Study guide
16.2 National Flood Insurance Program (NFIP)
Alaska Property & Casualty Insurance State
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1 Standalone Coverage Map
Standalone Coverage Map
2 Introduction: Alaska Property & Casualty Insurance Exam Overview
Alaska Property & Casualty Exam Overview
3 National Portion: Insurance Fundamentals
1.1 Risk, Hazards, Perils, and the Law of Large Numbers 1.2 Insurable Interest, Indemnity, and Other Insurance Principles 1.3 Insurance Contract Law and Elements 1.4 Policy Structure: Declarations, Insuring Agreement, Conditions, Exclusions 1.5 Parties, Agents vs. Brokers, and Authority
4 National Portion: Property Insurance Concepts
2.1 Causes of Loss / Named-Peril vs. Open-Peril 2.2 Valuation: ACV, Replacement Cost, and Functional Value 2.3 Coinsurance and the Coinsurance Formula 2.4 Deductibles, Limits, and Loss Settlement 2.5 Common Property Policy Conditions and Clauses
5 National Portion: Dwelling Policies (DP)
3.1 Dwelling Policy Forms DP-1, DP-2, DP-3 3.2 Dwelling Coverages A-E and Other Coverages 3.3 Dwelling Perils, Conditions, and Endorsements 3.4 Mobile Home and Specialized Dwelling Coverage
6 National Portion: Homeowners Policies - Forms & Section I
Homeowners Forms HO-2 through HO-8 and Eligibility Section I Coverages A-D and Additional Coverages Section I Perils Insured Against and Exclusions Replacement Cost vs. ACV and Loss Settlement in Homeowners
7 National Portion: Homeowners Policies - Section II & Endorsements
Section II Coverages E (Liability) and F (Medical Payments) Homeowners Conditions and Duties After Loss Common Homeowners Endorsements
8 National Portion: Personal Auto Policy - Liability & Injury
6.1 Personal Auto Policy Structure and Eligibility 6.2 Part A Liability and Supplementary Payments 6.3 Part B Medical Payments 6.4 Part C Uninsured/Underinsured Motorists
9 National Portion: Personal Auto Policy - Physical Damage & Duties
7.1 Part D Coverage for Damage to Your Auto 7.2 Exclusions and Part E Duties After an Accident 7.3 Part F General Provisions, Endorsements, and No-Fault Concepts
10 National Portion: Liability Insurance Concepts
8.1 Negligence, Torts, and Legal Liability 8.2 Defenses, Damages, and Vicarious Liability 8.3 Occurrence vs. Claims-Made Triggers 8.4 Bodily Injury, Property Damage, and Personal/Advertising Injury
11 National Portion: Commercial Property Insurance
9.1 Commercial Package Policy Structure and Common Policy Conditions 9.2 Building and Personal Property Coverage Form (BPP) 9.3 Causes of Loss Forms (Basic, Broad, Special) 9.4 Business Income and Extra Expense 9.5 Commercial Property Endorsements and the BOP
12 National Portion: Commercial General Liability - Coverages
10.1 CGL Coverage A: Bodily Injury and Property Damage Liability 10.2 CGL Coverage B: Personal and Advertising Injury, Coverage C: Medical Payments 10.3 Who Is an Insured and Supplementary Payments
13 National Portion: Commercial General Liability - Limits, Triggers & Exclusions
11.1 CGL Limits of Insurance and Aggregates 11.2 Occurrence vs. Claims-Made CGL and Retroactive Dates 11.3 Key CGL Exclusions and Endorsements
14 National Portion: Commercial Auto Insurance
12.1 Business Auto Coverage Form and Covered Auto Symbols 12.2 Commercial Auto Liability and Physical Damage 12.3 Motor Carrier / Trucking and MCS-90 12.4 Garage Coverage Form and Garagekeepers 12.5 Commercial Auto Endorsements
15 National Portion: Workers Compensation
13.1 Workers Compensation Statutory Background and Benefits 13.2 Part One (Workers Comp) and Part Two (Employers Liability) 13.3 Premium Basis, Experience Modification, and Classification 13.4 Other States, USL&H, and Federal Acts 13.5 Workers Comp Exclusions and Endorsements
16 National Portion: Other Commercial Lines - BOP, Crime & Marine
14.1 Businessowners Policy (BOP) in Depth 14.2 Crime and Fidelity Coverage 14.3 Inland Marine and Nationwide Marine Definition 14.4 Ocean Marine Coverages (Hull, Cargo, Freight, P&I)
17 National Portion: Other Commercial Lines - Specialty & Professional
15.1 Farm and Agricultural Coverage 15.2 Commercial Umbrella and Excess Liability 15.3 Professional Liability and Errors & Omissions 15.4 Directors & Officers and Employment Practices Liability
18 National Portion: Other Commercial Lines - Surety, Flood & Specialty
16.1 Surety and Fidelity Bonds 16.2 National Flood Insurance Program (NFIP) 16.3 Cyber, Aviation, and Other Specialty Lines
19 National Portion: Insurance Regulation & Market Conduct
17.1 State Regulation, Licensing, and the McCarran-Ferguson Act 17.2 Rates, Forms, Solvency, and Guaranty Associations 17.3 Producer Authority, Fiduciary Duty, and Company Operations
20 National Portion: Ethics & Unfair Trade Practices
18.1 Unfair Trade Practices and Unfair Claims Settlement 18.2 Producer Ethics, Errors & Omissions Exposure, and Fiduciary Conduct 18.3 Privacy, Fraud, and Consumer Protection
21 Chapter 1: Alaska P&C Insurance Regulation & Licensing
1.1 Alaska Division of Insurance 1.2 Alaska P&C Producer Licensing Requirements 1.3 Alaska Producer Duties and Responsibilities
22 Chapter 2: Alaska Property Insurance
2.1 Alaska Homeowners Insurance 2.2 Alaska Property Insurance Policy Provisions
23 Chapter 3: Alaska Auto & Casualty Insurance
3.1 Alaska Auto Insurance Requirements 3.2 Alaska Commercial Liability Insurance
24 Chapter 4: Alaska Ethics & Professional Conduct
4.1 Alaska Ethical Standards for Insurance Producers 4.2 Alaska Privacy Laws and Regulatory Compliance
16.2 National Flood Insurance Program (NFIP)
Key Takeaways Explain This Topic AI
Flood is excluded by standard property forms; the NFIP (1968 Act, administered by FEMA, sold via Write Your Own carriers) is the route.
