[Code of Federal Regulations]

[Title 44, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 44CFR61.17]



[Page 273-316]

 

              TITLE 44--EMERGENCY MANAGEMENT AND ASSISTANCE

 

 CHAPTER I--FEDERAL EMERGENCY MANAGEMENT AGENCY, DEPARTMENT OF HOMELAND 

                                SECURITY

 

PART 61_INSURANCE COVERAGE AND RATES--Table of Contents

 

Sec. 61.17  Group Flood Insurance Policy.



    (a) A Group Flood Insurance Policy (GFIP) is a policy covering all 

individuals named by a State as recipients under section 408 of the 

Stafford Act (42 U.S.C. 5174) of an Individuals and Households Program 

(IHP) award for flood damage as a result of major disaster declaration 

by the President.

    (b) The premium for the GFIP is a flat fee of $600 per insured. We 

may adjust the premium to reflect NFIP loss experience and any 

adjustment of benefits under the IHP program.

    (c) The amount of coverage is equivalent to the maximum grant amount 

established under section 408 of the Stafford Act (42 U.S.C. 5174).

    (d) The term of the GFIP is for 36 months and begins 60 days after 

the date of the disaster declaration.

    (e) Coverage for individual grantees begins on the thirtieth day 

after the NFIP receives the required data for individual grantees and 

their premium payments.

    (f) We will send a Certificate of Flood Insurance to each individual 

insured under the GFIP.

    (g) The GFIP is the Standard Flood Insurance Policy Dwelling Form (a 

copy of which is included in Appendix A(1) of this part), except that:

    (1) VI. DEDUCTIBLES does not apply to the GFIP. A special deductible 

of $200 (applicable separately to any building loss and any contents 

loss) applies to insured flood-damage losses sustained by the insured 

property in the course of any subsequent flooding event during the term 

of the GFIP. The deductible does not apply to:

    (i) III.C.2. Loss Avoidance Measures; or

    (ii) III. C.3. Condominium Loss Assessments coverage.

    (2) VII. GENERAL CONDITIONS, E. Cancellation of Policy by You, does 

not apply to the GFIP.

    (3) VII. GENERAL CONDITIONS, H. Policy Renewal, does not apply to 

the GFIP.

    (h) We will send a notice to the GFIP certificate holders 

approximately 60 days before the end of the thirty-six month term of the 

GFIP. The notice will encourage them to contact a local insurance agent 

or producer or a private insurance company selling NFIP policies under 

the Write Your Own program of the NFIP Standard Flood Insurance Policy, 

and advise them as to the amount of coverage they must maintain in order 

not to jeopardize their eligibility for future disaster assistance. The 

IHP program will provide the NFIP the amount of flood insurance coverage 

to be maintained by certificate holders.



[65 FR 60769, Oct. 12, 2000, as amended at 67 FR 61462, Sept. 30, 2002]



[[Page 274]]



                        Appendix A(1) to Part 61



  Federal Emergency Management Agency, Federal Insurance Administration



                     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 of 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.

    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 (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 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



[[Page 275]]



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 surface 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.

    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 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 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% 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



[[Page 276]]



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 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



[[Page 277]]



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.

    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% 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% 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 semi-precious 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 that is on or 

in insured property and debris of insured property 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 only applies 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 

building; or

    (b) A legally authorized official must issue an evacuation order or 

other civil order for the community in which the 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.

    Reasonable expenses include the value of work, at the Federal 

minimum wage, 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



[[Page 278]]



placed in a fully enclosed building or otherwise reasonably protected 

from the elements.

    Any property removed, including a moveable home described in 

II.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% 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. Non-residential 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% 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% 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



[[Page 279]]



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 flood-damaged 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 flood-damaged 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 flood-damaged 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.

    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 

two years.

    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 the insured has 

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.



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    a. Increased Cost of Compliance coverage will not be included in the 

calculation to determine whether coverage meets the 80% 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 the policy apply.



                        IV. Property Not Covered



    We do not cover any of the following:

    1. Personal property not inside a 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 

Definitions section (see 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 self-propelled 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;

    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% of 

the actual cash value of the building 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 pay 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 we describe in 

Coverage D--Increased Cost of Compliance; or

    7. Any other economic loss you suffer.

    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;



[[Page 281]]



    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;

    (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 water-borne 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 the 

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 conspires to 

do to deliberately cause loss by flood; 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. Pair and Set Clause



    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, 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 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 you are entitled to for lost, 

damaged, or



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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 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 the 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. Non-Renewal 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 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 of 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



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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 one year after 

the date on which the payment of the renewal premium was due, of non-

receipt 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;

    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 insured 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;



[[Page 284]]



    (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 that 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 the 

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 property insured under this policy 

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.



