not be
included in the calculation to determine whether
coverage meets the 80 percent insurance-to-value
requirement for replacement cost coverage as set
forth in VII. General Conditions, V. Loss
Settlement.
b. All other conditions and provisions of this policy
apply.
IV. PROPERTY NOT COVERED
We do not cover any of the following 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 II.B.6.c., whether affixed to a permanent
foundation or on wheels;
5. Self-propelled vehicles or machines, including their
parts and equipment. However, we do cover selfpropelled
vehicles or machines not licensed for use
on public roads that are:
a. Used mainly to service the described location,
or
b. 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;
Page 9 of 19
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 you own in common with other unit
owners comprising the membership of a
condominium association.
V. EXCLUSIONS
A. We only provide coverage for direct physical loss
by or from flood, which means that we do not pay
you for:
1. Loss of revenue or profits;
2. Loss of access to the insured property or described
location;
3. Loss of use of the insured property or described
location;
4. Loss from interruption of business or production;
5. Any additional living expenses incurred while the
insured building is being repaired or is unable to be
occupied for any reason;
6. The cost of complying with any ordinance or law
requiring or 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.
B. We do not insure a loss directly or indirectly caused
by a flood that is already in progress at the time and
date:
1. The policy term begins; or
2. Coverage is added at your request.
C. We do not insure for 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 area; or
6. Gradual erosion.
We do, however, pay for losses from mudflow and land
subsidence as a result of erosion that are specifically
covered under our definition of flood (see II.A.1.c. and
II.A.2.).
D. We do not insure for 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:
a. Substantially confined to the dwelling; or
b. That is within your control, including but not
limited to:
(1) Design, structural, or mechanical defects;
Page 10 of 19
(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;
5. Water or waterborne material that:
a. Backs up through sewers or drains;
b. Discharges or overflows from a sump, sump
pump, or related equipment; or
c. 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;
6. The pressure or weight of water unless there is a
flood in the area and the flood is the proximate
cause of the damage from the pressure or weight of
water;
7. Power, heating, or cooling failure unless the failure
results from direct physical loss by or from flood to
power, heating, or cooling equipment on the
described location;
8. Theft, fire, explosion, wind, or windstorm;
9. Anything you or any member of your household do or
conspire to do to cause loss by flood deliberately; or
10. Alteration of the insured property that significantly
increases the risk of flooding.
E. We do not insure for loss to any building or personal
property located on land leased from the Federal
Government, arising from or incident to the flooding of
the land by the Federal Government, where the lease
expressly holds the Federal Government harmless
under flood insurance issued under any Federal
Government program.
F. We do not pay for the testing for or monitoring of
pollutants unless required by law or ordinance.
VI. DEDUCTIBLES
A. When a loss is covered under this policy, we will pay
only that part of the loss that exceeds your deductible
amount, subject to the limit of liability that applies. The
deductible amount 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, your deductible amount will be two times the
deductible that would otherwise apply to a completed
building.
B. In each loss from flood, separate deductibles apply to
the building and personal property insured by this
policy.
C. The deductible does not apply to:
1. III.C.2. Loss Avoidance Measures;
2. III.C.3. Condominium Loss Assessments; or
3. III.D. Increased Cost of Compliance.
VII. GENERAL CONDITIONS
A. Pairs and Sets
In case of loss to an article that is part of a pair or set, we
will have the option of paying you:
1. An amount equal to the cost of replacing the lost,
damaged, or destroyed article, minus its depreciation;
or
2. The amount that represents the fair proportion of the
total value of the pair or set that the lost, damaged, or
destroyed article bears to the pair or set.
B. Concealment or Fraud and Policy Voidance
1. With respect to all insureds under this policy, this
policy:
a. Is void;
b. Has no legal force or effect;
c. Cannot be renewed; and
d. Cannot be replaced by a new NFIP policy;
Page 11 of 19
if, before or after a loss, you or any other insured or
your agent have at any time:
(1) Intentionally concealed or misrepresented
any material fact or circumstance;
(2) Engaged in fraudulent conduct; or
(3) Made false statements;
relating to this policy or any other NFIP
insurance.
