NFIP Coverage Exceptions

The National Flood Insurance Program (NFIP) establishes specific guidelines for insuring properties against flood risks. While the program primarily excludes certain high-risk structures and situations from eligibility, exceptions are made under specific and often uncommon circumstances. These exceptions are carefully defined within the Standard Flood Insurance Policy (SFIP) and are subject to stringent requirements to ensure compliance with NFIP standards.

This page outlines the unique conditions under which the NFIP permits coverage for structures that typically fall outside standard eligibility. Agents and policyholders should note that these allowances are rare and contingent upon meeting detailed criteria and documentation requirements. The following categories highlight the key exceptions to standard NFIP coverage rules.

Under Construction

In the context of NFIP coverage, Buildings Under Construction—commonly referred to as "Builder's Risk" in the insurance industry—are covered under the SFIP rather than as a separate policy type. This differs from the standard approach in Property and Casualty insurance, where Builder's Risk is often a standalone policy.

Coverage applies to buildings undergoing construction, alteration, or repair prior to being fully walled and roofed. The coverage ensures protection against flood damage during critical phases of construction, provided eligibility and documentation requirements are met.

Eligibility for Coverage

1. Coverage applies to buildings under construction, alteration, or repair.
2. The structure does not need to be fully walled and roofed for initial coverage eligibility.

Limitations

1. Coverage excludes structures where the lowest floor is below the Base Flood Elevation (BFE) in specific flood zones (e.g., AE, VE) until the building is fully walled and roofed.
2. If construction is temporarily halted, coverage extends for up to 90 continuous days.

Special Provisions

1. Materials and supplies stored in a fully enclosed building at the insured location or adjacent property are covered under specific conditions.
2. Policyholders must comply with all terms of the SFIP, including accurately identifying the structure and ensuring insurable interest.

Buildings Over Water

The NFIP provides coverage for Buildings Over Water under specific conditions outlined in the Standard Flood Insurance Policy (SFIP). These provisions ensure that unique risks associated with such structures are addressed while maintaining adherence to floodplain management regulations.

Buildings Partially Over Water

The NFIP will cover a building that sits partially over water, so long as the building’s foundation or exterior walls are on land or on the landward side of mean high tide.

Documentation Required:

• A description or map verifying the building's location partially over water and partially on land.
• Certification from a community official confirming compliance with floodplain regulations.

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Buildings Fully Over Water

Buildings constructed fully over water are not eligible for NFIP coverage unless the building was constructed or substantially improved before October 1, 1982.

Documentation Required:

• Records proving the construction or substantial improvement occurred before the cutoff date.
• Verification of compliance with local floodplain requirements, if applicable.

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Boathouses

Boathouse coverage only applies to the non-boathouse portions of the building used for residential, commercial, or municipal purposes. The following areas are excluded from coverage:

• The ceiling and roof above boathouse areas used to float boats.
• Floors, walls, and contents located within the boathouse used specifically for boat operation or storage.

Documentation Required:

• Floor plans or usage details to distinguish non-boathouse areas.
• Community official’s certification of eligibility.

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Buildings Fully Over Water Due to Erosion

Buildings over water can be deemed eligible for coverage if they were originally constructed on land but are now fully over water due to erosion or similar natural causes. Continuous NFIP coverage is required for at least one year before the building becomes entirely over water (or since construction, if less than a year).

Documentation Required:

• A letter from a community official verifying the building’s original construction location.
• Photographs showing the building before and after the transition, if available.
• Proof of continuous NFIP coverage.

Buildings Below Ground

Buildings constructed primarily (50% or more of the Actual Cash Value of the building, including machinery and equipment) below ground level are not eligible for NFIP coverage. The NFIP makes an exception to this exclusion under specific circumstances.

1. The lowest floor must be at or above the Base Flood Elevation (BFE).
2. The building must utilize earth as insulation material in conjunction with energy-efficient building techniques.

Documentation Requirements

1. An elevation certificate or equivalent documentation to demonstrate compliance with the BFE requirement.
2. Building schematics or plans verifying the use of earth insulation and compliance with NFIP standards for energy efficiency.

This page contains information about the NFIP. Find more NFIP Resources.