[[Page 285]]



    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 non-renewal.

    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 one 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 covered 

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 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 an 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 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 one 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 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.



[[Page 286]]



    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 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

    (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 non-profit 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 must 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 80% 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% or more of its full replacement cost 

immediately before the loss, or is



[[Page 287]]



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.



                   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% 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 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 pre-damage 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 pre-damage condition, we 

will settle the loss according to the Replacement Cost conditions in 

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% 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% 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% of its full replacement cost. But if 80% 

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 single-family dwelling 

purposes.

    d. Detached garages.

    e. Personal property.

    f. Appliances, carpets, and carpet pads.

    g. Outdoor awnings, outdoor antennas or aerials of any type, and 

other outdoor equipment.



[[Page 288]]



    h. Any property covered under this policy that is abandoned after a 

loss and remains as debris anywhere on the described location.

    i. A dwelling that is not your principal residence.



                     5. Amount of Insurance Required



    To determine the amount of insurance required for a dwelling 

immediately before the loss, we do not include the value of:

    a. Footings, foundations, piers, or any other structures or devices 

that are below the undersurface of the lowest basement floor and support 

all or part of the dwelling;

    b. Those supports listed in V.5.a. above, that are below the surface 

of the ground inside the foundation walls if there is no basement; and

    c. Excavations and underground flues, pipes, wiring, and drains.



    Note: The Coverage D--Increased Cost of Compliance limit of 

liability is not included in the determination of the amount of 

insurance required.



                       VIII. Liberalization Clause



    If we make a change that broadens your coverage under this edition 

of our policy, but does not require any additional premium, then that 

change will automatically apply to your insurance as of the date we 

implement the change, provided that this implementation date falls 

within 60 days before or during the policy term stated on the 

Declarations Page.



                          IX. What Law Governs



    This policy and all disputes arising from the handling of any claim 

under the policy are governed exclusively by the flood insurance 

regulations issued by FEMA, the National Flood Insurance Act of 1968, as 

amended (42 U.S.C. 4001, et seq.), and Federal common law.

    In Witness Whereof, we have signed this policy below and hereby 

enter into this Insurance Agreement.

                                                          Jo Ann Howard,

                        Administrator, Federal Insurance Administration.



[65 FR 60769, Oct. 12, 2000, as amended at 68 FR 9897, Mar. 3, 2003]



                        Appendix A(2) to Part 61



  Federal Emergency Management Agency, Federal Insurance Administration



                     Standard Flood Insurance Policy



                          GENERAL PROPERTY FORM



    Please read the policy carefully. The flood insurance coverage 

provided is subject to limitations, restrictions, and exclusions.

    This policy provides no coverage:

    1. In a regular program community, for a residential condominium 

building, as defined in this policy; and

    2. Except for personal property coverage, for a 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.

    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. 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 (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. The 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 which 

result in a flood as defined in A.1.a. above.

    B. The following are the other key definitions 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



[[Page 289]]



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, formed by 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 or 

personal property is 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. 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.

    14. 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.

    15. 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.

    16. 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.

    17. Improvements. Fixtures, alterations, installations, or additions 

comprising a part of the insured building.

    18. 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.

    19. 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.

    20. 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 building, which you specifically described in the 

application, may be insured under this policy.

    21. Pollutants. Substances that include, but that 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.

    22. 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.

    23. Probation Premium. A flat charge you must pay on each new or 

renewal policy issued covering property in a community that has been 

placed on probation under the provisions of 44 CFR 59.24.

    24. 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



[[Page 290]]



full limits of coverage are available under the Act.

    25. Residential Condominium Building. A building, owned and 

administered as a condominium, containing one or more family units and 

in which at least 75% of the floor area is residential.

    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, V.

    27. Stock means merchandise held in storage or for sale, raw 

materials, and in-process or finished goods, including supplies used in 

their packing or shipping.

    Stock does not include any property not covered under Section IV. 

Property Not

    Covered, except the following:

    a. Parts and equipment for self-propelled vehicles;

    b. Furnishings and equipment for watercraft;

    c. Spas and hot-tubs, including their equipment; and

    d. Swimming pool equipment.

    28. Unit. A unit in a condominium building.

    29. 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 building described on the Declarations Page at the described 

location. If the building is a condominium building and the named 

insured is the condominium association, Coverage A includes all units 

within the building and the improvements within the units, provided the 

units are owned in common by all unit owners.

    2. We also insure building property for a period of 45 days at 

another location, as set forth in III.C.2.b., Property Removed to 

Safety.

    3. Additions and extensions attached to and in contact with the 

building 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 load-bearing wall are always considered part of the building and 

cannot be separately insured.