2. This policy will be void as of the date the wrongful
acts described in B.1. above were committed.
3. Fines, civil penalties, and imprisonment under
applicable Federal laws may also apply to the acts of
fraud or concealment described above.
4. This policy is also void for reasons other than fraud,
misrepresentation, or wrongful act. This policy is void
from its inception and has no legal force under the
following conditions:
a. If the property is located in a community that was
not participating in the NFIP on the policy's
inception date and did not join or reenter the
program during the policy term and before the
loss occurred; or
b. If the property listed on the application is
otherwise not eligible for coverage under the
NFIP.
C. Other Insurance
1. If a loss covered by this policy is also covered by
other insurance that includes flood coverage not
issued under the Act, we will not pay more than the
amount of insurance that you are entitled to for lost,
damaged, or destroyed property insured under this
policy subject to the following:
a. We will pay only the proportion of the loss that
the amount of insurance that applies under this
policy bears to the total amount of insurance
covering the loss, unless C.1.b. or c. immediately
below applies.
b. If the other policy has a provision stating that it is
excess insurance, this policy will be primary.
c. This policy will be primary (but subject to its own
deductible) up to the deductible in the other flood
policy (except another policy as described in
C.1.b. above). When the other deductible amount
is reached, this policy will participate in the same
proportion that the amount of insurance under
this policy bears to the total amount of both
policies, for the remainder of the loss.
2. If there is other insurance in the name of your
condominium association covering the same
property covered by this policy, then this policy will
be in excess over the other insurance.
D. Amendments, Waivers, Assignment
This policy cannot be changed nor can any of its
provisions be waived without the express written consent
of the Federal Insurance Administrator. No action that we
take under the terms of this policy constitutes a waiver of
any of our rights. You may assign this policy in writing
when you transfer title of your property to someone else,
except under these conditions:
1. When this policy covers only personal property; or
2. When this policy covers a structure during the course
of construction.
E. Cancellation of Policy by You
1. You may cancel this policy in accordance with the
applicable rules and regulations of the NFIP.
2. If you cancel this policy, you may be entitled to a full
or partial refund of premium also under the applicable
rules and regulations of the NFIP.
F. Nonrenewal of the Policy by Us
Your policy will not be renewed:
1. If the community where your covered property is
located stops participating in the NFIP; or
2. If your building has been declared ineligible under
Section 1316 of the Act.
G. Reduction and Reformation of Coverage
1. If the premium we received from you was not enough
to buy the kind and amount of coverage you
requested, we will provide only the amount of
coverage that can be purchased for the premium
payment we received.
2. The policy can be reformed to increase the amount
of coverage resulting from the reduction described in
G.1. above to the amount you requested as follows:
a. Discovery of insufficient premium or incomplete
rating information before a loss.
(1) If we discover before you have a flood loss
that your premium payment was not enough
to buy the requested amount of coverage,
we will send you and any mortgagee or
trustee known to us a bill for the required
additional premium for the current policy
term (or that portion of the current policy
term following any endorsement changing
Page 12 of 19
the amount of coverage). If you or the
mortgagee or trustee pay the additional
premium within 30 days from the date of our
bill, we will reform the policy to increase the
amount of coverage to the originally
requested amount effective to the beginning
of the current policy term (or subsequent
date of any endorsement changing the
amount of coverage).
(2) If we determine before you have a flood loss
that the rating information we have is
incomplete and prevents us from calculating
the additional premium, we will ask you to
send the required information. You must
submit the information within 60 days of our
request. Once we determine the amount of
additional premium for the current policy
term, we will follow the procedure in
G.2.a.(1) above.
(3) If we do not receive the additional premium
(or additional information) by the date it is
due, the amount of coverage can only be
increased by endorsement subject to any
appropriate waiting period.
b. Discovery of insufficient premium or incomplete
rating information after a loss.
(1) If we discover after you have a flood loss
that your premium payment was not enough
to buy the requested amount of coverage,
we will send you and any mortgagee or
trustee known to us a bill for the required
additional premium for the current and the
prior policy terms. If you or the mortgagee
or trustee pay the additional premium within
30 days from the date of our bill, we will
reform the policy to increase the amount of
coverage to the originally requested amount
effective to the beginning of the prior policy
term.
