Flood Services - Glossary of Terms
Common term for a geographic area that has at least a 1% annual chance of flooding.
The term "100-year floodplain" can be misleading. It is commonly (but mistakenly) assumed to be an area that floods only once every 100 years or so. The "100-year floodplain" is more accurately defined as an area subject to flooding, where the ground elevation is below the Base Flood Elevation (BFE), which means the area is subject to a flooding event which has a frequency of 1% each year. Thus, a 100-year flood could potentially occur in the same place more than once in a relatively short period of time.
Despite the possibility of misinterpretation, the phrase "100-year floodplain" is still commonly used to describe the Special Flood Hazard Areas (SFHAs) found on Flood Insurance Rate Maps (FIRMs). In fact, SFHAs were once regularly defined by map legends on older FIRMs as an area subject to a "100-year flood". Today SFHAs are no longer commonly defined in FEMA map legends as an area of "100-year flood" but instead as an area subject to a "1% annual chance flood". This 1% standard is used by most Federal and State agencies and by the National Flood Insurance Program (NFIP). A structure in an area with a 1% annual chance of flooding has at least a 26 percent chance of experiencing a flood during the term of a typical 30-year mortgage.
On older FIRMs, SFHAs are darkly shaded; newer aerial FIRMS depict SFHAs with a blue dot-matrix. On both maps SFHAs are labeled with zone designations that begin with "A" or "V". For federally-regulated lenders, insurable structure(s) acting as collateral for a loan located in an SFHA on a current FIRM must have flood insurance as a condition for making, extending, increasing, or renewing the loan. This is referred to as the mandatory purchase of flood insurance requirement.
Common term for an area that has between a 0.2% and 1% annual chance of flooding. Communities can elect to delineate these areas on their FIRMs. When shown on an older FIRM, these areas are lightly shaded in gray; newer aerial FIRMs depict these areas with a black dot-matrix. Recently-issued FIRMs will label these areas as "X"; older FIRMs will label them as "B". While the federal government does not require the mandatory purchase of flood insurance for a structure in these zones, the risk of flooding is still considered significant and the purchase of flood insurance is highly encouraged.
Actual Cash Value (ACV)
The cost to repair or replace an insured item of property at the time of the loss, less physical depreciation. The value of physical depreciation is based on the age and condition of the item. Regarding NFIP flood insurance policies, personal property coverage (i.e., contents coverage) is always paid at ACV.
Area where steep mountain drainages empty into valley floors, usually in arid regions. Floods in these areas often exhibit unpredictable characteristics compared to flooding in riverine or coastal areas, due to the potential for events that result in rapid terrain change (such as mudflow, landslides, falling rocks, and shifting sediments). Due to the unpredictable nature of flooding in alluvial fan regions, SFHAs on FIRMs for these regions tend to be much larger than one would normally expect given the amount and distribution of annual rainfall in these areas. In North America, the alluvial fan floodplains that are most commonly subject to development issues are in Western areas (including some suburban areas near Albuquerque, NM and Las Vegas, NV, among other places) because it is a rapidly urbanizing region and fans—with their relatively gentle terrain and views of the mountains—can seem to be appealing building sites.
Report made by a qualified appraiser, using pertinent market data to determine the fair and reasonable value of a specific property.
Assessor's Parcel Number (APN)
A unique number assigned to a property upon its initial tax assessment. Outside of tax assessment, APNs can be useful in eliminating confusion about the identification of a subject property. For example, a mortgage officer attempting to update a loan file after a community-wide address change can typically use an APN from the loan file to identify the new property address in community records. See also Parcel Number, PIN.
Association of State Floodplain Managers (ASFPM)
Book of maps covering a defined geographical area.
Base Flood Elevation (BFE)
Pertains to Zones AE, AH, A1-A30, AR, AR/A, AR/AE, AR/A1-A30, AR/AH, AR/AO, V1-V30, and VE only. The water level that would result from a Base Flood is usually expressed as a number of feet above sea level as established by a vertical elevation datum, such as NGVD 1929 or NAVD 1988. There is a 1% chance that flooding would meet or exceed the BFE in a specific location in a given year.
For flood insurance purposes, a "building" is defined as:
- A structure with two or more outside rigid walls and a fully secured roof, that is affixed to a permanent site; or
- A manufactured home (defined as a structure built on a permanent chassis, transported to its site in one or more sections, and affixed to a permanent foundation); or
- 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 above.
