Cancellation Qualifying Reasons/RC 03

Reason Code 03: Policy Canceled and Rewritten to Establish a Common Expiration Date

This reason code applies when a policy is canceled and rewritten to align its expiration date with other insurance coverage on the same building. This allows policyholders to maintain a consistent renewal schedule for all related policies.

Condition	Details
Eligibility for Cancellation	The policyholder requests cancellation to align the NFIP policy’s expiration date with another insurance policy covering the same building.
Effective Date of Cancellation	The effective date of the new flood insurance policy.
Policy Terms Eligible for Refund	The current policy term.
Type of Refund	Pro-rata refund, including ICC premium and Reserve Fund Assessment, but excluding the HFIAA Surcharge, Federal Policy Fee, and Probation Surcharge.
Required Documentation	A copy of the new NFIP policy declarations page and the other insurance policy declarations page showing the building address and effective dates.

This table can be seen on page 6-4 of the FIM.

Additional Guidance

• The new policy must be issued by the same insurer with the same (or higher) coverage amounts.
• The new policy must be issued before the cancellation of the existing policy to prevent coverage gaps.
• Coverage beyond the limits of the canceled policy is subject to a 30-day waiting period.

Required Documents

To process this cancellation reason, underwriters must verify the provided documentation.

• The NFIP declarations page for the new policy.
• The declarations page for the other insurance policy covering the same building.

Scenarios for Context

Scenario 1:
A commercial building owner has multiple insurance policies with different renewal dates. To streamline policy management, they have their insurance agent create a new NFIP policy 30 days prior to the effective date of their primary hazard coverage so that the effective dates match.

After the new policy became effective, the agent submitted a cancellation request signed by the owner, a copy of the new NFIP declarations page, and a copy of the hazard policy with the matching dates to cancel the existing NFIP policy.

Scenario 2:
A homeowner realizes that their flood insurance renews at a different time than their homeowners insurance. To simplify their renewal process, they talked to their insurance agent about ways to fix the effective date. After confirming with NFIP underwriters, the agent convinced the policyholder to purchase a new policy with a date that coincides with their homeowners policy; this would be used to cancel the existing NFIP policy.

The insured wanted to increase their coverage as well, so the new policy was issued with the maximum allowed coverage limit. After the new policy became effective, the agent submitted a cancellation request signed by the homeowner, a copy of the new NFIP declarations page, and a copy of the homeowners policy with the matching dates to cancel the existing NFIP policy.

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