NFIP New Business
The New Business process in the NFIP involves initiating and securing flood insurance coverage for a property. Below are the key steps and considerations:
Key Difference: Binding
Unlike typical Property and Casualty insurance, the NFIP does not recognize the practice of "binding" a policy through temporary agreements, such as policy binders signed by the agent and insured. As a federal program, the NFIP requires two essential components to issue a policy:
- A Completed Application: All required fields must be filled accurately, including eligibility and property details.
- Full Premium Payment: The total premium must be submitted with the application before coverage is effective.
This ensures that coverage is only provided when both requirements are met, in compliance with federal regulations.
New Business Process for Agents
Start the Application in Equinox
- Enter policyholder, property, and mortgagee information directly into the Equinox system.
- Ensure all required details are accurate to facilitate real-time processing.
Generate and Tailor the Quote
- Submit the collected details to the NFIP rating engine through Equinox to receive a premium quote.
- Tailor the quote by adjusting coverage amounts and deductibles to match the insured’s needs.
Present and Finalize the Application
- Share the tailored quote with the insured and confirm agreement to the proposed coverage and costs.
- Finalize the application in Equinox to prepare for payment.
Process Payment and Submission
- Collect the full premium payment from the insured and apply it through Equinox.
Equinox Processing
After the payment is processed through Equinox, one of two things will happen.
- The policy declaration page will be automatically issued, or
- The policy will be forwarded to underwriting if documents or additional details need to be reviewed.
Communicate with Underwriters (if needed)
- If the policy is flagged, underwriters will review and communicate any missing requirements.
- Address underwriter requests promptly by submitting the required documents or correcting details to resolve the pending status.
Best Practices
- Ensure accuracy when inputting geolocation and structural details, as they impact premium calculations.
- Buildings under construction do not need a special policy type. "Builder's Risk" coverage is provided by the Standard Flood Insurance Policy.
- Elevation Certificates have been optional since October 2021, but they may reduce premiums.
- Statutory discounts and mitigation discounts are based on building features, so review structural details as needed to apply them correctly.
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This page is a rough draft and will need more work before it's finalized. |
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This page contains details about NFIP New Business. |