- Buildings in the course of construction may be eligible for NFIP flood coverage (and may be required to have flood coverage) under certain conditions.
Geographic divisions of counties as defined by the U.S. Bureau of the Census, and whose boundaries are designed to reflect significant shifts in demographic data from one portion of a community to another. To help lenders comply with the Home Mortgage Disclosure Act and the Community Reinvestment Act, census tract data is available with any of the CoreLogic flood determination products.
Coastal Barrier Resources System (CBRS)
A federally defined area established by the Coastal Barrier Resources Act of 1982, comprised of undeveloped coastal barriers along the Atlantic, Gulf, and Great Lakes coasts and administered primarily by the U.S. Department of Fish and Wildlife. The CBRS currently includes 585 defined areas, which comprise nearly 1.3 million acres of land and associated aquatic habitat. In the CBRS, land can be developed, but federal taxpayers do not underwrite the investments. NFIP flood insurance is unavailable for properties in the CBRS, as well as participation in any other federal program, subsidy, or security, if any structure acting as security for the loan is built after the date of the Act designating the CBRS area affecting the structure. CBRS areas are shown on appropriate FIRM panels, and if a structure acting as security for a loan is in a CBRS area, it should be noted on the SFHDF and the borrower should be notified of the CBRS status and any applicable restrictions.
Community Rating System (CRS)
A federal initiative that provides incentives for communities to go beyond the minimum floodplain management requirements by developing extra flood protection measures. Policyholders within these communities receive a percentage discount off of their annual premiums. (Visit CRS Resource Center)
Community Reinvestment Act (CRA)
A United States federal law enacted in 1977 that requires banks and thrifts to offer credit throughout their entire market area, including home ownership opportunities to underserved populations and commercial loans to small businesses. Among other provisions, the CRA requires these lending institutions to record census tract data for its loans, so they may reasonably know which neighborhoods are underserved and evaluate their loan portfolios accordingly. To help lenders comply with the Community Reinvestment Act, census tract data is available with any of the Corelogic flood determination products.
Community Status Book (CSB)
FEMA document that provides a listing of communities' NFIP participation status. The CSB is identified by federal regulators as the recommended source for community NFIP participation information for lenders to use when completing the SFHDF.
Form of ownership in which each unit is separately owned. Individual ownership is of the interior unit only. All condominium owners own joint title to the common areas though a condominium association. When the mandatory purchase of flood insurance requirement applies to a condo building, flood coverage is required for every unit in that building, regardless of the floor on which the unit resides. To satisfy the mandatory purchase requirement, flood coverage for a condominium can be purchased either as a Residential Condominium Building Association Policy ("RCBAP") purchased and maintained by the condo association, or in the form of a Dwelling Form Policy purchased by an owner for their unit.
Deed of Trust
Legal document that conveys title of real estate to a third party (trustee) who holds the title until the owner of the property has repaid the debt. In states where it is used, a Deed of Trust accomplishes essentially the same purpose as a regular mortgage. Also called a Trust Deed or Trust Indenture.
A version of the Standard Flood Insurance Policy (SFIP) issued to insure a building or condo unit and/or residential contents on a single family or a two- to four-family dwelling. See also General Property Form and Residential Condominium Building Association Policy.
Date on which a FIRM, FHBM, or LOMC has become effective for lender use. While community officials may begin disseminating and using new FEMA letters or map graphics while those FEMA documents are still at a preliminary stage (i.e., before the effective date is reached), lenders, insurers, and their third-party determination providers must wait until the corresponding effective date arrives before using those letters or map graphics as a basis for a flood zone determination.
A building that has no basement and has its lowest finished floor elevated above the ground level by foundation walls, shear walls, posts, piers, pilings, or columns. While elevating a building above the BFE using one of the above methods may be necessary to satisfy a local flood ordinance or to lower an insurance premium rate, elevating a building in an SFHA would not qualify the building for removal from the SFHA through the LOMA process, since in a base flood event the foundation walls, piers, etc. would still be exposed to floodwaters and can be undermined or otherwise damaged.
