Cancellation Qualifying Reasons/RC 10

Reason Code 10: Condominium Unit or Association Policy Converting to RCBAP

This reason code applies when an NFIP policy insuring a residential condominium unit is replaced by a Residential Condominium Building Association Policy (RCBAP). The individual unit policy is canceled to avoid duplicate coverage.

Condition	Details
Eligibility for Cancellation	A Dwelling Form policy insuring a condominium unit may be canceled if an RCBAP is purchased for the building and the combined coverage limits exceed the unit’s insurable value.
Effective Date of Cancellation	The effective date of the RCBAP policy.
Policy Terms Eligible for Refund	The term in which the RCBAP became effective and up to 5 years prior to the cancellation request.
Type of Refund	A pro-rata refund excluding the Federal Policy Fee and Probation Surcharge for the canceled term. Full refund including surcharges and fees for eligible prior terms.
Required Documentation	A copy of the RCBAP declarations page and documentation showing the unit’s replacement cost value if applicable.

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

Additional Guidance

• If the RCBAP covers the entire building and provides adequate coverage, individual unit policies should be canceled to prevent duplicate flood insurance.
• Underwriters should verify that the RCBAP’s total insured value meets or exceeds the replacement cost of the covered units.
• If a claim has been paid on the individual unit policy, it cannot be canceled mid-term.

Required Documents

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

• Copy of the RCBAP declarations page showing effective date and coverage amount.
• Documentation showing the replacement cost value of the unit, if required.

Document Gallery

• RCBAP Policy Declarations: Confirmation of new policy covering the condominium building.
• Replacement Cost Documentation: Proof of unit valuation, if applicable.

Scenarios for Context

Scenario 1:
A condo owner purchases an individual flood policy for their unit. Later, the condominium association secures an RCBAP for the entire building with coverage exceeding unit replacement costs. The owner’s policy is canceled effective the RCBAP policy date.

Scenario 2:
A condominium association initially does not have an RCBAP, so unit owners purchase separate flood policies. When the association obtains an RCBAP, unit owners cancel their individual policies to avoid duplication.

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