    4. The following fixtures, machinery, and equipment, which are 

covered under Coverage A only:

    a. Awnings and canopies;

    b. Blinds;

    c. Carpet permanently installed over unfinished flooring;

    d. Central air conditioners;

    e. Elevator equipment;

    f. Fire extinguishing apparatus;

    g. Fire sprinkler systems;

    h. Walk-in freezers;

    i. Furnaces;

    j. Light fixtures;

    k. Outdoor antennas and aerials attached to buildings;

    l. Permanently installed cupboards, bookcases, paneling, and 

wallpaper;

    m. Pumps and machinery for operating pumps;

    n. Ventilating equipment; and

    o. Wall mirrors, permanently installed;

    p. In the units within the building, installed:

    (1) Built-in dishwashers;

    (2) Built-in microwave ovens;

    (3) Garbage disposal units;

    (4) Hot water heaters, including solar water heaters;

    (5) Kitchen cabinets;

    (6) Plumbing fixtures;

    (7) Radiators;

    (8) Ranges;

    (9) Refrigerators; and

    (10) Stoves.

    5. Materials and supplies to be used for construction, alteration, 

or repair of the insured building while the materials and supplies are 

stored in a fully enclosed building at the described location or on an 

adjacent property.

    6. 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. 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.



[[Page 291]]



    7. 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 unless it has been continuously insured by the NFIP at the 

same described location since September 30, 1982.

    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, 

subject to B. 2., 3., and 4. below, against direct physical loss by or 

from flood to personal property inside the fully enclosed insured 

building:

    a. Owned solely by you, or in the case of a condominium, owned 

solely by the condominium association and used exclusively in the 

conduct of the business affairs of the condominium association; or

    b. Owned in common by the unit owners of the condominium 

association.

    We also insure such personal property for 45 days while stored at a 

temporary location, as set forth in III.C.2.b., Property Removed to 

Safety.

    2. When this policy covers personal property, coverage will be 

either for household personal property or other than household personal 

property, while within the insured building, but not both.

    a. If this policy covers household personal property, it will insure 

household personal property usual to a living quarters, that:

    (1) Belongs to you, or a member of your household, or at your 

option:

    (a) Your domestic worker;

    (b) Your guest; or

    (2) You may be legally liable for.

    b. If this policy covers other than household personal property, it 

will insure your:

    (1) Furniture and fixtures;

    (2) Machinery and equipment;

    (3) Stock; and

    (4) Other personal property owned by you and used in your business, 

subject to IV. Property Not Covered.

    3. Coverage for personal property includes the following property, 

subject to B.1.a. and B.1.b. above, which is covered under Coverage B. 

only:

    a. Air conditioning units installed in the building;

    b. Carpet, 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 the food in any freezer;

    g. Outdoor equipment and furniture stored inside the insured 

building;

    h. Ovens and the like; and

    i. Portable microwave ovens and portable dishwashers.

    4. 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 292]]



    5. Special Limits. We will pay no more than $2,500 for any 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 semi-precious stones, articles of 

gold, silver, or platinum;

    d. Furs or any article containing fur which represents its principal 

value; or

    6. We will pay only for the functional value of antiques.

    7. If you are a tenant, you may apply up to 10% of the Coverage B 

limit to improvements:

    a. Made a part of the building you occupy; and

    b. You acquired, or made at your expense, even though you cannot 

legally remove.

    This coverage does not increase the amount of insurance that applies 

to insured personal property.

    8. If you are a condominium unit owner, you may apply up to 10% of 

the Coverage B limit to cover loss to interior:

    a. walls,

    b. floors, and

    c. ceilings,

that are not covered under a policy issued to the condominium 

association insuring the condominium building.

    This coverage does not increase the amount of insurance that applies 

to insured personal property.

    9. If you are a tenant, personal property must be inside the fully 

enclosed building.



                     C. Coverage C--Other Coverages



    1. Debris Removal.

    a. We will pay the expense to remove non-owned debris that is on or 

in insured property and debris of insured property 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 the 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; and

    (b) The value of work, at the Federal minimum wage, that you 

perform.

    (2) This coverage for Sandbags, Supplies, and Labor only applies 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.

    Reasonable expenses include the value of work, at the Federal 

minimum wage, that you perform.

    (2) If you 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, 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.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. Pollution Damage.

    We will pay for damage caused by pollutants to covered property if 

the discharge, seepage, migration, release, or escape of the pollutants 

is caused by or results from flood. The most we will pay under this 

coverage is $10,000. This coverage does not increase the Coverage A or 

Coverage B limits of liability. Any payment under this provision when 

combined with all other payments for the same loss cannot exceed the 

replacement cost or actual cash value, as appropriate, of the covered 

property. This coverage does not include the testing for or monitoring 

of pollutants unless required by law or ordinance.



