Required Cancellation Documents: Difference between revisions

Latest revision as of 11:50, 10 December 2024

The NFIP requires specific documentation to support policy cancellation requests, with each reason code having unique requirements. Agents are responsible for ensuring all required documentation aligns with the selected cancellation reason code.

Providing accurate and complete documentation is essential to prevent delays and rejections during the cancellation process.

A. No Insurable Interest

(RC 1) Building sold, removed, or destroyed:

Bill of sale.
Settlement statement or closing disclosure.
Proof of removal or destruction.
Court documentation for foreclosed properties.
Legal documents showing ownership transfer due to death of policyholder.

(RC 2) Contents sold, removed, or destroyed:

Bill of sale or inventory record.
Proof of destruction.
Signed statement from policyholder or representative (for residential contents).
Documentation of policyholder’s death.

(RC 7) Property closing did not occur:

Signed cancellation request or statement from policyholder confirming the closing did not occur.

B. Establish a Common Expiration Date

(RC 3) Policy rewritten for common expiration date:

Declarations page of the new flood policy.
Declarations page of the other insurance policy showing building address and effective dates.

C. Duplicate Coverage

(RC 4) Duplicate NFIP policies:

Declarations pages of all duplicate policies.

(RC 10) Condominium unit or association policy converting to RCBAP:

RCBAP declarations page.
Documentation showing the replacement cost value of the unit (if applicable).

(RC 26) Duplicate non-NFIP policy:

Declarations page or application form of the non-NFIP policy.
Proof of payment for the non-NFIP policy.

D. Not Eligible for Coverage

(RC 6) Property not eligible at time of application:

Property tax records.
Section 1316 declaration (floodplain management violation).
Coastal Barrier Resources Act (CBRA) determination.
Photographs of the ineligible property.

(RC 27) Property becomes ineligible mid-term:

Evidence of ineligibility (e.g., local floodplain management violation, community suspension).
Annexation documentation if property moves to a non-participating community.

(RC 29) Building physically altered:

Photographs or documentation showing the alteration that makes the property ineligible.

E. Lender No Longer Requires Insurance

(RC 28) Insurance no longer required by lender

Signed statement from the lender or policyholder confirming flood insurance is no longer required.

F. Invalid Payment or Fraud

(RC 5) Invalid payment:

Notice of returned or rejected payment.

(RC 23) Fraud or misrepresentation:

Notification from FEMA confirming fraud or material misrepresentation.

(RC 30) Insufficient premium to retain coverage:

Underpayment letter sent to the policyholder.
Documentation showing the original coverage amount and premium paid.

G. Other Reasons

(RC 13) Nullification prior to effective date:

Signed statement from the policyholder requesting nullification.

(RC 20) SRL written with incorrect insurer:

FEMA Repetitive Loss list showing the property is designated as SRL.

(RC 21) Continuous lake flooding or closed basin lakes:

FEMA notification of the flooding condition.

(RC 22) Administrative error:

Documentation of the error, such as system constraints or incorrect use of policy forms.

