Study guide
16.2 National Flood Insurance Program (NFIP)
Arkansas Property & Casualty Insurance State
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1 Standalone Coverage Map
Standalone Coverage Map
2 Introduction: Arkansas Property & Casualty Insurance Exam Overview
Arkansas 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
4.1 Homeowners Forms HO-2 through HO-8 and Eligibility 4.2 Section I Coverages A-D and Additional Coverages 4.3 Section I Perils Insured Against and Exclusions 4.4 Replacement Cost vs. ACV and Loss Settlement in Homeowners
7 National Portion: Homeowners Policies - Section II & Endorsements
5.1 Section II Coverages E (Liability) and F (Medical Payments) 5.2 Homeowners Conditions and Duties After Loss 5.3 Common Homeowners Endorsements (scheduled property, water backup, ordinance or law)
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: Arkansas P&C Insurance Regulation & Licensing
1.1 Arkansas Insurance Department 1.2 Arkansas P&C Producer Licensing Requirements 1.3 Arkansas Producer Responsibilities
22 Chapter 2: Arkansas Property Insurance
2.1 Arkansas Homeowners Insurance 2.2 Arkansas Commercial Property Insurance
23 Chapter 3: Arkansas Casualty & Auto Insurance
3.1 Arkansas Auto Insurance Requirements 3.2 Arkansas Liability Insurance 3.3 Arkansas Workers' Compensation Insurance
24 Chapter 4: Arkansas Ethics & Professional Conduct
4.1 Ethical Practices and Consumer Protection
16.2 National Flood Insurance Program (NFIP)
Key Takeaways Explain This Topic AI
Flood is excluded by the standard HO and commercial property forms, so flood is covered separately through the NFIP or private flood markets.
The NFIP is administered by FEMA; insurers sell it through the Write-Your-Own (WYO) program but FEMA bears the risk.
Dwelling Form building limit is $250,000 and contents $100,000; commercial limits are $500,000 building and $500,000 contents.
There is a standard 30-day waiting period before NFIP coverage takes effect, with limited exceptions.
Flood is defined as a general and temporary condition of partial or complete inundation of normally dry land affecting two or more acres or two or more properties.
Last updated: June 2026
Why flood needs its own program
The standard Homeowners policy and the ISO commercial property forms exclude flood . Because private insurers historically would not write flood (adverse selection - only those in flood zones buy it), Congress created the National Flood Insurance Program (NFIP) in 1968. It is administered by FEMA (Federal Emergency Management Agency). A community must adopt and enforce floodplain-management ordinances to make NFIP policies available to its residents.
Producers must know the formal definition of flood , which the exam quotes almost verbatim: a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties from overflow of inland or tidal waters, unusual and rapid accumulation or runoff of surface waters, or mudflow. A single, isolated water-line break is not a flood. Wave action and storm-surge are flood; wind-driven rain through a wind-created roof opening is typically a windstorm (HO) loss, not flood - a classic hurricane causation trap.
Write-Your-Own program and how it is sold
Most NFIP policies are sold through the Write-Your-Own (WYO) program: private insurers issue and service policies under their own names, but the federal government bears the underwriting risk . A producer selling flood must complete flood training (federal requirement under the Flood Insurance Reform Act). The other channel is the NFIP Direct program serviced by FEMA's contractor.
Know the three NFIP policy forms:
- NFIP form Used for Building / Contents limits
- Dwelling Form 1-4 family residential $250,000 / $100,000
- General Property Form Other residential (5+ units) and non-residential/commercial $500,000 / $500,000
Residential Condominium Building Association Policy (RCBAP) Condo association master flood $250,000 x number of units (building); $100,000 contents
Note the limits are per building . There is no liability coverage under NFIP - it is property only. Coverage is on an actual cash value (ACV) basis for contents and most personal-property losses, while the building may be settled at replacement cost if it is the insured's principal residence (occupied at least 80% of the year) and is insured to at least 80% of replacement cost (the NFIP coinsurance-style requirement).
Worked coinsurance check: a home costs $300,000 to replace and the owner carries only $180,000 of NFIP building coverage. The 80% requirement is $240,000, so the owner is underinsured. A partial loss is then settled at the larger of ACV or (coverage carried / coverage required) x loss. For a $100,000 covered loss the ratio factor is $180,000 / $240,000 = 0.75, yielding $75,000 before deductible - the penalty for buying below the 80% threshold. Carrying the full $240,000 would have qualified the loss for replacement-cost settlement.