               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:



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elevation, floodproofing, relocation, or demolition (or any combination 

of these activities) of your structure. Eligible floodproofing 

activities are limited to:

    a. Non-residential 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 2 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% 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% 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 flood-damaged 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 flood-damaged 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 flood-damaged 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.

    5. Exclusions.



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    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 

two years.

    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 the insured has 

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.

    All other conditions and provisions of the policy apply.



                        IV. Property Not Covered



    A. 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 the 

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 self-propelled vehicles or machines, 

provided they are not licensed for use on public roads and 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;

    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;

    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% 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 of 1990 and amendments to these Acts;



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    16. Personal property owned by or in the care, custody or control of 

a unit owner, except for property of the type and under the 

circumstances set forth under III. Coverage B--Personal Property of this 

policy;

    17. A residential condominium building located in a Regular Program 

community.



                              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 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 you suffer.

    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 areas; 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 A.1.c. and II.A.2.).

    D. We do not insure for direct physical loss caused directly or 

indirectly by:

    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 insured building; or

    b. That is within your control including, but not limited to:

    (1) Design, structural, or mechanical defects;

    (2) Failures, stoppages, 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 water-borne 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 the 

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 situated on the described location;

    8. Theft, fire, explosion, wind, or windstorm;

    9. Anything that you or your agents 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.



                             VI. Deductibles



    A. When a loss is covered under this policy, we will pay only that 

part of the loss that exceeds the applicable 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. No deductible applies to:

    1. III.C.2. Loss Avoidance Measures; or

    2. III.D. Increased Cost of Compliance.



                         VII. General Conditions



                         A. Pair and Set Clause



    In case of loss to an article that is part of a pair or set, we will 

have the option of paying you:



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    1. An amount equal to the cost of replacing the lost, damaged, or 

destroyed article, less depreciation, or

    2. An amount which 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, 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 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 re-enter 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. 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. Where this policy covers a condominium association and there is a 

flood insurance policy in the name of a unit owner that covers the same 

loss as this policy, then this policy will be primary.



                   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 can 

constitute 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. Non-Renewal 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 that 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 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



[[Page 297]]



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 of 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. above 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 one 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 as 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 re-certify, on a Recertification Questionnaire 

that 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;

    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 insured property during the 

term of the policy;

    f. Specifications of damaged buildings and detailed repair 

estimates;



[[Page 298]]



    g. Names of mortgagees or anyone else having a lien, charge, or 

claim against the insured property;

    h. Details about who occupied any insured building at the time of 

loss and for what purpose; and

    i. The inventory of damaged 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 sixty 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, 

and rules and regulations; 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;

    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 that 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 such 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 damaged or undamaged insured property to us.



                               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 of the damaged 

property so as to determine the amount of loss, 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



[[Page 299]]



state where the insured property is located. The appraisers will 

separately state the actual cash value 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.

    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 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 non-renewal.

    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 one year of 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 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 an 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 as 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 this 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 one 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



[[Page 300]]



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 Sec. 1316 of the National Flood Insurance Act of 

1968, as amended, flood insurance to the building can be denied; and

    (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 non-profit 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 this 

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. Property may not be insured 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.



[[Page 301]]



    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 this 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 must be 

canceled.



                           V. Loss Settlement



    We will pay the least of the following amounts after application of 

the deductible:

    1. The applicable amount of insurance under this policy;

    2. The actual cash value; or

    3. The amount it would cost to repair or replace the property with 

material of like kind and quality within a reasonable time after the 

loss.



                       VIII. Liberalization Clause



    If we make a change that broadens your coverage under this edition 

of our policy, but does not require any additional premium, then that 

change will automatically apply to your insurance as of the date we 

implement the change, provided that this implementation date falls 

within 60 days before or during the policy term stated on the 

Declarations Page.



                          IX. What Law Governs



    This policy and all disputes arising from the handling of any claim 

under the policy are governed exclusively by the flood insurance 

regulations issued by FEMA, the National Flood Insurance Act of 1968, as 

amended (42 U.S.C. 4001, et seq.), and Federal common law.

    In Witness Whereof, we have signed this policy below and hereby 

enter into this Insurance Agreement.

                                                          Jo Ann Howard,

                        Administrator, Federal Insurance Administration.



[65 FR 60778, Oct. 12, 2000, as amended at 68 FR 9897, Mar. 3, 2003]



                        Appendix A(3) to Part 61



  Federal Emergency Management Agency Federal Insurance Administration



                     Standard Flood Insurance Policy



           RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY



                              I. Agreement



    Please read the policy carefully. The flood insurance provided is 

subject to limitations, restrictions, and exclusions.