Houses built above the BFE on a bed of compacted fill dirt are not considered "elevated buildings" under this definition and may qualify for removal from the SFHA through a LOMR-F. Solid foundation perimeter walls are not an acceptable means of elevating buildings in V and VE zones.
A standardized NFIP-issued form used by surveyors and other professionals to make a certified statement that verifies a building's elevation and certain other construction characteristics. Elevation certificates serve three common purposes:
- To help an insurer rate a building for flood insurance
- To qualify a structure for a Letter of Map Amendment or Letter of Map Revision
- To satisfy community building ordinances and floodplain management standards, many of which are mandated as a condition of a community's participation in the NFIP, or encouraged by FEMA through the CRS.
Elevation certificates may not be used by lenders to waive the mandatory purchase of flood insurance requirement. However, elevation certificates are frequently used as the centerpiece of a LOMA/LOMR application. Once issued by FEMA and made effective for lender use, the resulting LOMA or LOMR may then be used to waive the mandatory purchase of flood insurance requirement as long as it removes the structure from the SFHA.
The phase of a community's participation in the National Flood Insurance Program in which a community adopts minimal regulations or ordinances regulate new construction in SFHAs. During this phase, FEMA arranges for a study of the community to determine base flood elevations and flood risk zones, and authorizes the sale of NFIP flood insurance in the community up to the following Emergency Program limits:
- Single Family - $35,000
- 2-4 Family - $35,000
- Other Residential - $100,000
- Non-Residential/Small Business - $100,000
- Residential - $10,000
- Non-Residential - $100,000
Once FEMA provides the community with a Flood Insurance Rate Map delineating base flood elevations and flood risk zones, the community is given six months to adopt base flood elevations in its local zoning and building code ordinances, and to meet other requirements. Once the community meets these requirements, FEMA converts the community to the Regular Program.
Once FEMA provides the community with a Flood Insurance Rate Map delineating base flood elevations and flood risk zones, the community is given six months to adopt base flood elevations in its local zoning and building code ordinances, and to meet other requirements. Once the community meets these requirements, FEMA converts the community to the Regular Program.
The collapse, undermining, or subsidence of land along the shore of a lake or other body of water. Erosion is a covered peril under an NFIP flood insurance policy, as long as it is caused by waves or currents of water exceeding their cyclical levels which result in flooding.
Federal Deposit Insurance Corporation (FDIC)
Federal agency that regulates State-chartered and insured nonmember banks and savings banks that are not part of the Federal Reserve System. The FDIC directly examines and supervises about 5,250 banks and savings banks, more than half of the institutions in the banking system.
Federal Disaster Assistance
Emergency help provided to communities and individuals by the federal government after a federally declared disaster. Disaster assistance to individuals is generally in the form of a family grant or loan that must be paid back by the recipient. In the event of a federally-declared disaster, property owners in a non-participating community will not be eligible for federal disaster assistance if the community's high flood risk areas have been identified for at least a year. When lending on secured improved real property in an SFHA in a non-participating community, lending institutions must notify the borrower of the unavailability of disaster assistance in the event of a disaster caused by a flood.
Federal Emergency Management Agency (FEMA)
The federal agency under which the National Flood Insurance Program is administered. In March 2003, FEMA became part of the newly created U.S. Department of Homeland Security. FEMA's mission is to reduce the loss of life and property and protect the nation from all hazards, including natural disasters, acts of terrorism, and other man-made disasters.
Federal Financial Institutions Examination Council (FFIEC)
A formal federal interagency body which prescribes uniform principles, standards, and report forms for the federal examination of financial institutions. The FFIEC provides the standards with which examinations are conducted by the Federal Reserve Board (FRB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the Office of Thrift Supervision (OTS). FFIEC examinations and procedures are also frequently incorporated into the regulations of government insurance programs not directly affiliated with FFIEC, such as the Farm Credit System Insurance Corporation (FCSIC).
The use of compacted dirt on a construction site to raise the level of the ground. Fill is usually performed to increase the elevation of a building foundation in order to reduce the likelihood that the building will flood. A building can be removed from an SFHA through a LOMR-F if the LOMR-F applicant can demonstrate that fill was used to elevate the entire building above the BFE (i.e., that the lowest adjacent grade of the building is at or above the BFE), and that the fill was placed and compacted according to community/NFIP standards.