(2) If we discover after you have a flood loss
that the rating information we have is
incomplete and prevents us from calculating
the additional premium, we will ask you to
send the required information. You must
submit the information before your claim can
be paid. Once we determine the amount of
additional premium for the current and prior
policy terms, we will follow the procedure in
G.2.b.(1) above.
(3) If we do not receive the additional premium
by the date it is due, your flood insurance
claim will be settled based on the reduced
amount of coverage. The amount of
coverage can only be increased by
endorsement subject to any appropriate
waiting period.
3. However, if we find that you or your agent
intentionally did not tell us, or falsified, any important
fact or circumstance or did anything fraudulent
relating to this insurance, the provisions of Condition
B. Concealment or Fraud and Policy Voidance apply.
H. Policy Renewal
1. This policy will expire at 12:01 a.m. on the last day of
the policy term.
2. We must receive the payment of the appropriate
renewal premium within 30 days of the expiration
date.
3. If we find, however, that we did not place your
renewal notice into the U.S. Postal Service, or if we
did mail it, we made a mistake, e.g., we used an
incorrect, incomplete, or illegible address, which
delayed its delivery to you before the due date for the
renewal premium, then we will follow these
procedures:
a. If you or your agent notified us, not later than 1
year after the date on which the payment of the
renewal premium was due, of nonreceipt of a
renewal notice before the due date for the
renewal premium, and we determine that the
circumstances in the preceding paragraph apply,
we will mail a second bill providing a revised due
date, which will be 30 days after the date on
which the bill is mailed.
b. If we do not receive the premium requested in the
second bill by the revised due date, then we will
not renew the policy. In that case, the policy
will remain an expired policy as of the expiration
date shown on the Declarations Page.
4. In connection with the renewal of this policy, we may
ask you during the policy term to recertify, on a
Recertification Questionnaire we will provide to you,
the rating information used to rate your most recent
application for or renewal of insurance.
I. Conditions Suspending or Restricting Insurance
We are not liable for loss that occurs while there is a
hazard that is increased by any means within your control
or knowledge.
J. Requirements in Case of Loss
In case of a flood loss to insured property, you must:
1. Give prompt written notice to us;
2. As soon as reasonably possible, separate the
damaged and undamaged property, putting it in the
best possible order so that we may examine it;
3. Prepare an inventory of damaged property showing
the quantity, description, actual cash value, and
amount of loss. Attach all bills, receipts, and related
documents;
Page 13 of 19
4. Within 60 days after the loss, send us a proof of loss,
which is your statement of the amount you are
claiming under the policy signed and sworn to by
you, and which furnishes us with the following
information:
a. The date and time of loss;
b. A brief explanation of how the loss happened;
c. Your interest (for example, "owner") and the
interest, if any, of others in the damaged
property;
d. Details of any other insurance that may cover the
loss;
e. Changes in title or occupancy of the covered
property during the term of the policy;
f. Specifications of damaged buildings and
detailed repair estimates;
g. Names of mortgagees or anyone else having a
lien, charge, or claim against the covered
property;
h. Details about who occupied any insured building
at the time of loss and for what purpose; and
i. The inventory of damaged personal property
described in J.3. above.
5. In completing the proof of loss, you must use your
own judgment concerning the amount of loss and
justify that amount.
6. You must cooperate with the adjuster or
representative in the investigation of the claim.
7. The insurance adjuster whom we hire to investigate
your claim may furnish you with a proof of loss form,
and she or he may help you complete it. However,
this is a matter of courtesy only, and you must still
send us a proof of loss within 60 days after the loss
even if the adjuster does not furnish the form or help
you complete it.
8. We have not authorized the adjuster to approve or
disapprove claims or to tell you whether we will
approve your claim.
9. At our option, we may accept the adjuster's report of
the loss instead of your proof of loss. The adjuster's
report will include information about your loss and the
damages you sustained. You must sign the adjuster's
report. At our option, we may require you to swear to
the report.