    This policy covers only a residential condominium building in a 

regular program community. If the community reverts to emergency program 

status during the policy term and remains as an emergency program 

community at time of renewal, this policy cannot be renewed.

    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.

    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. 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 (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



[[Page 302]]



waves or currents of water exceeding anticipated cyclical levels which 

result in a flood as defined in A.1.a above.

    B. The following are the other key definitions 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, formed by 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 or 

personal property is 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. 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.

    14. 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.

    15. 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.

    16. 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.

    17. Improvements. Fixtures, alterations, installations, or additions 

comprising a part of the residential condominium building, including 

improvements in the units.

    18. 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.

    19. 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.

    20. 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 building, which you specifically described in the 

application, may be insured under this policy.

    21. 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 303]]



    22. 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.

    23. 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.

    24. 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.

    25. Residential Condominium Building. A building, owned and 

administered as a condominium, containing one or more family units and 

in which at least 75% of the floor area is residential.

    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 in a residential 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 residential condominium building described on the 

Declarations Page at the described location, including all units within 

the building and the improvements within the units.

    2. We also insure such building property for a period of 45 days at 

another location, as set forth in III.C.2.b., Property Removed to 

Safety.

    3. Additions and extensions attached to and in contact with the 

building 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 load-bearing wall are always considered part of the building and 

cannot be separately insured.

    4. The following fixtures, machinery and equipment, including its 

units, which are covered under Coverage A only:

    a. Awnings and canopies;

    b. Blinds;

    c. Carpet permanently installed over unfinished flooring;

    d. Central air conditioners;

    e. Elevator equipment;

    f. Fire extinguishing apparatus;

    g. Fire sprinkler systems;

    h. Walk-in freezers;

    i. Furnaces;

    j. Light fixtures;

    k. Outdoor antennas and aerials fastened to buildings;

    l. Permanently installed cupboards, bookcases, paneling, and 

wallpaper;

    m. Pumps and machinery for operating pumps;

    n. Ventilating equipment;

    o. Wall mirrors, permanently installed; and

    p. In the units within the building, installed:

    (1) Built-in dishwashers;

    (2) Built-in microwave ovens;

    (3) Garbage disposal units;

    (4) Hot water heaters, including solar water heaters;

    (5) Kitchen cabinets;

    (6) Plumbing fixtures;

    (7) Radiators;

    (8) Ranges;

    (9) Refrigerators; and

    (10) Stoves.

    5. Materials and supplies to be used for construction, alteration or 

repair of the insured building while the materials and supplies are 

stored in a fully enclosed building at the described location or on an 

adjacent property.

    6. 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, A1-30, AR, AR/

AE, AR/AH, AR/A1-30, AR/A, AR/AO; or

    (2) Below the base flood elevation adjusted to include the effect of 

wave action in Zones VE or V1-30.

    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.

    7. A manufactured home or a travel trailer as described in the 

Definitions Section (See II.B.b. and c.).



[[Page 304]]



    If the manufactured home 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 unless it has been continuously insured by the NFIP at the 

same described location since September 30, 1982.

    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, 

subject to B.2. and B.3. below, against direct physical loss by or from 

flood to personal property that is inside the fully enclosed insured 

building and is:

    a. Owned by the unit owners of the condominium association in 

common, meaning property in which each unit owner has an undivided 

ownership interest; or

    b. Owned solely by the condominium association and used exclusively 

in the conduct of the business affairs of the condominium association.

    We also insure such personal property for 45 days while stored at a 

temporary location, as set forth in III.C.2.b., Property Removed to 

Safety.

    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. Carpet, 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 the food in any freezer;

    g. Outdoor equipment and furniture stored inside the insured 

building;

    h. Ovens and the like; and

    i. 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.

    4. 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 semi-precious stones, or articles 

of gold, silver, or platinum;

    d. Furs or any article containing fur which represents its principal 

value.

    5. 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 that is on or 

in insured property and debris of insured property 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.



[[Page 305]]



    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 the 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; and

    (b) The value of work, at the Federal minimum wage, that you 

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.

    Reasonable expenses include the value of work, at the Federal 

minimum wage, that you 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.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.



               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. Non-residential 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 2 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% 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% 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.



[[Page 306]]



    (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 flood-damaged 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 flood-damaged 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 relating to improvements.

    e. This coverage will also pay to bring a flood-damaged 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.

    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 

two years.

    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 the insured has 

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.



