NFIP Coverage Changes

Policy Guide

Standard Flood Insurance Policy

Applications

Equinox Procedure
Waiting Periods : Occupancy Foundations : Discounts

New Business

Elevation Certificates
Primary Residence
BRCV : Venting : Condos

Renewals

Equinox Procedure
Billing Changes

Changes

Equinox Procedures
Mortgagee : Insured
Transfer of Ownership
Coverage Limits

Cancellations

Equinox Procedure
Request Forms : Signatures
Reasons : Documents

National Flood Insurance Program (NFIP) policies provide flexibility for agents and policyholders to adjust coverage limits during the policy term under certain conditions.

This page outlines the fundamental concepts of NFIP coverage changes, the rules governing them, and how agents can guide policyholders through this process.

NFIP Coverage Limits

1. Building Coverage: Protects the structure of the insured property, with maximum limits set by NFIP guidelines.
2. Contents Coverage: Covers personal belongings and business property within the insured building.
3. Separate Policies for Structures: Coverage for a primary building and any detached buildings requires separate NFIP policies.

Coverage limits are defined by policy type (residential, non-residential, or condominium) and are subject to federal maximums.

Reasons for Adjusting NFIP Coverage

Adjustments to coverage limits during a policy term can occur for a variety of reasons, including:

• Changing Insurance Needs: The insured acquires significant new personal property or improves their building.
• Compliance with Loan Requirements: Lenders may require higher coverage limits to meet federal flood insurance mandates.
• Coverage Reduction Requests: The insured may need to lower coverage for financial reasons, provided it meets minimum NFIP standards.
• Correction of Errors: Mistakes in original policy coverage limits must be corrected promptly.

Submit a Change to Coverage in Equinox

Rules for Changing Coverage

NFIP allows coverage adjustments within specific parameters:

Increasing Coverage

• Must occur within the same policy term.
• The policyholder must pay additional premium for the increased coverage.
• Coverage increases can only take effect once the premium is paid and the request is processed.
• Increases may require documentation (e.g., proof of property improvements or updated lender requirements).

Decreasing Coverage

• Policyholders may request a decrease in coverage, but limits cannot fall below federally mandated minimums.
• Decreases typically require written consent from the policyholder and lender (if applicable).
• Refunds for overpayment due to reduced coverage are subject to NFIP rules.

Mid-Term Endorsements

• Coverage changes are processed through a mid-term endorsement.
• Changes are effective based on the endorsement issuance date, not retroactively.

Agent Responsibilities

As an agent, your role is to facilitate these changes accurately and in compliance with NFIP regulations:

• Educate Policyholders: Explain coverage options and implications of changes to ensure informed decisions.
• Verify Documentation: Ensure all necessary documents (e.g., elevation certificates, lender requirements) are collected and submitted.
• Process Requests Timely: Submit requests for coverage changes promptly to avoid lapses or delays.
• Communicate with Lenders: Coordinate with mortgage lenders when changes involve compliance with loan conditions.

Common Scenarios for Coverage Changes

1. Home Renovations: A homeowner adds an extension, increasing the value of the property. Coverage limits are adjusted upward to reflect the change.
2. Lender Requests: A lender reviews the policy and identifies a gap in required building coverage. The policyholder agrees to an increase.
3. Downsizing Coverage: A property owner sells high-value contents and requests a decrease in contents coverage.

FAQs on NFIP Coverage Changes

Question	Answer
How quickly can coverage changes take effect?	Coverage changes take effect upon endorsement issuance and premium payment.
Can a policyholder cancel their policy instead of reducing coverage?	Yes, but cancellations must meet specific NFIP criteria and may involve refunds based on unused coverage.
Are there fees for adjusting coverage mid-term?	Adjustments may incur administrative fees, which vary by insurance provider.

Helpful Resources for Agents

• NFIP Coverage Limits Overview
• Mid-Term Endorsement Procedures
• Training materials on processing NFIP coverage changes through the policy system.

Conclusion

NFIP coverage changes provide policyholders with the flexibility to adapt their flood insurance to meet evolving needs. As an agent, understanding these adjustments ensures policyholders are adequately protected and in compliance with federal and lender requirements.

This page contains details about NFIP Policy Changes. Find more NFIP information in the How To Endorse section of the Flood Insurance Manual.