K. Our Options After a Loss
Options we may, in our sole discretion, exercise after loss
include the following:
1. At such reasonable times and places that we may
designate, you must:
a. Show us or our representative the damaged
property;
b. Submit to examination under oath, while not in
the presence of another insured, and sign the
same; and
c. Permit us to examine and make extracts and
copies of:
(1) Any policies of property insurance insuring
you against loss and the deed establishing
your ownership of the insured real property;
(2) Condominium association documents
including the Declarations of the
condominium, its Articles of Association or
Incorporation, Bylaws, rules and regulations,
and other relevant documents if you are a
unit owner in a condominium building; and
(3) All books of accounts, bills, invoices and
other vouchers, or certified copies pertaining
to the damaged property if the originals are
lost.
2. We may request, in writing, that you furnish us with a
complete inventory of the lost, damaged, or destroyed
property, including:
a. Quantities and costs;
b. Actual cash values or replacement cost
(whichever is appropriate);
c. Amounts of loss claimed;
d. Any written plans and specifications for repair of
the damaged property that you can reasonably
make available to us; and
e. Evidence that prior flood damage has been
repaired.
3. If we give you written notice within 30 days after we
receive your signed, sworn proof of loss, we may:
a. Repair, rebuild, or replace any part of the lost,
damaged, or destroyed property with material or
property of like kind and quality or its functional
equivalent; and
b. Take all or any part of the damaged property at
the value we agree upon or its appraised value.
L. No Benefit to Bailee
No person or organization, other than you, having custody
of covered property will benefit from this insurance.

M. Loss Payment
1. We will adjust all losses with you. We will pay you
unless some other person or entity is named in the
policy or is legally entitled to receive payment. Loss
will be payable 60 days after we receive your proof of
loss (or within 90 days after the insurance adjuster
files an adjuster’s report signed and sworn to by you
in lieu of a proof of loss) and:
a. We reach an agreement with you;
b. There is an entry of a final judgment; or
c. There is a filing of an appraisal award with us, as
provided in VII.P.
2. If we reject your proof of loss in whole or in part you
may:
a. Accept our denial of your claim;
b. Exercise your rights under this policy; or
c. File an amended proof of loss, as long as it is
filed within 60 days of the date of the loss.
N. Abandonment
You may not abandon to us damaged or undamaged
property insured under this policy.
O. Salvage
We may permit you to keep damaged insured property
after a loss, and we will reduce the amount of the loss
proceeds payable to you under the policy by the value of
the salvage.
P. Appraisal
If you and we fail to agree on the actual cash value or, if
applicable, replacement cost of your damaged property to
settle upon the amount of loss, then either may demand
an appraisal of the loss. In this event, you and we will
each choose a competent and impartial appraiser within
20 days after receiving a written request from the other.
The two appraisers will choose an umpire. If they cannot
agree upon an umpire within 15 days, you or we may
request that the choice be made by a judge of a court of
record in the State where the covered property is located.
The appraisers will separately state the actual cash
value, the replacement cost, and the amount of loss to
each item. If the appraisers submit a written report of an
agreement to us, the amount agreed upon will be the
amount of loss. If they fail to agree, they will submit their
differences to the umpire. A decision agreed to by any two
will set the amount of actual cash value and loss, or if it
applies, the replacement cost and loss.
Each party will:
1. Pay its own appraiser; and
2. Bear the other expenses of the appraisal and umpire
equally.
Q. Mortgage Clause
The word "mortgagee" includes trustee.
Any loss payable under Coverage A - Building Property
will be paid to any mortgagee of whom we have actual
notice as well as any other mortgagee or loss payee
determined to exist at the time of loss, and you, as
interests appear. If more than one mortgagee is named,
the order of payment will be the same as the order of
precedence of the mortgages.
If we deny your claim, that denial will not apply to a valid
claim of the mortgagee, if the mortgagee:
1. Notifies us of any change in the ownership or
occupancy, or substantial change in risk of which the
mortgagee is aware;
2. Pays any premium due under this policy on demand
if you have neglected to pay the premium; and
3. Submits a signed, sworn proof of loss within 60 days
after receiving notice from us of your failure to do so.
All of the terms of this policy apply to the mortgagee.
The mortgagee has the right to receive loss payment even
if the mortgagee has started foreclosure or similar action
on the building.