According to FEMA, a flood is defined as:
- 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 adjacent properties (at least one of which is the policyholder's property) from:
Overflow of inland or tidal waters; or
Unusual and rapid accumulation or runoff of surface waters from any source; or
- 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 above.
Flood Disaster Protection Act of 1973 (FDPA)
The first Act of Congress to mandate the purchase of flood insurance, stating that federally regulated lending institutions could not make, increase, extend, or renew any loan secured by improved real property located in an SFHA in a participating community unless the secured building and any personal property securing the loan were covered for the life of the loan by a flood insurance policy.
Flood Hazard Boundary Map (FHBM)
A FEMA flood map that is based on approximate data and identifies, in general, the SFHAs within a community. An FBHM is typically used only in the NFIP's Emergency Program for floodplain management and flood insurance purposes. Once a community converts to the NFIP's Regular Program, a flood risk assessment is conducted in connection with the community's conversion and a new Flood Insurance Rate Map (FIRM) is usually issued, making the FHBM obsolete.
An insurance policy that covers property damage incurred from a flood. In the U.S., the term "flood insurance" is often used as shorthand for federally-backed NFIP flood insurance, since private flood insurance is very costly and typically only available for most homeowners as excess coverage for damages above NFIP policy limits, or for properties deemed uninsurable by the NFIP.
Flood Insurance Rate Map (FIRM)
A flood map issued in conjunction with a community's attempt to join the Regular Program of the NFIP. If a detailed assessment, termed a Flood Insurance Study (FIS), has been performed, the FIRM will show Base Flood Elevations (BFEs) and insurance risk zones in addition to floodplain boundaries. The FIRM may also show a delineation of the regulatory floodway and other useful mapping elements. FIRMs are used by insurers to determine zone ratings for flood insurance, by lenders as the basis for flood zone determinations and the mandatory purchase of flood insurance requirement, and by community officials for permitting and floodplain management purposes.
Flood Insurance Reform Act of 2004 (FIRA)
This act made several amendments to the Acts administering the NFIP, including (i) incorporating requirements for additional agent training for insurance agents selling flood insurance, (ii) requiring FEMA to disseminate more informational material to policyholders, and (iii) mitigating the impact of repetitive loss properties on NFIP total claims by creating the Severe Repetitive Loss Pilot Program.
Flood Insurance Study (FIS)
A FEMA report that summarizes the flood hazards within a given community. The FIS is the basis for floodplain management, flood mitigation, and insurance activities within a community and is also used to prepare the FIRM for that community.
Measures that reduce or eliminate the long-term risk of flood damage to buildings.
Flood Zone Determination
A document recording the flood zone status of a property address according to the graphics of the current applicable FEMA flood map for that property. Federally-regulated banks are required to perform a flood zone determination for every loan they make, increase, extend, or renew that is secured by improved real estate, and to record that determination on the Standard Flood Hazard Determination Form (SFHDF). If the lender's determination states that the improved real estate is located in a SFHA, flood insurance must be required as a condition of closing the loan as per federal regulations. Lenders are allowed to use third-party flood zone determination providers under the condition that that those providers guarantee their determinations.
The operation of an overall program of corrective and preventive measures for reducing flood damage, including but not limited to emergency preparedness plans, flood control systems, and floodplain development regulations. For a community to participate in the National Flood Insurance Program, it must adopt and enforce floodplain management regulations that meet or exceed minimum NFIP standards and requirements.
Any combination of structural and nonstructural additions, changes, or adjustments to structures, which reduce or eliminate risk of flood damage to real estate or improved real property, water and sanitation facilities, or structures with their contents. Under the NFIP, communities may allow the construction of commercial buildings that are floodproofed up to the BFE as an alternative to elevating the structure so that the lowest finished floor is at or above the BFE. However, just as with elevated buildings, floodproofing up to the BFE does not eliminate the mandatory purchase of flood insurance requirement.
River or stream channel (and sometimes adjacent floodplain areas) that must be kept free of obstruction to avoid substantial increases in the BFE for sites upstream, directly across, or downstream from the obstruction. When communities that participate in the NFIP have FIRMs, and floodways are designated on those FIRMs, those communities must not permit new construction in the designated floodway that results in any rise whatsoever in the BFE anywhere along the river or stream channel.
