Cancellation Qualifying Reasons: Difference between revisions

Latest revision as of 12:55, 12 February 2025

The NFIP relies on a structured system of qualifying reasons ("Reason Codes") to ensure policy cancellations are handled consistently and transparently. These codes categorize the allowable reasons for canceling or nullifying a policy, such as when there is no longer an insurable interest, duplicate coverage exists, or a property becomes ineligible for coverage.

Each qualifying reason outlines specific conditions, documentation requirements, and refund eligibility.

Equinox outlines all qualifying reasons shown below as part of the Cancellation Request process.

Qualifying Reasons by Category

Each of the reasons shown below are organized by category and NFIP code.
Click on the Code Number to find more details about each qualifying reason.

Category	Code	Description
No Insurable Interest	RC 01	Building sold, removed, or destroyed
	RC 02	Contents sold, removed, or destroyed
	RC 07	Property closing did not occur
Establish a Common Expiration Date	RC 03	Policy canceled and rewritten to establish a common expiration date with other insurance coverage for the same building
Duplicate Coverage	RC 04	Duplicate NFIP policies
	RC 10	Condominium unit or association policy converting to RCBAP
	RC 26	Duplicate policy from a source other than NFIP
Not Eligible for Coverage	RC 06	Property not eligible for coverage at time of application
	RC 27	Property becomes ineligible for coverage during policy term
	RC 29	Building physically altered and no longer eligible for NFIP coverage
Lender No Longer Requires Insurance	RC 28	Insurance no longer required by lender
Invalid Payment or Fraud	RC 05	Invalid payment
	RC 23	Fraud or misrepresentation
	RC 30	Insufficient premium to retain coverage
Other Reason Codes	RC 13	Nullification prior to policy effective date
	RC 20	SRL written with incorrect insurer
	RC 21	Continuous lake flooding or closed basin lakes
	RC 22	Cancel and rewrite due to administrative error

This page contains details about NFIP Cancellations.
Find more in the How To Cancel section of the NFIP Flood Insurance Manual.