If we decide to cancel or not renew this policy, it will
continue in effect for the benefit of the mortgagee only for
30 days after we notify the mortgagee of the cancellation
or nonrenewal.
If we pay the mortgagee for any loss and deny payment to
you, we are subrogated to all the rights of the mortgagee
granted under the mortgage on the property. Subrogation
will not impair the right of the mortgagee to recover the full
amount of the mortgagee's claim.
R. Suit Against Us
You may not sue us to recover money under this policy
unless you have complied with all the requirements of the
policy. If you do sue, you must start the suit within 1 year
after the date of the written denial of all or part of the
claim, and you must file the suit in the United States
District Court of the district in which the insured property
was located at the time of loss. This requirement applies
to any claim that you may have under this policy and to
any dispute that you may have arising out of the handling
of any claim under the policy.
S. Subrogation
Whenever we make a payment for a loss under this
policy, we are subrogated to your right to recover for that
loss from any other person. That means that your right to
Page 15 of 19
recover for a loss that was partly or totally caused by
someone else is automatically transferred to us, to the
extent that we have paid you for the loss. We may require
you to acknowledge this transfer in writing. After the loss,
you may not give up our right to recover this money or do
anything that would prevent us from recovering it. If you
make any claim against any person who caused your loss
and recover any money, you must pay us back first before
you may keep any of that money.
T. Continuous Lake Flooding
1. If your insured building has been flooded by rising
lake waters continuously for 90 days or more and it
appears reasonably certain that a continuation of this
flooding will result in a covered loss to the insured
building equal to or greater than the building policy
limits plus the deductible or the maximum payable
under the policy for any one building loss, we will
pay you the lesser of these two amounts without
waiting for the further damage to occur if you sign a
release agreeing:
a. To make no further claim under this policy;
b. Not to seek renewal of this policy;
c. Not to apply for any flood insurance under the
Act for property at the described location; and
d. Not to seek a premium refund for current or prior
terms.
If the policy term ends before the insured building
has been flooded continuously for 90 days, the
provisions of this paragraph T.1. will apply when the
insured building suffers a covered loss before the
policy term ends.
2. If your insured building is subject to continuous lake
flooding from a closed basin lake, you may elect to file
a claim under either paragraph T.1. above or
paragraph T.2. (A "closed basin lake" is a natural lake
from which water leaves primarily through evaporation
and whose surface area now exceeds or has exceeded
1 square mile at any time in the recorded past. Most of
the nation's closed basin lakes are in the western half
of the United States, where annual evaporation
exceeds annual precipitation and where lake levels and
surface areas are subject to considerable fluctuation
due to wide variations in the climate. These lakes may
overtop their basins on rare occasions.) Under this
paragraph T.2. we will pay your claim as if the building
is a total loss even though it has not been continuously
inundated for 90 days, subject to the following
conditions:
a. Lake flood waters must damage or imminently
threaten to damage your building.
b. Before approval of your claim, you must:
(1) Agree to a claim payment that reflects your
buying back the salvage on a negotiated
basis; and
(2) Grant the conservation easement described in
FEMA's "Policy Guidance for Closed Basin
Lakes," to be recorded in the office of the local
recorder of deeds. FEMA, in consultation with
the community in which the property is
located, will identify on a map an area or
areas of special consideration (ASC) in which
there is a potential for flood damage from
continuous lake flooding. FEMA will give the
community the agreed-upon map showing the
ASC. This easement will only apply to that
portion of the property in the ASC. It will allow
certain agricultural and recreational uses of
the land. The only structures that it will allow
on any portion of the property within the ASC
are certain simple agricultural and recreational
structures. If any of these allowable structures
are insurable buildings under the NFIP and
are insured under the NFIP, they will not be
eligible for the benefits of this paragraph T.2.