To recognize policyholders who have built in compliance with the FIRM or remained loyal customers of the NFIP by maintaining continuous coverage, FEMA allows for optional "Grandfathering" of the NFIP flood insurance rate. When a new FIRM goes into effect and updates the flood zone and/or BFE for a building, the grandfathered rate can be based upon a prior flood zone and/or BFE as shown on a historical FIRM, if:
- An NFIP policy was obtained prior to the effective date of a current FIRM, in which case the policyholder is eligible to maintain the prior flood zone and/or BFE as shown on the historical FIRM as long as continuous coverage has been maintained; or
- Even when continuous coverage has not been maintained, if the building was constructed in compliance with the FIRM in effect at the time of construction and has not since been substantially improved, the owner is eligible to obtain a policy using the flood zone and/or BFE from that FIRM provided that documented proof that the property meets the qualifying conditions is submitted to the insurance company.
A parcel of land with an improvement located on it. NFIP flood insurance is only available for improved properties, and can only cover the insurable building and/or contents for which the policy is written. Flood damage to actual land such as a loss of acreage due to erosion that is caused by a flood event is not covered under the NFIP.
Increased Cost of Compliance
Coverage under the SFIP for expenses a property owner must incur, above and beyond the cost to repair the physical damage the structure actually sustained from a flooding event, to comply with flood mitigation requirements of state or local floodplain management ordinances or laws. Acceptable mitigation measures are elevation, floodproofing, relocation, demolition, or any combination thereof.
Letter of Determination Review (LODR)
Letter issued by FEMA based on its review of property and structure location data and the current FEMA flood map for the property, to issue an official determination as to whether the structure is in or out of the SFHA on the flood map.
Letter of Map Amendment (LOMA)
Letter issued by FEMA that indicates that the portion of a current effective FEMA flood map has been determined to be incorrect and has been amended, based on its review of as-built construction data for one or more properties. A LOMA can only be issued by FEMA. On or after the effective date of the letter, the LOMA becomes the regulatory document with which lenders must determine whether the mandatory purchase of flood insurance requirement applies to a building affected by the LOMA. Once a LOMA goes into effect, it remains effective until rescinded or superseded by a subsequent FEMA map change or revision.
Letter of Map Change (LOMC)
Issued by FEMA, an LOMC results in a change of flood hazard status for some portion of a flood map. Examples of LOMCs include LOMAs, LOMRs, or LOMR-Fs.
Letter of Map Revision (LOMR)
Letter issued by FEMA based on its review of physical changes made to protect areas from flooding (e.g., channelization of a flood source, detention ponds) that indicates that a portion of a current effective FEMA flood map has been revised to reflect those physical changes. A LOMR can only be issued by FEMA. On or after the effective date of the letter, the LOMR becomes the regulatory document with which lenders must determine whether the mandatory purchase of flood insurance requirement applies to a building affected by the LOMR. Once a LOMR goes into effect, it remains effective until rescinded or superseded by a subsequent FEMA map change or revision.
Letter of Map Revision Based on Fill (LOMR-F)
Letter issued by FEMA based on its review of as-built construction data regarding improvements on a site that has been graded and filled in order to raise the level of the land above the BFE. A LOMR-F indicates that a portion of a current effective FEMA flood map has been revised to reflect that increase in elevation by fill. A LOMR-F can only be issued by FEMA. On or after the effective date of the letter, the LOMR-F becomes the regulatory document with which lenders must determine whether the mandatory purchase of flood insurance requirement applies to a building affected by the LOMR-F. Once a LOMR-F goes into effect, it remains effective until rescinded or superseded by a subsequent FEMA map change or revision.
Lowest Adjacent Grade (LAG)
The lowest measure of grade elevation immediately next to a building. The LAG is commonly found on an Elevation Certificate, and it is used by FEMA to determine if a building is eligible for a LOMC.
Mandatory Purchase of Flood Insurance Requirement
Under the provisions of the Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994, any entity that buys, builds, or improves property located in SFHAs within NFIP participating communities are to be required by any federally-regulated or federal agency lending institution to purchase flood insurance as a prerequisite for receiving any type of direct or indirect federal financial assistance (e.g., any loan, grant, guaranty, insurance, payment, subsidy, or federal disaster assistance) when the building or personal property is the subject of or security for such assistance.