[[Page 307]]



    a. Increased Cost of Compliance coverage will not be included in the 

calculation to determine whether coverage meets the coinsurance 

requirement for replacement cost coverage under VIII. 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:

    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 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 

Definitions Section (see 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 self-propelled vehicles or machines, provided 

they are not licensed for use on public roads and 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;

    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;

    10. Containers, including related equipment, such as, but not 

limited to, tanks containing gases or liquids;

    11. Buildings and all their contents if more than 49% of the actual 

cash value of the building 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 

Improvements Act of 1990 and amendments to these Acts;

    16. Personal property used in connection with any incidental 

commercial occupancy or use of the building.



                              V. Exclusions



    A. We only pay 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 areas; 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:

    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:



[[Page 308]]



    a. Substantially confined to the insured building; or

    b. That is within your control including, but not limited to:

    (1) Design, structural, or mechanical defects;

    (2) Failures, stoppages, 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 water-borne 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 insured property;

unless there is a flood in the area and the flood is the proximate cause 

of the sewer, drain, or sump pump discharge or overflow, or the 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 situated on the described location;

    8. Theft, fire, explosion, wind, or windstorm;

    9. Anything you or your agents 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 the applicable deductible amount, subject 

to the limit of insurance 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. No deductible applies to:

    1. III.C.2. Loss Avoidance Measures; or

    2. III.D. Increased Cost of Compliance.



                            VII. Coinsurance



    A. This Coinsurance Section applies only to coverage on the 

building.

    B. We will impose a penalty on loss payment unless the amount of 

insurance applicable to the damaged building is:

    1. At least 80% of its replacement cost; or

    2. The maximum amount of insurance available for that building under 

the NFIP, whichever is less.

    C. If the actual amount of insurance on the building is less than 

the required amount in accordance with the terms of VII. B. above, then 

loss payment is determined as follows (subject to all other relevant 

conditions in this policy, including those pertaining to valuation, 

adjustment, settlement, and payment of loss):

    1. Divide the actual amount of insurance carried on the building by 

the required amount of insurance.

    2. Multiply the amount of loss, before application of the 

deductible, by the figure determined in C.1. above.

    3. Subtract the deductible from the figure determined in C.2. above.

    We will pay the amount determined in C.3. above, or the amount of 

insurance carried, whichever is less. The amount of insurance carried, 

if in excess of the applicable maximum amount of insurance available 

under the NFIP, is reduced accordingly.



                                Examples



                Example 1 (Inadequate Insurance)



Replacement value of the building--$250,000

Required amount of insurance--$200,000

 (80% of replacement value of $250,000)

Actual amount of insurance carried--$180,000

Amount of the loss--$150,000

Deductible--$500

Step 1:180,000 / 200,000 = .90

 (90% of what should be carried.)

Step 2: 150,000 x .90 = 135,000

Step 3: 135,000 - 500 = 134,500



    We will pay no more than $134,500. The remaining $15,500 is not 

covered due to the coinsurance penalty ($15,000) and application of the 

deductible ($500).



                 Example 2 (Adequate Insurance)



Replacement value of the building--$500,000

Required amount of insurance--$400,000

 (80% of replacement value of $500,000)

Actual amount of insurance carried--$400,000

Amount of the loss--$200,000

Deductible--$500



    In this example there is no coinsurance penalty, because the actual 

amount of insurance carried meets the required amount. We will pay no 

more than $199,500 ($200,000 amount of loss minus the $500 deductible).



[[Page 309]]



    D. In calculating the full replacement cost of a building:

    1. The replacement cost value of any covered building property will 

be included;

    2. The replacement cost value of any building property not covered 

under this policy will not be included; and

    3. Only the replacement cost value of improvements installed by the 

condominium association will be included.



                        VIII. General Conditions



    A. Pair and Set Clause.

    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, less depreciation; or

    2. An amount which 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, 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 re-enter the program during the policy term and before the loss 

occurred; or

    b. If the property listed on the application is not otherwise 

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 a flood insurance policy in the name of a unit owner 

that covers the same loss as this policy, then this policy will be 

primary.

    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. Non-Renewal 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. 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 the amount that 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



[[Page 310]]



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 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 of 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 above 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 one 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 as 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 re-certify, on a Recertification Questionnaire 

that we will provide 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 personal property showing the 

quantity, description, actual cash value, and amount of loss. Attach all 

bills, receipts and related documents;

    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;



[[Page 311]]



    d. Details of any other insurance that may cover the loss;

    e. Changes in title or occupancy of the insured property during the 

term of the policy;

    f. Specifications of damaged insured buildings and detailed repair 

estimates;

    g. Names of mortgagees or anyone else having a lien, charge, or 

claim against the insured 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 sixty 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 that 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, 

and rules and regulations; 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 make reasonably 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 

VIII. P.

    2. If we reject your proof of loss in whole or in part you may:

    a. Accept such 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 damaged or undamaged insured property to us.