If a U.S. Army Corps of Engineers certified
flood control project or otherwise certified
flood control project later protects the
property, FEMA will, upon request, amend the
ASC to remove areas protected by those
projects. The restrictions of the easement will
then no longer apply to any portion of the
property removed from the ASC; and
(3) Comply with paragraphs T.1.a. through T.1.d.
above.
c. Within 90 days of approval of your claim, you must
move your building to a new location outside the
ASC. FEMA will give you an additional 30 days to
move if you show that there is sufficient reason to
extend the time.
d. Before the final payment of your claim, you must
acquire an elevation certificate and a floodplain
development permit from the local floodplain
administrator for the new location of your building.
e. Before the approval of your claim, the community
having jurisdiction over your building must:
(1) Adopt a permanent land use ordinance, or a
temporary moratorium for a period not to
exceed 6 months to be followed immediately
by a permanent land use ordinance, that is
consistent with the provisions specified in the
easement required in paragraph T.2.b. above.
(2) Agree to declare and report any violations of
this ordinance to FEMA so that under Section
1316 of the National Flood Insurance Act of
1968, as amended, flood insurance to the
building can be denied; and
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(3) Agree to maintain as deed-restricted, for
purposes compatible with open space or
agricultural or recreational use only, any
affected property the community acquires an
interest in. These deed restrictions must be
consistent with the provisions of paragraph
T.2.b. above, except that, even if a certified
project protects the property, the land use
restrictions continue to apply if the property
was acquired under the Hazard Mitigation
Grant Program or the Flood Mitigation
Assistance Program. If a nonprofit land trust
organization receives the property as a
donation, that organization must maintain the
property as deed-restricted, consistent with
the provisions of paragraph T.2.b. above.
f. Before the approval of your claim, the affected
State must take all action set forth in FEMA's
"Policy Guidance for Closed Basin Lakes."
g. You must have NFIP flood insurance coverage
continuously in effect from a date established by
FEMA until you file a claim under paragraph T.2. If
a subsequent owner buys NFIP insurance that
goes into effect within 60 days of the date of
transfer of title, any gap in coverage during that
60-day period will not be a violation of this
continuous coverage requirement. For the purpose
of honoring a claim under this paragraph T.2., we
will not consider to be in effect any increased
coverage that became effective after the date
established by FEMA. The exception to this is any
increased coverage in the amount suggested by
your insurer as an inflation adjustment.
h. This paragraph T.2. will be in effect for a
community when the FEMA Regional Director for
the affected region provides to the community, in
writing, the following:
(1) Confirmation that the community and the
State are in compliance with the conditions in
paragraphs T.2.e. and T.2.f. above; and
(2) The date by which you must have flood
insurance in effect.
U. Duplicate Policies Not Allowed
1. We will not insure your property under more than one
NFIP policy.
If we find that the duplication was not knowingly
created, we will give you written notice. The notice will
advise you that you may choose one of several
options under the following procedures:
a. If you choose to keep in effect the policy with the
earlier effective date, you may also choose to
add the coverage limits of the later policy to the
limits of the earlier policy. The change will
become effective as of the effective date of the
later policy.
b. If you choose to keep in effect the policy with the
later effective date, you may also choose to add
the coverage limits of the earlier policy to the
limits of the later policy. The change will be
effective as of the effective date of the later
policy.
In either case, you must pay the pro rata premium for
the increased coverage limits within 30 days of the
written notice. In no event will the resulting coverage
limits exceed the permissible limits of coverage under
the Act or your insurable interest, whichever is less.
We will make a refund to you, according to applicable
NFIP rules, of the premium for the policy not being
kept in effect.
2. Your option under Condition U. Duplicate Policies Not
Allowed to elect which NFIP policy to keep in effect
does not apply when duplicates have been knowingly
created. Losses occurring under such circumstances
will be adjusted according to the terms and conditions
of the earlier policy. The policy with the later
effective date will be canceled.
V. Loss Settlement
1. Introduction
This policy provides three methods of settling losses:
Replacement Cost, Special Loss Settlement, and
Actual Cash Value. Each method is used for a
different type of property, as explained in a.-c. below.
a. Replacement Cost loss settlement, described in
V.2. below, applies to a single-family dwelling
provided:
(1) It is your principal residence, which means
that, at the time of loss, you or your spouse
lived there for at least 80 percent of:
(a) The 365 days immediately preceding
the loss; or
(b) The period of your ownership, if you
owned the dwelling for less than 365
days; and
(2) At the time of loss, the amount of insurance
in this policy that applies to the dwelling is
80 percent or more of its full replacement
cost immediately before the loss, or is the
maximum amount of insurance available
under the NFIP.
b. Special loss settlement, described in V.3. below,
applies to a single-family dwelling that is a
manufactured or mobile home or a travel trailer.
c. Actual Cash Value loss settlement applies to a
single-family dwelling not subject to replacement
cost or special loss settlement, and to the
property listed in V.4. below.