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-{{draft}}{{nfip}}
+{{info-nfip-sfip}}
-The NFIP relies on a structured system of cancellation reason codes to ensure policy cancellations are handled consistently and transparently. These codes categorize the allowable reasons for canceling or nullifying a policy, such as when there is no longer an insurable interest, duplicate coverage exists, or a property becomes ineligible for coverage. Each code outlines specific conditions, documentation requirements, and refund eligibility. Understanding and correctly applying these codes is crucial for agents to ensure compliance with NFIP guidelines and avoid processing delays.
+The [[NFIP]] relies on a structured system of '''qualifying reasons''' ("Reason Codes") to ensure policy cancellations are handled consistently and transparently. These codes categorize the allowable reasons for canceling or nullifying a policy, such as when there is no longer an insurable interest, duplicate coverage exists, or a property becomes ineligible for coverage.
-The codes are grouped into categories based on common scenarios, such as "No Insurable Interest," "Duplicate Coverage," and "Lender No Longer Requires Insurance." Each category addresses unique circumstances, with clear rules for refunding premiums and handling associated fees. For example, full refunds may apply when a property is sold, while pro-rata refunds are issued for mid-term cancellations due to eligibility changes. Agents must carefully review the details of each code to determine the appropriate action, required documentation, and refund terms. This system ensures cancellations are processed fairly while maintaining the integrity of NFIP policies.
+Each qualifying reason outlines specific conditions, documentation requirements, and refund eligibility.
-== Cancellation Reason Codes by Category ==
+[[Equinox]] outlines all qualifying reasons shown below as part of the [[Submit_NFIP_Cancellation_Request|Cancellation Request]] process.
-=== A. No Insurable Interest ===
+== Qualifying Reasons by Category==
-# '''Code 01''' – Building sold, removed, or destroyed.
+Each of the reasons shown below are organized by category and NFIP code. <br>
-# '''Code 02''' – Contents sold, removed, or destroyed.
+Click on the Code Number to find more details about each qualifying reason.
-# '''Code 07''' – Property closing did not occur.
+{| class="wikitable"
+|-
+! Category !! Code !! Description
+|-
+| rowspan="3" | No Insurable Interest
+| '''[[/RC 01|RC&nbsp;01]]''' || Building sold, removed, or destroyed
+|-
+| '''[[/RC 02|RC&nbsp;02]]''' || Contents sold, removed, or destroyed
+|-
+| '''[[/RC 07|RC&nbsp;07]]''' || Property closing did not occur
+|-
+| Establish a Common Expiration Date
+| '''[[/RC 03|RC&nbsp;03]]''' || Policy canceled and rewritten to establish a common expiration date with other insurance coverage for the same building
+|-
+| rowspan="3" | Duplicate Coverage
+| '''[[/RC 04|RC&nbsp;04]]''' || Duplicate NFIP policies
+|-
+| '''[[/RC 10|RC&nbsp;10]]''' || Condominium unit or association policy converting to RCBAP
+|-
+| '''[[/RC 26|RC&nbsp;26]]''' || Duplicate policy from a source other than NFIP
+|-
+| rowspan="3" | Not Eligible for Coverage
+| '''[[/RC 06|RC&nbsp;06]]''' || Property not eligible for coverage at time of application
+|-
+| '''[[/RC 27|RC&nbsp;27]]''' || Property becomes ineligible for coverage during policy term
+|-
+| '''[[/RC 29|RC&nbsp;29]]''' || Building physically altered and no longer eligible for NFIP coverage
+|-
+| Lender No Longer Requires Insurance
+| '''[[/RC 28|RC&nbsp;28]]''' || Insurance no longer required by lender
+|-
+| rowspan="3" | Invalid Payment or Fraud
+| '''[[/RC 05|RC&nbsp;05]]''' || Invalid payment
+|-
+| '''[[/RC 23|RC&nbsp;23]]''' || Fraud or misrepresentation
+|-
+| '''[[/RC 30|RC&nbsp;30]]''' || Insufficient premium to retain coverage
+|-
+| rowspan="4" | Other Reason Codes
+| '''[[/RC 13|RC&nbsp;13]]''' || Nullification prior to policy effective date
+|-
+| '''[[/RC 20|RC&nbsp;20]]''' || SRL written with incorrect insurer
+|-
+| '''[[/RC 21|RC&nbsp;21]]''' || Continuous lake flooding or closed basin lakes
+|-
+| '''[[/RC 22|RC&nbsp;22]]''' || Cancel and rewrite due to administrative error
+|}
-=== B. Establish a Common Expiration Date ===
+{{line-nfip-cxl}}
-# '''Code 03''' – Policy canceled and rewritten to establish a common expiration date with other insurance coverage for the same building.
-=== C. Duplicate Coverage ===
-# '''Code 04''' – Duplicate NFIP policies.
-# '''Code 10''' – Condominium unit or association policy converting to RCBAP.
-# '''Code 26''' – Duplicate policy from a source other than NFIP.
-=== D. Not Eligible for Coverage ===
-# '''Code 06''' – Property not eligible for coverage at time of application.
-# '''Code 27''' – Property becomes ineligible for coverage during policy term.
-# '''Code 29''' – Building physically altered and no longer eligible for NFIP coverage.
-=== E. Lender No Longer Requires Insurance ===
-# '''Code 28''' – Insurance no longer required by lender.
-=== F. Invalid Payment or Fraud ===
-# '''Code 05''' – Invalid payment.
-# '''Code 23''' – Fraud or misrepresentation.
-# '''Code 30''' – Insufficient premium to retain coverage.
-=== G. Other Reason Codes ===
-# '''Code 13''' – Nullification prior to policy effective date.
-# '''Code 20''' – SRL written with incorrect insurer.
-# '''Code 21''' – Continuous lake flooding or closed basin lakes.
-# '''Code 22''' – Cancel and rewrite due to administrative error.