Standard 30-day waiting period; exceptions are loan-closing (none) and map revision (1 day).
The SFHA is the 1%-annual-chance (100-year) floodplain; zones A/AE are riverine and V/VE are coastal high-velocity, triggering mandatory purchase with a federally backed mortgage.
Dwelling Form limits: $250,000 building / $100,000 contents; General Property Form: $500,000 / $500,000.
Contents are always ACV; building is Replacement Cost only for a primary single-family residence insured to at least 80% of replacement cost.
Last updated: June 2026
National Flood Insurance Program (NFIP)
Flood is excluded by standard homeowners, dwelling, and commercial property forms, so the exam expects you to route flood losses to the National Flood Insurance Program , created by the National Flood Insurance Act of 1968 and administered by FEMA . Private carriers sell and service NFIP policies under the Write Your Own (WYO) program, but the federal government bears the underwriting risk. A community must adopt and enforce floodplain management ordinances before its residents can buy NFIP coverage.
Definition of Flood and the Waiting Period
NFIP defines a flood as a general and temporary condition of partial or complete inundation of normally dry land from: overflow of inland or tidal waters; unusual and rapid accumulation or runoff of surface water; mudflow; or collapse of land along a shore from erosion or waves. A key trap: water damage from a single property's burst pipe is not a flood , and seepage/sewer backup is generally excluded unless caused by flood.
The standard waiting period is 30 days after application and premium payment before coverage takes effect. Exceptions: a loan-closing purchase (no wait when required by a lender) and a map revision placing the property newly in a flood zone (1-day wait).
Flood Zones and the SFHA
FEMA's Flood Insurance Rate Maps (FIRMs) classify land into zones. The Special Flood Hazard Area (SFHA) is the 1%-annual-chance (100-year) floodplain - a 26% chance of flooding over a 30-year mortgage.
- Zone Meaning
- A / AE SFHA, riverine; mandatory purchase if federally backed mortgage
- V / VE SFHA, coastal high-velocity wave action; highest rates
- X (shaded) Moderate risk (0.2%/500-year); insurance optional
- X (unshaded) Minimal risk
Mandatory purchase : a federally regulated/insured lender must require flood insurance for a building in an SFHA.
The Three NFIP Policy Forms and Their Limits
Dwelling Form - 1-4 family residential; building limit up to $250,000 and contents up to $100,000 .
General Property Form - other residential (5+ units) and non-residential/commercial; building up to $500,000 and contents up to $500,000 .
Residential Condominium Building Association Policy (RCBAP) - condo associations; building up to $250,000 times the number of units.
Contents are written on an Actual Cash Value (ACV) basis. The building is settled at Replacement Cost only for a single-family primary residence insured to at least 80% of replacement cost (or to the maximum limit); otherwise ACV applies.
Worked Numeric: Replacement Cost vs. ACV and Coinsurance-Style Test
A single-family primary residence has a replacement cost of $300,000 and is insured for $250,000 (the NFIP maximum). The 80% threshold = 0.80 x $300,000 = $240,000 . Because the $250,000 limit exceeds the $240,000 threshold, building losses settle at Replacement Cost up to the $250,000 limit.
Now suppose the same home were insured for only $200,000. That is below $240,000, so losses settle at ACV . If a partial loss costs $60,000 to repair and depreciation is 20%, ACV recovery = $60,000 x (1 - 0.20) = $48,000 before the deductible. This RC-versus-ACV trigger is the most tested NFIP numeric.
Increased Cost of Compliance (ICC) and Key Exclusions
Every NFIP policy automatically includes Increased Cost of Compliance (ICC) coverage of up to $30,000 , payable when a community declares a flooded building substantially damaged (repair cost 50% or more of market value) or repetitive loss and requires it to be elevated, relocated, demolished, or floodproofed. ICC is in addition to the building limit but the combined building payment cannot exceed the statutory maximum ($250,000 dwelling).
Commonly excluded: property outside the building (decks, patios, fences, landscaping, hot tubs, swimming pools), most basement contents (only limited mechanicals like furnaces, water heaters, and washers/dryers are covered), currency, precious metals, and business interruption / loss of use . There is no additional living expense under NFIP - a critical contrast with a homeowners policy, which does provide loss of use but excludes the flood peril itself.
Risk Rating 2.0 and Private Flood
FEMA replaced the old zone-and-elevation rating with Risk Rating 2.0 , which prices each property on its individual flood risk (distance to water, rebuild cost, flood frequency/severity) rather than broad zone class. Statutory annual increase caps (generally 18% per year for most policies under current law) limit premium shock as legacy policies migrate to full risk rate.
A growing private flood market also exists. Private flood policies can satisfy the lender's mandatory-purchase requirement if they are at least as broad as NFIP, and they may offer higher limits, replacement cost on contents, or loss-of-use coverage that the NFIP lacks. Candidates should know private flood is an alternative , not a federal program, and is not backed by FEMA.