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

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-{{draft}}{{infobox-nfip}}
+{{info-nfip-sfip}}
-{{line-nfip-cxl}}
+The NFIP requires [https://www.fema.gov/sites/default/files/documents/fema_nfip_flood-insurance-manual_042024.pdf#page=163 specific documentation] to support policy cancellation requests, with each reason code having unique requirements. Agents are responsible for ensuring '''all required documentation aligns''' with the selected cancellation reason code.
+Providing accurate and complete documentation is essential to '''prevent delays and rejections''' during the cancellation process.
+== A. No Insurable Interest ==
+'''(RC 1) Building sold, removed, or destroyed:'''
+* Bill of sale.
+* Settlement statement or closing disclosure.
+* Proof of removal or destruction.
+* Court documentation for foreclosed properties.
+* Legal documents showing ownership transfer due to death of policyholder.
+'''(RC 2) Contents sold, removed, or destroyed:'''
+* Bill of sale or inventory record.
+* Proof of destruction.
+* Signed statement from policyholder or representative (for residential contents).
+* Documentation of policyholder’s death.
+'''(RC 7) Property closing did not occur:'''
+* Signed cancellation request or statement from policyholder confirming the closing did not occur.
+== B. Establish a Common Expiration Date ==
+'''(RC 3) Policy rewritten for common expiration date:'''
+* Declarations page of the new flood policy.
+* Declarations page of the other insurance policy showing building address and effective dates.
+== C. Duplicate Coverage ==
+'''(RC 4) Duplicate NFIP policies:'''
+* Declarations pages of all duplicate policies.
+'''(RC 10) Condominium unit or association policy converting to RCBAP:'''
+* RCBAP declarations page.
+* Documentation showing the replacement cost value of the unit (if applicable).
+'''(RC 26) Duplicate non-NFIP policy:'''
+* Declarations page or application form of the non-NFIP policy.
+* Proof of payment for the non-NFIP policy.
+== D. Not Eligible for Coverage ==
+'''(RC 6) Property not eligible at time of application:'''
+* Property tax records.
+* Section 1316 declaration (floodplain management violation).
+* Coastal Barrier Resources Act (CBRA) determination.
+* Photographs of the ineligible property.
+'''(RC 27) Property becomes ineligible mid-term:'''
+* Evidence of ineligibility (e.g., local floodplain management violation, community suspension).
+* Annexation documentation if property moves to a non-participating community.
-The NFIP mandates specific documentation to support every policy cancellation or nullification request. Each cancellation reason code has unique documentation requirements, ensuring the cancellation process is transparent, verifiable, and compliant with NFIP guidelines. Examples of required documentation include proof of property sale (e.g., bill of sale or closing disclosure), evidence of duplicate coverage (e.g., declarations pages), or a lender's statement confirming flood insurance is no longer required. Accurate and complete documentation is critical, as incomplete submissions can delay processing or result in rejection of the request.
+'''(RC 29) Building physically altered:'''
+* Photographs or documentation showing the alteration that makes the property ineligible.
-Agents play a vital role in gathering and verifying the required documentation. They must ensure that all submissions meet the criteria for the selected cancellation reason code, as outlined in the Flood Insurance Manual. Some scenarios, such as fraud or administrative errors, require additional steps or FEMA involvement. By understanding the documentation standards and proactively assisting policyholders, agents can facilitate timely and accurate processing of cancellations while minimizing complications or rework.
+== E. Lender No Longer Requires Insurance ==
+'''(RC 28) Insurance no longer required by lender'''
+* Signed statement from the lender or policyholder confirming flood insurance is no longer required.
-== Common Cancellation Documents by Category ==
+== F. Invalid Payment or Fraud ==
+'''(RC 5) Invalid payment:'''
+* Notice of returned or rejected payment.
-=== A. No Insurable Interest ===
+'''(RC 23) Fraud or misrepresentation:'''
-* '''Building sold, removed, or destroyed:'''
+* Notification from FEMA confirming fraud or material misrepresentation.
-** Bill of sale.
-** Settlement statement or closing disclosure.
-** Proof of removal or destruction.
-** Court documentation for foreclosed properties.
-** Legal documents showing ownership transfer due to death of policyholder.
-* '''Contents sold, removed, or destroyed:'''
-** Bill of sale or inventory record.
-** Proof of destruction.
-** Signed statement from policyholder or representative (for residential contents).
-** Documentation of policyholder’s death.
-* '''Property closing did not occur:'''
-** Signed cancellation request or statement from policyholder confirming the closing did not occur.
-=== B. Establish a Common Expiration Date ===
+'''(RC 30) Insufficient premium to retain coverage:'''
-* '''Policy rewritten for common expiration date:'''
+* Underpayment letter sent to the policyholder.
-** Declarations page of the new flood policy.
+* Documentation showing the original coverage amount and premium paid.
-** Declarations page of the other insurance policy showing building address and effective dates.
-=== C. Duplicate Coverage ===
+== G. Other Reasons ==
-* '''Duplicate NFIP policies:'''
+'''(RC 13) Nullification prior to effective date:'''
-** Declarations pages of all duplicate policies.
+* Signed statement from the policyholder requesting nullification.
-* '''Condominium unit or association policy converting to RCBAP:'''
-** RCBAP declarations page.
-** Documentation showing the replacement cost value of the unit (if applicable).
-* '''Duplicate non-NFIP policy:'''
-** Declarations page or application form of the non-NFIP policy.
-** Proof of payment for the non-NFIP policy.
-=== D. Not Eligible for Coverage ===
+'''(RC 20) SRL written with incorrect insurer:'''
-* '''Property not eligible at time of application:'''
+* FEMA Repetitive Loss list showing the property is designated as SRL.
-** Property tax records.
-** Section 1316 declaration (floodplain management violation).
-** Coastal Barrier Resources Act (CBRA) determination.
-** Photographs of the ineligible property.
-* '''Property becomes ineligible mid-term:'''
-** Evidence of ineligibility (e.g., local floodplain management violation, community suspension).
-** Annexation documentation if property moves to a non-participating community.
-* '''Building physically altered:'''
-** Photographs or documentation showing the alteration that makes the property ineligible.
-=== E. Lender No Longer Requires Insurance ===
+'''(RC 21) Continuous lake flooding or closed basin lakes:'''
-* '''Lender statement:'''
+* FEMA notification of the flooding condition.
-** Signed statement from the lender or policyholder confirming flood insurance is no longer required.
-=== F. Invalid Payment or Fraud ===
+'''(RC 22) Administrative error:'''
-* '''Invalid payment:'''
+* Documentation of the error, such as system constraints or incorrect use of policy forms.
-** Notice of returned or rejected payment.
-* '''Fraud or misrepresentation:'''
-** Notification from FEMA confirming fraud or material misrepresentation.
-* '''Insufficient premium to retain coverage:'''
-** Underpayment letter sent to the policyholder.
-** Documentation showing the original coverage amount and premium paid.
-=== G. Other Reasons ===
+{{line-nfip-cxl}}
-* '''Nullification prior to effective date:'''
-** Signed statement from the policyholder requesting nullification.
-* '''SRL written with incorrect insurer:'''
-** FEMA Repetitive Loss list showing the property is designated as SRL.
-* '''Continuous lake flooding or closed basin lakes:'''
-** FEMA notification of the flooding condition.
-* '''Administrative error:'''
-** Documentation of the error, such as system constraints or incorrect use of policy forms.