    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 the damaged property so as to determine 

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



[[Page 312]]



made by a judge of a court of record in the state where the insured 

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 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 non-renewal.

    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 one year of 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 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 an 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 as long as 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 this 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 one 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:



[[Page 313]]



    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 contained 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 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 Sec. 1316 of the National Flood Insurance Act of 

1968, as amended, flood insurance to the building can be denied; and

    (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 non-profit 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 this 

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



[[Page 314]]



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. The insured's option under this 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 must 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 buildings other than manufactured homes or travel trailers.

    b. Special Loss Settlement described in V.3. below applies to a 

residential condominium building that is a travel trailer or a 

manufactured home.

    c. Actual Cash Value loss settlement applies to all other property 

covered under this policy, as outlined in V.4. below.



                   2. Replacement Cost Loss Settlement



    a. We will pay to repair or replace a damaged or destroyed building, 

after application of the deductible and without deduction for 

depreciation, but not more than the least of the following amounts:

    (1) The amount of insurance in this policy that applies to the 

building;

    (2) The replacement cost of that part of the building damaged, with 

materials of like kind and quality, and for like occupancy and use; or

    (3) The necessary amount actually spent to repair or replace the 

damaged part of the building for like occupancy and use.

    b. We will not be liable for any loss on a Replacement Cost Coverage 

basis unless and until actual repair or replacement of the damaged 

building or parts thereof, is completed.

    c. If a building is rebuilt at a location other than the described 

location, we will pay no more than it would have cost to repair or 

rebuild at the described location, subject to all other terms of 

Replacement Cost Loss Settlement.



                       3. Special Loss Settlement



    a. The following loss settlement conditions apply to a residential 

condominium building that is: (1) a manufactured home or travel trailer, 

as defined in II.B.6.b. and c., and (2) at least 16 feet wide when fully 

assembled and has at least 600 square feet within its perimeter walls 

when fully assembled.

    b. If such a building is totally destroyed or damaged to such an 

extent that, in our judgment, it is not economically feasible to repair, 

at least to its pre-damaged condition, we will, at our discretion, pay 

the least of the following amounts:

    (1) The lesser of the replacement cost of the manufactured home or 

travel trailer or 1.5 times the actual cash value; or

    (2) The Building Limit of liability shown on your Declarations Page.

    c. If such a manufactured home or travel trailer is partially 

damaged and, in our judgment, it is economically feasible to repair it 

to its pre-damaged condition, we will settle the loss according to the 

Replacement Cost Loss Settlement conditions in V.2. above.



                  4. Actual Cash Value Loss Settlement



    a. The types of property noted below are subject to actual cash 

value loss settlement:

    (1) Personal property;

    (2) Insured property abandoned after a loss and that remains as 

debris at the described location;

    (3) Outside antennas and aerials, awning, and other outdoor 

equipment;

    (4) Carpeting and pads;

    (5) Appliances; and

    (6) A manufactured home or mobile home or a travel trailer as 

defined in II.B.6.b. or c. that does not meet the conditions for special 

loss settlement in V.3. above.

    b. We will pay the least of the following amounts:

    (1) The applicable amount of insurance under this policy;

    (2) The actual cash value (as defined in II.B.2.); or

    (3) The amount it would cost to repair or replace the property with 

material of like kind and quality within a reasonable time after the 

loss.



                        IX. Liberalization Clause



    If we make a change that broadens your coverage under this edition 

of our policy, but does not require any additional premium, then that 

change will automatically apply to your insurance as of the date we 

implement the change, provided that this implementation date falls 

within 60 days before or during the policy term stated on the 

Declarations Page.



                           X. What Law Governs



    This policy and all disputes arising from the handling of any claim 

under the policy are governed exclusively by the flood insurance 

regulations issued by FEMA, the National Flood Insurance Act of 1968, as 

amended (42 U.S.C. 4001, et seq.), and Federal common law.



[[Page 315]]



    In Witness Whereof, we have signed this policy below and hereby 

enter into this Insurance Agreement.

                                                          Jo Ann Howard,

                        Administrator, Federal Insurance Administration.



[65 FR 60785, Oct. 12, 2000, as amended at 68 FR 9897, Mar. 3, 2003]



                        Appendix A(4) to Part 61



  Federal Emergency Management Agency, Federal Insurance Administration



      Standard Flood Insurance Policy Endorsement to Dwelling Form



    This endorsement replaces the provisions of VII.B.4 and VII.H.2, and 

also adds a new paragraph, VII.H.5. This endorsement applies in Monroe 

County and the Village of Islamorada, Florida, This endorsement also 

applies to communities within Monroe County, Florida that incorporate on 

or after January 1, 1999, agree to participate in the inspection 

procedure, and become eligible for the sale of flood insurance.