Page 17 of 19
2. Replacement Cost Loss Settlement
The following loss settlement conditions apply to a
single-family dwelling described in V.1.a. above:
a. We will pay to repair or replace the damaged
dwelling after application of the deductible and
without deduction for depreciation, but not more
than the least of the following amounts:
(1) The building limit of liability shown on your
Declarations Page;
(2) The replacement cost of that part of the
dwelling damaged, with materials of like
kind and quality, and for like use; or
(3) The necessary amount actually spent to
repair or replace the damaged part of the
dwelling for like use.
b. If the dwelling is rebuilt at a new location, the
cost described above is limited to the cost that
would have been incurred if the dwelling had
been rebuilt at its former location.
c. When the full cost of repair or replacement is
more than $1,000 or more than 5 percent of the
whole amount of insurance that applies to the
dwelling, we will not be liable for any loss under
V.2.a. above or V.4.a.(2) below unless and until
actual repair or replacement is completed.
d. You may disregard the replacement cost
conditions above and make claim under this
policy for loss to dwellings on an actual cash
value basis. You may then make claim for any
additional liability according to V.2.a., b., and c.
above, provided you notify us of your intent to do
so within 180 days after the date of loss.
e. If the community in which your dwelling is
located has been converted from the Emergency
Program to the Regular Program during the
current policy term, then we will consider the
maximum amount of available NFIP insurance to
be the amount that was available at the
beginning of the current policy term.
3. Special Loss Settlement
a. The following loss settlement conditions apply to
a single-family dwelling that:
(1) Is a manufactured or mobile home or a travel
trailer, as defined in II.B.6.b. and II.B.6.c.;
(2) Is at least 16 feet wide when fully assembled
and has an area of at least 600 square feet
within its perimeter walls when fully
assembled; and
(3) Is your principal residence, as specified in
V.1.a.(1) above.
b. If such a dwelling is totally destroyed or
damaged to such an extent that, in our judgment,
it is not economically feasible to repair, at least to
its predamage condition, we will, at our
discretion, pay the least of the following amounts:
(1) The lesser of the replacement cost of the
dwelling or 1.5 times the actual cash
value, or
(2) The building limit of liability shown on your
Declarations Page.
c. If such a dwelling is partially damaged and, in
our judgment, it is economically feasible to repair
it to its predamage condition, we will settle the
loss according to the Replacement Cost
conditions in paragraph V.2. above.
4. Actual Cash Value Loss Settlement
The types of property noted below are subject to
actual cash value [or in the case of V.4.a.(2) below,
proportional] loss settlement.
a. A dwelling, at the time of loss, when the amount
of insurance on the dwelling is both less than 80
percent of its full replacement cost immediately
before the loss and less than the maximum
amount of insurance available under the NFIP.
In that case, we will pay the greater of the
following amounts, but not more than the amount
of insurance that applies to that dwelling:
(1) The actual cash value, as defined in II.B.2.,
of the damaged part of the dwelling; or
(2) A proportion of the cost to repair or replace
the damaged part of the dwelling, without
deduction for physical depreciation and after
application of the deductible.
This proportion is determined as follows: If
80 percent of the full replacement cost of the
dwelling is less than the maximum amount
of insurance available under the NFIP, then
the proportion is determined by dividing the
actual amount of insurance on the dwelling
by the amount of insurance that represents
80 percent of its full replacement cost. But if
80 percent of the full replacement cost of the
dwelling is greater than the maximum
amount of insurance available under the
NFIP, then the proportion is determined by
dividing the actual amount of insurance on
the dwelling by the maximum amount of
insurance available under the NFIP.
b. A two-, three-, or four-family dwelling.
c. A unit that is not used exclusively for singlefamily
dwelling purposes.

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