Metropolitan Statistical Area (MSA)
Metropolitan Statistical Area numeric code, established by the US Office of Management and Budget, usually referring to an area containing a city with a population of at least 50,000 or an urbanized area with a population of 50,000 or more and a total metropolitan population of at least 100,000 (75,000 in New England). For HMDA reporting, the term "MSA" can also refer to a Primary Metropolitan Statistical Area (PMSA), which represents a major component of a larger metropolitan area with a population of more than one million. To help lenders comply with the HMDA, MSA data is available with any of the First American Flood Data Services flood determination products.
A current of liquid and flowing mud on the surfaces of normally dry land areas, as when earth is carried by a current of water. Other similar earth movements that do not involve currents of water, such as landslide, slope failure, or a saturated soil mass moving by liquidity down a slope, are not technically mudflows. Structural damage from mudflows are covered by NFIP flood insurance.
National Flood Determination Association (NFDA)
National Flood Insurance Program (NFIP)
The program of flood insurance coverage and floodplain management administered under the Act and applicable Federal regulations promulgated in Title 44 of the Code of Federal Regulations, Subchapter B.
National Flood Insurance Reform Act of 1994 (NFIRA)
This act resulted in major changes to the National Flood Insurance Program (NFIP). The law amended the Flood Disaster Protection Act of 1973, providing tools to make the NFIP more effective in achieving its goals of reducing the risk of flood damage to properties and reducing Federal expenditures for uninsured properties that are damaged by floods.
Community that is not participating in the NFIP. Non-participation may be the result of suspension, withdrawal or failure to join the program initially. Flood insurance is not available in non-participating communities and federal disaster assistance may be limited to its residents.
Non-Special Flood Hazard Area
Flood zone in which the flood risk has been determined and the mandatory purchase of flood insurance requirement does not apply. Includes Zones B, C, X, & X (500-year). See also Flood Zones.
Notice to Borrower
Official written disclosure that informs the borrower of a loan that a building securing the loan is within the SFHA. The Notice to Borrower form sets forth the terms of the mandatory purchase of flood insurance requirement on the loan and provides an acknowledgment that federal disaster assistance may or may not be available to the purchaser of the property, based upon the community's participation status in the NFIP. Providing the Notice to Borrower is a compliance requirement for lenders under federal regulations when a collateral structure for a loan is in the SFHA.
Otherwise Protected Areas (OPA)
The Coastal Barrier Improvement Act of 1990 created a new category of lands known as otherwise protected areas (OPAs). OPA designations add a layer of federal protection to coastal barriers already held for conservation or recreation, such as national wildlife refuges, national parks and seashores, state and county parks, and land owned by private groups for conservation or recreational purposes, and discourage development of privately owned land. The only federal funding prohibition within OPAs is for NFIP flood insurance. The CBRS currently includes 271 OPAs which add up to approximately 1.8 million acres of land and associated aquatic habitat.
Any official sequence of numeric and/or alphabetic characters that identify a specific lot. Also known as tax ID number, plat number, parcel identification number (PIN), or assessors parcel number (APN).
A community for which the FIA Administrator has authorized the sale of flood insurance under the NFIP. Under the terms of their agreement with the NFIP, participating communities must adopt and enforce comprehensive floodplain management ordinances to a minimum level proscribed by the NFIP in order to reduce future flood risks to new and existing construction in Special Flood Hazard Areas.
A building for which construction or substantial improvement occurred after December 31, 1974, or on or after the effective date of an initial Flood Insurance Rate Map (FIRM), whichever is later.
A building for which construction and all substantial improvements occurred on or before December 31, 1974, or before the effective date of an initial Flood Insurance Rate Map (FIRM).
Preferred Risk Policy (PRP)
A package policy offering nine coverage combinations for both building and contents at a fixed premium. It is available only to owners of single-family and 2-to-4-family residential buildings located in B, C, and X Zones on the effective date of the policy. The building must also meet several conditions relating to the complete flood loss history of the property. PRP rates cannot be grandfathered if a new flood map moves the SFHA so that it affects the building, but under certain conditions the homeowner may be able to obtain a SFIP with a B, C, or X rating under those conditions.