    VII.B.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 re-enter the program during the policy term and before the loss 

occurred.

    b. If you have not submitted a community inspection report, referred 

to in ``H. Policy Renewal'' below, that was required in a notice sent to 

you in conjunction with the community inspection procedure established 

under 44 CFR 59.30.

    c. If the property listed on the application is not otherwise 

eligible for coverage under the NFIP

    VII.H.2. We must receive the payment of the appropriate renewal 

premium and when applicable, the community inspection report referred to 

in H.5 below within 30 days of the expiration date.

    VII.H.5. Your community has been approved by the Federal Emergency 

Management Agency to participate in an inspection procedure set forth in 

National Flood Insurance Program Regulations (44 CFR 59.30). During the 

several years that this inspection procedure will be in place, you may 

be required to obtain and submit an inspection report from your 

community certifying whether or not your insured property is in 

compliance with the community's floodplain management ordinance before 

you can renew your policy. You will be notified in writing of this 

requirement approximately 6 months before a renewal date and again at 

the time your renewal bill is sent.



[65 FR 60793, Oct. 12, 2000, as amended at 67 FR 10634, Mar. 8, 2002]



                        Appendix A(5) to Part 61



  Federal Emergency Management Agency, Federal Insurance Administration



  Standard Flood Insurance Policy Endorsement to General Property Form



    This endorsement replaces the provisions of VII.B.4 and VII.H.2, and 

also adds a new paragraph, VII.H.5. This endorsement applies in Monroe 

County and the Village of Islamorada, Florida. This endorsement also 

applies to communities within Monroe County, Florida that incorporate on 

or after January 1, 1999, agree to participate in the inspection 

procedure, and become eligible for the sale of flood insurance.

    VII.B.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 re-enter the program during the policy term and before the loss 

occurred.

    b. If you have not submitted a community inspection report, referred 

to in ``H. Policy Renewal'' below, that was required in a notice sent to 

you in conjunction with the community inspection procedure established 

under 44 CFR 59.30.

    c. If the property listed on the application is not otherwise 

eligible for coverage under the NFIP

    VII.H.2. We must receive the payment of the appropriate renewal 

premium and when applicable, the community inspection report referred to 

in H.5 below within 30 days of the expiration date.

    VII.H.5. Your community has been approved by the Federal Emergency 

Management Agency to participate in an inspection procedure set forth in 

National Flood Insurance Program Regulations (44 CFR 59.30). During the 

several years that this inspection procedure will be in place, you may 

be required to obtain and submit an inspection report from your 

community certifying whether or not your insured property is in 

compliance with the community's floodplain management ordinance before 

you can renew your policy. You will be notified in writing of this 

requirement approximately 6 months before a renewal date and again at 

the time your renewal bill is sent.



[65 FR 60793, Oct. 12, 2000, as amended at 67 FR 10634, Mar. 8, 2002]



[[Page 316]]



                        Appendix A(6) to Part 61



  Federal Emergency Management Agency, Federal Insurance Administration



 Standard Flood Insurance Policy Endorsement to Residential Condominium 

                       Building Association Policy



    This endorsement replaces the provisions of VIII.B.4 and VIII.H.2, 

and also adds a new paragraph, VIII.H.5. This endorsement applies in 

Monroe County and the Village of Islamorada, Florida. This endorsement 

also applies to communities within Monroe County, Florida and 

incorporate on or after January 1, 1999, agree to participate in the 

inspection procedure, and become eligible for the sale of flood 

insurance.

    VIII.B.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 re-enter the program during the policy term and before the loss 

occurred.

    b. If you have not submitted a community inspection report, referred 

to in ``H. Policy Renewal'' below, that was required in a notice sent to 

you in conjunction with the community inspection procedure established 

under 44 CFR 59.30.

    c. If the property listed on the application is not otherwise 

eligible for coverage under the NFIP

    VIII.H.2. We must receive the payment of the appropriate renewal 

premium and when applicable, the community inspection report referred to 

in H.5 below within 30 days of the expiration date.

    VIII.H.5. Your community has been approved by the Federal Emergency 

Management Agency to participate in an inspection procedure set forth in 

National Flood Insurance Program Regulations (44 CFR 59.30). During the 

several years that this inspection procedure will be in place, you may 

be required to obtain and submit an inspection report from your 

community certifying whether or not your insured property is in 

compliance with the community's floodplain management ordinance before 

you can renew your policy. You will be notified in writing of this 

requirement approximately 6 months before a renewal date and again at 

the time your renewal bill is sent.



[65 FR 60794, Oct. 12, 2000, as amended at 67 FR 10634, Mar. 8, 2002]