National Flood Insurance Program

Residential Condominium 

Building Association Policy

Standard Flood Insurance Policy

F-144 / October 2015

SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 1 OF 24

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 

programcommunity. 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 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 that we use in 

this policy:

1. Act. The National Flood Insurance Act of 1968 and any 

amendments to it.

2. Actual Cash Value. The cost to replace an insured item 

of property at the time of loss, less the value of its 

physical depreciation.

3. Application. The statement made and signed by you or 

your agent in applying for this policy. The application 

gives information we use to determine the eligibility of the 

risk, the kind of policy to be issued, and the correct 

premium payment. The application is part of this flood 

insurance policy. For us to issue you a policy, the correct 

premium payment must accompany the application.

4. Base Flood. A flood having a one percent chance of 

being equaled or exceeded in any given year.

5. Basement. Any area of the building, including any 

sunken room or sunken portion of a room, having its floor 

below ground level (subgrade) on all sides.
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 2 OF 24

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.

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.
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 3 OF 24

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 loadbearing 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, 
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 4 OF 24

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.). 

 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;
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 5 OF 24

(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:
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 6 OF 24

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. 

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.

 R easonable 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 
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 7 OF 24

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 
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 8 OF 24

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 relating to improvements.

e. This coverage will also pay to bring a flooddamaged structure into compliance with State or 

local floodplain management laws or ordinances 

even if the structure had received a variance before 

the present loss from the applicable floodplain 

management requirements. 

4. Conditions

a. When a structure covered under 

Coverage A—Building Property 

sustains a loss caused by a 

flood, our payment for the loss 

under this Coverage D will be 

for the increased cost to elevate, floodproof, relocate, or 

demolish (or any combination 

of these activities) caused by 

the enforcement of current 

State or local floodplain management ordinances or laws. 

Our payment for eligible demolition activities will be for the 

cost to demolish and clear the 

site of the building debris or 

a portion thereof caused by 

the enforcement of current 

State or local floodplain management ordinances or laws. 

Eligible activities for the cost 

of clearing the site will include 

those necessary to discontinue 

utility service to the site and 

ensure proper abandonment of 

on-site utilities.

b. When the building is repaired 

or rebuilt, it must be intended 

for the same occupancy as 
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 9 OF 24

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. 
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 10 OF 24

l. Assessments made by a condominium association on 

individual condominium unit 

owners to pay increased costs 

of repairing commonly owned 

buildings after a flood in compliance with State or local 

floodplain management ordinances or laws.

6. Other Provisions

a. Increased Cost of Compliance coverage will not be 

included in the calculation to determine whether 

coverage meets the 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 selfpropelled 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 
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 11 OF 24

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 Improvement 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 
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 12 OF 24

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:

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.
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 13 OF 24

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
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 14 OF 24

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).

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 other wise 

eligible for coverage under 

the NFIP.
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 15 OF 24

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 enough to buy 

the requested amount of 

coverage, we will send 

you and any mortgagee or 
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 16 OF 24

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 
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 17 OF 24

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 1 year 

after the date on which the payment of the renewal 

premium was due, of nonreceipt of a renewal notice 

before the due date for the renewal premium, and we 

determine that the circumstances in the preceding 

paragraph apply, we will mail a second bill providing 

a revised due date, which will be 30 days after the 

date on which the bill is mailed.

b. If we do not receive the premium requested in the 

second bill by the revised due date, then we will not 

renew the policy. In that case, the policy will remain 

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 
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 18 OF 24

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

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 cond o -
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 19 OF 24

minium, 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 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, 
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 20 OF 24

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:
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 21 OF 24

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 agreedupon 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 deedrestricted, 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 
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 22 OF 24

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. 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 
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 23 OF 24

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 a 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 predamaged 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, awnings, 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
SFIP RESIDENTIAL CONDOMINIUM BUILDING ASSOCIATION POLICY FORM PAGE 24 OF 24

(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. 

IN WITNESS WHEREOF, we have signed this policy below and hereby enter into this Insurance Agreement.

Roy E. Wright

Deputy Associate Administrator

FEMA’s Federal Insurance and Mitigation Administration
CLAIM GUIDELINES IN CASE OF A FLOOD

If you have questions, consult your insurance agent or call the National Flood Insurance Program (NFIP) 

toll-free at 1-800-638-6620 or on the TDD line at 1-800-447-9487.

Know your insurance representative’s name and telephone number. List them here for fast reference:

Insurance Agent 

Agent’s Phone Number 

•	Notify us or your agent, in writing, as soon as possible after the flood.

•	Your claim will be assigned to an NFIP certified adjuster. 

•	Identify the claims adjuster assigned to your claim and contact him or her if you have not been 

contacted within 24 hours after you reported the claim to your insurance representative. 

•	As soon as possible, separate damaged property from undamaged property so that damage can be 

inspected and evaluated.

•	To help the claims adjuster, take photographs of the outside of the premises showing the flooding 

and the damage and photographs of the inside of the premises showing the height of the water and 

the damaged property.

•	Place all account books, financial records, receipts, and other loss verification material in a safe 

place for examination and evaluation by the claims adjuster.

•	Work cooperatively with the claims adjuster to promptly determine and document all claim items. 

Be prepared to advise the claims adjuster of the cause and responsible party(ies) if the flooding 

resulted from other than natural cause.

•	Make sure that the claims adjuster fully explains, and that you fully understand, all allowances and 

procedures for processing claim payments. This policy requires you to send us a signed and swornto, detailed proof of loss within 60 days after the loss.

•	Any and all coverage problems and claim allowance restrictions must be communicated directly 

from the NFIP. Claims adjusters are not authorized to approve or deny claims; their job is to report 

to the NFIP on the elements of flood cause and damage.

At our option, we may accept an 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 to your insured property. 

F-144 (OCT. 2015)