A method for placing flood coverage prior to the receipt of a FEMA Elevation Certificate. Provisional rating is only available for post-FIRM 1-4 family residential buildings in Zones AE, or A1-A30; provisional rating may also be available for a building in Zone A where the community provides a Base Flood Elevation (BFE) for the property. While provisionally-rated policies may remain in effect for up to one year, standard rating must be accomplished prior to any claim payment, should there be a loss. It is expected that an Elevation Certificate will be secured and standard rating completed within 60 days of the policy effective date; failure to obtain an Elevation Certificate could result in reduced coverage limits at the time of a loss.
Repetitive Loss Property
A structure, covered by a contract of flood insurance issued under the NFIP, that has suffered flood damage on two occasions during a 10-year period that ends on the date of the second loss, in which the cost to repair the flood damage, on average, equaled or exceeded 25 percent of the market value of the structure at the time of each flood loss. Qualifying a structure as a Repetitive Loss Property may allow the homeowner to take advantage of their ICC policy or federal grants and other assistance to mitigate future losses.
Replacement Cost Value (RCV)
The cost to repair or replace an insured item of property at the time of the loss without a deduction for physical depreciation. For NFIP flood insurance, RCV coverage is available when the insured property is the primary residence and the amount of coverage is equal to 80% or more of the replacement cost of the building.
Residential Condominium Building Association Policy (RCBAP)
A version of the Standard Flood Insurance Policy (SFIP) purchased by a condominium owner's association in order to insure a condominium building. Coverage includes both the portions of the building under common ownership and individually-owned units, and the premium is typically paid out of condominium dues. Loss settlement under the RCBAP is on a replacement cost basis, meaning that the RCBAP is not subject to a deduction for depreciation. However, it should be insured to full Replacement Cost Value (RCV), or up to the maximum available limits of $250,000 per unit times the number of units, whichever is less. Buildings that are not insured to at least 80% of their replacement cost, or the maximum amount of insurance available for that building under the NFIP, at the time of loss, would be subject to a co-insurance penalty. See also Dwelling Form and General Property Form.
Section of the National Flood Insurance Act of 1968, as amended, which states that no new flood insurance coverage shall be provided for any property that the FIA Administrator finds has been declared by a duly constituted state or local zoning authority or other authorized public body to be in violation of state or local laws, regulations, or ordinances that are intended to discourage or otherwise restrict land development or occupancy in flood-prone areas.
A graphic survey of a property parcel. Will usually show the dimensions of the lot as well as the relative location of any structures on the lot.
Special Flood Hazard Area (SFHA)
An area having at least a 1% annual chance of flood, mudflow, or flood-related erosion hazards, and shown on a FHBM or a FIRM 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. The mandatory purchase of flood insurance requirement applies to buildings located in SFHAs.
Standard Flood Hazard Determination Form (SFHDF)
Form designed by FEMA on which flood zone determinations for lender use are to be recorded in either printed, computerized, or electronic format as per federal regulations. A completed SFHDF is required in most loan files and is the primary product of most flood determination companies.
Standard Flood Insurance Policy (SFIP)
The standard NFIP flood insurance policy type. There are three forms of the SFIP: the Dwelling Form, the General Property Form, and the RCBAP. All three SFIP policy forms cover only one building and have a policy term of one year. Other non-standard NFIP flood insurance policy types include the PRP and MPPP.
An abnormal rise in sea level accompanying a hurricane or other intense storm, and whose height is the difference between the observed level of the sea surface and the level that would have occurred in the absence of the cyclone. Storm surge is usually estimated by subtracting the normal or astronomic high tide from the observed storm tide.
The sinking of land relative to sea level resulting from natural geological shifts or human activity, such as groundwater or natural gas extraction. Over time, subsidence may cause foundation damage to buildings or change the shape and size of flood-prone areas and their related SFHAs.
Scaled graphic representation of a single parcel showing its dimensions and the relative location of all structures on the property.
Unpublished NFIP rates used to issue policies for applications that fail to provide the NFIP with valid actuarial rating information.
Analysis of a borrower's credit and the property of a mortgage loan, comparing both to total risk and matching them to an interest rate and mortgage term.
Write Your Own (WYO) Program
A cooperative undertaking of the insurance industry and the FEMA Mitigation Division, which allows participating property and casualty insurance companies to write and service the Standard Flood Insurance Policy in their own names. The WYO Program operates within the context of the NFIP, and is subject to its rules and regulations.